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

                                                            S. Hrg. 108-176

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 FIRST SESSION

                                       ON

                               H.R. 2658/S. 1382

      AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2004, AND FOR OTHER PURPOSES

                                   __________

                             Department of Defense
                           Nondepartmental witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     senate

                                     _____

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                          COMMITTEE ON APPROPRIATIONS

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
    RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
    JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
    ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
    BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
    LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
    KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
    MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
    SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                        James W. Morhard, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                  Terrence E. Sauvain, Minority Staff Director
                                     ------

                            Subcommittee on Defense

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            DANIEL K. INOUYE, Hawaii
    ARLEN SPECTER, Pennsylvania          ERNEST F. HOLLINGS, South Carolina
    PETE V. DOMENICI, New Mexico         ROBERT C. BYRD, West Virginia
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    RICHARD C. SHELBY, Alabama           BYRON L. DORGAN, North Dakota
    JUDD GREGG, New Hampshire            RICHARD J. DURBIN, Illinois
    KAY BAILEY HUTCHISON, Texas          HARRY REID, Nevada
    CONRAD BURNS, Montana                DIANNE FEINSTEIN, California

                               Professional Staff

                                  Sid Ashworth
                               Jennifer Chartrand
                                 Alycia Farrell
                                   Menda Fife
                                  Tom Hawkins
                                Robert J. Henke
                                  Lesley Kalan
                                Mazie R. Mattson
                                 Kraig Siracuse
                                  Brian Wilson
                           Charles J. Houy (Minority)
                       Nicole Rutberg Di Resta (Minority)
                            Betsy Schmid (Minority)

                             Administrative Support

                                  Nicole Royal

                                C O N T E N T S

                                  ----------

                           Wednesday, March 19, 2003

                                                                       Page

    Department of Defense: Department of the Army....................     1

                           Wednesday, March 26, 2003

    Department of Defense: Department of the Air Force...............    69

                            Wednesday, April 2, 2003

    Department of Defense: Department of the Navy....................   123

                            Wednesday, April 9, 2003

    Defense Agencies: Missile Defense Agency.........................   195

                           Wednesday, April 30, 2003

    Department of Defense: Medical Programs..........................   241

                             Wednesday, May 7, 2003

    Department of Defense:
        National Guard...............................................   369
        Reserves.....................................................   425

                            Wednesday, May 14, 2003

    Department of Defense: Office of the Secretary...................   487

                             Thursday, May 15, 2003

    Nondepartmental witnesses........................................   551

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                           WEDNESDAY, MARCH 19, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:05 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Domenici, Shelby, Hutchison,
    Inouye, Leahy, and Dorgan.

                             DEPARTMENT OF DEFENSE

                             Department of the Army

    STATEMENTS OF:
            HON. THOMAS E. WHITE, SECRETARY OF THE ARMY
            GENERAL ERIC K. SHINSEKI, CHIEF OF STAFF, UNITED STATES ARMY

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. We just received word that Senator Inouye
    is stuck in traffic, as many of us have been this week, and he
    asked us to proceed without him, so I am pleased to have a
    chance to hear testimony from the Secretary of the Army and the
    Army Chief of Staff for the fiscal year 2004 budget request. We
    welcome you, General Shinseki.
        General Shinseki. Thank you, Sir.
        Senator Stevens. I am informed that this may be your last
    time to come before us.
        General Shinseki. Very likely.
        Senator Stevens. Or at least this year will be your last
    time.
        General Shinseki. Yes, sir.
        Senator Stevens. With what is going down in Iraq we may see
    you again, but I do want to tell you it is just such a short
    time ago you came for the first time, General, and we have
    enjoyed very much, all of us, the chance to be with you and to
    have your vision on transformation of the Army, and we have
    done our best to pursue that. I am certain that Senator Inouye
    will have some statements when he comes, but I want to thank
    you on behalf of our committee for all your cooperation with
    us.
        And Mr. Secretary, nice to have you back with us again.
        Mr. White. Thank you, sir.
        Senator Stevens. We now find ourselves conducting a global
    war on terrorism, and quite close to war in Iraq, and we are
    obviously very much in need of a strong, modern, prepared
    military. It is important to us today, more important,
    probably, than it has been in many, many years to be sure that
    you have the resources that you need, and that we support the
    President and your men and women as they respond to the
    Commander in Chief's directions and commands.
        We have people from the Army deployed all over the world
    now. I am told that the Army has 262,000 soldiers now deployed
    somewhere in the world outside of our country.
        General Shinseki. That is correct.
        Senator Stevens. The Guard and Reserve now, under the total
    force concept, share this burden, with 139,000 Reservists and
    Guardsmen mobilized and on active duty. There are many issues
    that we face this year, there is no question about it, but we
    want to pursue today, if possible, the direction that we should
    go on Army Transformation.
        I think you have demonstrated to the Congress and the
    people of this country that the Transformation concept is not
    just simply a new weapons platform, but a new doctrine and
    organizational concept for the Army, and it is a whole new way
    of life for the Army and new way to fight and win wars. You
    have managed to shake up the industry and the military
    bureaucracy with your concepts, and Transformation has
    shattered the old paradigm of business as usual in the miliary,
    so we congratulate you.
        I think Congress must continue its commitment to this Army
    Transformation and continue the commitment we made to our
    soldiers in 1999, when you first brought us this new concept of
    Transformation, so it is the intention of this committee, at
    least for this chairman and I am certain Senator Inouye, to
    urge this committee to give you our full support to make
    certain that this goal is totally accomplished. We look forward
    to hearing your plans today not only on transformation, but to
    further strengthen the entire Army.
        I will put the balance of my comments in the record so that
    I do not prolong this, but I do thank each of you for visiting
    with me and my staff yesterday to make certain we had
    coordination of our concepts and our resolve to be certain that
    the Army of today and tomorrow will be the best that it can be.
        [The statement follows:]

                   Prepared Statement of Senator Ted Stevens

        This morning the subcommittee will receive testimony from
    the Secretary of the Army and the Army Chief of Staff on their
    fiscal year 2004 budget request.
        General Shinseki, welcome to you. Unfortunately, this will
    be your last time testifying before the committee as the Chief
    of Staff.
        It seems like a very short time ago when you first
    testified before this committee and introduced us to your
    vision of transformation for the Army.
        The Army is well on its way towards the future.
    Transformation is a success. You have proven your critics
    wrong.
        Much has happened since our first meeting. As we find
    ourselves conducting a global war on terrorism, preparing for a
    possible war to disarm Iraq, America is reminded of the need
    for a strong, modern, prepared military.
        It is as important today as it ever was to have a military
    who has the resources it needs and the support of the President
    and the entire country.
        The United States Army is deployed all over the globe.
    Today, the Army has over 262,000 soldiers deployed or forward
    stationed.
        The Guard and Reserve are also sharing in this burden with
    more than 139,000 reservists and guardsmen mobilized and on
    active duty.
        While there are many important issues facing the Army, one
    of the most critical decisions Congress will make this year
    will be the direction we go on Army transformation.
        You have demonstrated to the Congress, and the country,
    that the transformation concept is not simply a new weapons
    platform, but a new doctrine and organizational concept for the
    Army. It is a whole new way for the Army to fight and win wars.
        You have managed to shake up industry and the military
    bureaucracy with your concepts. Transformation has shattered
    the old paradigm of ``business as usual''.
        Congress must continue its commitment to Army
    transformation and continue the commitment we made to our
    soldiers in 1999 when you introduced the concept of
    transformation.
        It is the intention of this committee to give you the
    resolve and support to see your goal through.
        I look forward to learning of your plans to not only
    continue transformation, but to further strengthen it, and the
    entire Army.
        This committee will continue to adamantly support your plan
    to deploy 6 Stryker brigades. In fact, I will seek your insight
    momentarily on how this committee can best protect that plan.
        In addition, I would welcome any comments you might have on
    current funding requirements for the Army for fiscal year 2004,
    and your views on the scope and timing of any needed
    supplemental appropriations for this fiscal year.
        Let me now turn to our mutual friend, and partner, the
    distinguished ranking member of the subcommittee, Senator
    Inouye.

        Senator Stevens. Senator Leahy, you are first.
        Senator Leahy. Mr. Chairman, are we going to questions now,
    or are these just----
        Senator Stevens. Opening statements, if you have them.

                     STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. No. I will put an opening statement in the
    record.
        I would just tell you, Mr. Chairman, what I had said to
    Secretary White and General Shinseki here earlier, right before
    this started, that no matter how anybody feels one way or the
    other on war, at least we can take comfort in the fact that our
    people, our troops in the field are the best-trained, best-
    equipped in the world, and as I told both the Secretary and the
    General, what I have been saying to families in Vermont who
    have either members of their family who are already deployed or
    being called up to be deployed, take comfort in the fact that
    our people are so well-led, so well-trained, and so well-
    equipped.
        And as the General pointed out to me, that is not something
    you do overnight. It requires years and years of preparation
    and Mr. Chairman, you and Senator Inouye and this committee
    have done a lot of that to make sure we bought a lot of
    equipment we hope we will never have to use, but when we have
    to use it, at least it is there, and so I compliment you both.
        Thank you, Mr. Chairman. I will put my whole statement in
    the record.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        I would like to welcome back General Shinseki and Secretary
    White to the Subcommittee. As U.S. forces are poised to enter
    Iraq, it is good to know that they have such competent,
    steadfast leadership back at the Pentagon. We face many
    challenges in the days and weeks ahead. The men and women of
    the U.S. Army and the entire armed forces are ready for any
    eventuality. I look forward to the question and answer period.

        Senator Stevens. My great friend from Hawaii, do you have
    an opening statement, Senator?

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Mr. Chairman, I thank you very much. I have
    the excuse that half of this city has, the traffic, but before
    I proceed, sir, I would like to, as a citizen of the United
    States, commend and thank the Secretary and General Shinseki
    for the service they have rendered us at this time in our
    history by preparing our men and women so that they are in full
    readiness upon the command of our Commander in Chief. I think
    this is very important, and for that we will be eternally
    grateful.
        Mr. Chairman, I have a prepared statement here, but since
    time may be of the essence, may I put this in the record, sir?
        Senator Stevens. Without objection, it will be put in the
    record as though read.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Secretary White, General Shinseki, I would like to welcome
    you once again, as we consider the fiscal year 2004 Defense
    appropriations request for the Army. General Shinseki, since
    this will probably be your last appearance before this
    committee as Chief of Staff of the Army, I would like to take
    this opportunity to recognize your invaluable contributions to
    the U.S. Army.
        General Shinseki assumed his duties as the 34th Chief of
    Staff of the U.S. Army on June 22, 1999. Just three months
    later, he announced his plans to transform the Army into a
    force that could better meet future defense requirements to be
    both rapidly deployable and lethal.
        During your tenure, General, you institutionalized
    transformation and with it brought about a fundamental cultural
    and technological shift in the U.S. Army--a difficult challenge
    for an institution as large, diverse, and steeped in history
    and tradition as the United States Army.
        Four years after assuming your duties as Chief of Staff of
    the Army, the term ``transformation'' not only encompasses
    plans and programs for building the Army's future force, but
    the term is now synonymous with the efforts of the entire
    Department of Defense as it seeks to enhance its capabilities
    to fight and win wars in the 21st century.
        Congratulations General on a long and decorated career, and
    thank you for your service to the Army and to the country.
    Although you are retiring this June, this committee hopes and
    plans to continue to call on you for your counsel.
        Gentlemen, since our last hearing, the Army continues to
    play a critical role in the global war on terrorism, while at
    the same time transforming its forces for the 21st century.
        Our Nation's soldiers are busy--mobilization of the Army
    Reserve and Guard has reached 210,000 with forces deployed
    around the world to combat terrorism, to honor our commitments
    in Bosnia, Kosovo, the Sinai, and Saudi Arabia, and to prepare
    for a potential war with Iraq. Gentlemen, we need you to tell
    us how long we will be able to sustain these deployments and
    mobilizations, and whether you have sufficient forces to meet
    these requirements.
        I look forward to hearing about these issues and how the
    Army's fiscal year 2004 budget request supports the Army's
    current and future missions.

        Senator Stevens. Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Mr. Chairman, thank you for calling this
    hearing. Secretary White, I want to commend you for your
    service both as a soldier and as a Secretary, and General
    Shinseki, we know what you mean to the Army. We know what you
    mean to the Nation, and I appreciate that very much. I look
    forward to both of your testimony here today, especially on the
    eve of the impending conflict.
        Senator Stevens. Senator Dorgan.

                      STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Mr. Chairman, let me thank the Secretary
    for being here, and let me thank General Shinseki, and General
    Shinseki, I know that you are slated to retire, and let me echo
    the words of my colleagues in thanking you for your service.
        Senator Stevens. Thank you very much, and I would ask that
    you both turn on your mikes, as I have just turned mine on, and
    I am reminded sitting here of the times that Senator Stennis
    talked to us about changing the Army and about trying to work
    the Guard and Reserve into the total force. I think he would be
    delighted if he were here with us today because if there were
    any pioneer in, really, modernization of the Army, it was
    Senator Stennis.
        I do again thank you very much for the hard work you have
    put into making this Army as good as it is, and as good as the
    world will see it is in the near days. Please proceed with your
    statements, whoever wishes to go first. Mr. Secretary.

                          STATEMENT OF SECRETARY WHITE

        Mr. White. Thank you, Mr. Chairman, and with your
    permission I will submit a statement for the record and keep my
    opening remarks short.
        Senator Inouye, Mr. Chairman, I am grateful for the
    opportunity to talk with you today about the United States
    Army. Our priorities remain the same as they were a year ago,
    win the global war on terrorism, and transform the Army to
    prepare it for future wars.
        First and foremost, I wish to thank this committee for your
    continued support for the Army. The fiscal year 2003 budget has
    allowed us to make significant improvements in many key areas.
    We have structured our budget request for fiscal year 2004 in
    the same fashion as fiscal year 2003, based on our top
    priorities of People, Readiness, and Transformation.
        On the people front, thanks to your support we are making
    significant strides, and this does include a fully funded pay
    raise for all soldiers, targeted pay raises in selective cases,
    significantly reduced soldier out-of-pocket expenses for
    housing, and an accelerated Residential Communities Initiative
    (RCI) to improve on-post quarters for our families.
        This year, we are examining options, under an initiative
    called personnel transformation, to shift away from our
    individual replacement system to a unit manning approach that
    will enhance cohesion and combat readiness of our formations
    while improving the predictability of assignment patterns for
    Army families.
        As you know, we have had over 30,000 National Guard and
    Reserve soldiers on active duty consistently since September 11
    of 2001, some 18 months now, and as of today, we have activated
    over 151,000 soldiers for current and potential future Federal
    operations in addition to over 2,700 soldiers currently
    activated for State service. These Reserve Component soldiers
    are performing magnificently on a ``One Army'' basis, and we
    appreciate the tremendous support they have received from their
    employers as well as the American public. We recognize the
    unique sacrifices made by these citizen soldiers as they step
    up to do their duty as citizens and patriots.
        On the readiness front, the Army is ready for any
    additional operations we are ordered to perform in the future,
    and our great soldiers are successfully meeting our many
    current obligations around the world. With your help in fiscal
    year 2003 and again in our fiscal year 2004 budget request, we
    gave priority to funding training requirements for the force,
    significantly improved our spare parts availability,
    accelerated fielding of soldier support systems and unit
    communications equipment to make our units as ready as
    possible. Having said that, our operations tempo (OPTEMPO) has
    never been higher in my nearly 40 years of experience with the
    Army. We are indeed an Army that is on the move.
        While we have fully funded normal OPTEMPO and training,
    including the full complement of pre-9/11 missions such as
    Bosnia and Kosovo, the Sinai, and Korea, we have many other
    obligations as we pursue the global war on terrorism as part of
    the joint force. Post-9/11 missions of the past 18 months
    include Operations Noble Eagle here at home, Enduring Freedom
    in Afghanistan, as well as operations in the Philippines and
    elsewhere. Finally, we have a significant flow of Army forces
    into the Persian Gulf in support of potential future operations
    to ensure the disarmament of Iraq.
        Given this level of activity, it should come as no surprise
    that supplemental funding in fiscal year 2003 will be required.
    We are working hard to balance our readiness imperative for
    realistic training with our obligation to be good stewards of
    the environment. That balance is reflected in the Department of
    Defense's Range Preservation Initiative that we ask your
    support for. It is essential for us to maintain the balance
    between the use of military lands for their uniquely military
    purposes and the need for environmental protection and species
    preservation.
        The readiness of our soldiers going into harm's way depends
    upon that balance, so we ask for your help with this important
    initiative. We are transforming our Army even as we execute
    combat operations and prepare for future contingencies. This
    simultaneity is not only a necessity, it is an imperative. We
    are transforming the business side of the Army as well as the
    operational force, and we are transforming within the joint
    context, not merely in a service-centric manner.
        We have held steady to the azimuth established by the Chief
    of the Army, General Shinseki, all the way back in 1999, and in
    my personal opinion, one of the reasons we have been successful
    in that Transformation is the courage he showed in laying that
    marker down and then not deviating from that azimuth, and you
    have supported that azimuth consistently since he spoke of it.
        In fiscal year 2004, we request funding for our fourth
    Stryker Brigade to be fielded at Fort Polk, Louisiana, the
    Second Armored Cavalry Regiment, and we remain fully committed
    to fielding six Stryker Brigades on our established time line.
    We remain focused on the Objective Force with the restructured
    Comanche armed reconnaissance helicopter program. We are
    postured to successfully meet acquisition Milestone B in May
    for the Future Combat System (FCS). FCS includes the non-line
    of sight (NLOS) variant and the initial fielding increment
    which will meet the cannon requirement previously addressed by
    the Crusader program. We remain on a glide path to field the
    first Objective Force units in fiscal year 2008 with an initial
    operational capability (IOC) in 2010.
        On the business side of the Army, we fully solicit your
    support for the Department of Defense (DOD) transformation
    package, which will greatly streamline our operations and give
    us the flexibility to manage the Department in the most
    efficient manner. In the same vein, our business transformation
    initiatives are designed to achieve greater value for the
    taxpayer dollar.
        Our Residential Communities Initiative to privatize family
    housing continues to be an enormous success. By fiscal year
    2007, the Army will have established partnerships to bring
    every set of family quarters up to standard. I cannot think of
    a better thing to do for a married Army. We are able to do this
    because with an investment of $620 million we have attracted
    over $7 billion in private capital. This is a tremendous value
    for the taxpayer, and we believe a model of how better business
    practices can help us with noncore functions such as housing.
        We are seeking to apply the same model of public-private
    partnership to the challenge of on-base utilities, for example,
    by consolidating all installation management under one command,
    and by centralizing the Army-wide contracting, for contracts
    over $500,000, in our Army Contracting Agency. We are seeking
    to regionalize utilities contracting, achieving economies of
    scale that were not possible with our previous business
    management structures. Private capital will be required to fix
    the utilities infrastructure on our bases, and we are setting
    the conditions to attract it just as we have with family
    housing.
        Finally, we are conducting what we call our Third Wave
    Initiative, which seeks to eliminate or transfer all noncore
    functions currently consuming Army people and dollars. Rest
    assured, as we progress this initiative, we will pursue this
    business initiative in full consultation with the Congress.
        Now, finally the matter of risk. Balancing the risk
    associated with near-term modernization and mid-term
    transformation has required us to make some tough choices. We
    have had to terminate or restructure numerous current force
    modernization programs to generate the capital to fund
    transformation. In a nutshell, our fiscal year 2004 budget
    submission funds people, readiness, and transformation at the
    expense of some of our infrastructure accounts and current
    force modernization. We made these judgments only after a
    careful balancing of both operational risk and the risk of not
    transforming to provide the capabilities the Army needs to meet
    the obligations of our near-and mid-term strategy.
        In conclusion, I wish to return to those who I mentioned
    first in my remarks, our soldiers. Their performance in
    Afghanistan speaks volumes. In the dead of winter, a landlocked
    country, toughest terrain imaginable, the collapse of the
    Taliban put Al Qaeda on the run and they are still running. It
    has been my privilege to visit them in Afghanistan, see our
    soldiers in Kuwait and Bosnia and Kosovo, all around our
    country. You could never meet a finer group of young Americans.
    They are flat out, in my 40 years, the best soldiers I have
    ever seen, and we are all very, very proud of them. Rest
    assured they stand ready, along with our sister services, to
    accomplish any task ordered by our Commander in Chief.

                               PREPARED STATEMENT

        Thank you, Mr. Chairman, very much for the opportunity to
    discuss the fiscal year 2004 budget submission. I look forward
    to your questions.
        [The statement follows:]

      Prepared Statement of Honorable Thomas E. White and General Eric K.
                                    Shinseki

        Mr. Chairman and distinguished members of the Committee, thank you
    for this opportunity to report to you today on the Posture of the
    United States Army.
        America's armed forces are the most powerful in the world. And
    America's Army remains the most respected landpower to our friends and
    allies and the most feared ground force to those who would threaten the
    interests of the United States.
        Since before the birth of the Nation, American Soldiers have
    instilled hope in a noble dream of liberty. They have remained on point
    for the Nation through nine wars, and the intervals of peace in the
    years between--defending the Constitution and preserving freedom.
    Magnificent in their selfless service, long in their sense of duty, and
    deep in their commitment to honor, Soldiers have kept the United States
    the land of the free and the home of the brave. This is our legacy. Our
    Soldiers who serve today preserve it.
        In October 1999, we unveiled our vision for the future--``Soldiers,
    on point for the Nation, transforming this, the most respected army in
    the world, into a strategically responsive force that is dominant
    across the full spectrum of operations.'' The attacks against our
    Nation on September 11, 2001, and the ensuing war on terrorism validate
    The Army's Vision--People, Readiness, Transformation--and our efforts
    to change quickly into a more responsive, deployable, agile, versatile,
    lethal, survivable, and sustainable force.
        While helping to fight the Global War on Terrorism, The Army is in
    the midst of a profound transformation. Readiness remains our constant
    imperative--today, tomorrow, and the day after. Transformation,
    therefore, advances on three broad axes: perpetuating The Army's legacy
    by maintaining today's readiness and dominance; bridging the
    operational gap with an Interim Force of Stryker Brigade Combat Teams;
    and fielding the Objective Force to fight and win conflicts in the
    years beyond this decade.
        As they have throughout The Army's 227-year history, Soldiers
    remain the centerpiece of our formations. Versatile and decisive across
    the full spectrum of joint missions, land forces have demonstrated time
    and again the quality of their precision in joint operations. Our
    responsibility is to provide Soldiers with the critical capabilities
    needed for the tough missions we send them on.
        After three and a half years of undiminished support from the
    Administration and the Congress, and the incredible dedication of
    Soldiers and Department of the Army civilians, we have begun to deliver
    The Army Vision. With continued strong support, we will win the war
    against global terrorism, meet our obligations to our friends and
    allies, remain ready to prevail over the unpredictable, and transform
    ourselves for decisive victories on future battlefields.
        We have achieved sustainable momentum in Army Transformation; the
    framework is in place to see the Objective Force fielded, this decade.

                       THE ARMY--AT WAR AND TRANSFORMING

        The United States is at war, and The Army serves the Nation by
    defending the Constitution and our way of life. It is our nonnegotiable
    contract with the American people--to fight and win our Nation's wars,
    decisively.
        In the weeks immediately following the attacks of September 11,
    2001, Special Operations Forces (SOF) infiltrated Afghanistan,
    penetrated Al Qaida and Taliban strongholds, and leveraged all
    available long-range, joint fires, enabling the Northern Alliance to
    begin dismantling the Taliban. By January 2002, U.S. and Allied
    conventional force reinforcements began to set the stage for Operation
    Anaconda, where Soldiers, demonstrating courage and determination under
    the most challenging conditions, defeated Al Qaida at altitude on the
    escarpments overlooking the Shah-e-kot Valley.
        Today, more than 198,000 Soldiers remain deployed and forward
    stationed in 120 countries around the globe, conducting operations and
    training with our friends and allies. Decisively engaged in the joint
    and combined fight against global terrorism, Soldiers are serving with
    distinction--at home and abroad. Soldiers from both the Active and the
    Reserve Component have remained ``on point'' for the Nation in the
    Balkans for seven years, in Saudi Arabia and Kuwait for 12 years, in
    the Sinai for 21 years, and in Korea and Europe for over 50 years. At
    the publication of the Army Posture Statement, there were more than
    110,000 Reserve Component Soldiers mobilized for active federal service
    in support of Operation Noble Eagle and Operation Enduring Freedom.
    Even as we transform, Soldiers will remain ready to answer the calls of
    the Nation to defeat well-trained, determined, and dangerous
    adversaries who miscalculate in taking on the best led, the best-
    equipped, and the best-trained army in the world.
        At war and transforming, The Army is accelerating change to harness
    the power of new technologies, different organizations, and revitalized
    leader development initiatives to remain at the head of the line. To
    accomplish this, Army Transformation advances along three major axes
    towards attainment of the Objective Force. We selectively recapitalize
    and modernize today's capabilities to extend our overmatch in staying
    ready to defend our homeland, keep the peace in areas important to the
    Nation, and win the war against global terrorism. Stryker Brigade
    Combat Teams--our Interim Force--will bridge the current operational
    gap between our rapidly-deployable light forces and our later-arriving
    heavy forces, paving the way for the arrival of the Objective Force. By
    2010, The Army's Objective Force--organized, equipped, and trained for
    ground dominance, cyber-warfare, and space exploitation--will provide
    the Nation the capabilities it must have to remain the global leader,
    the strongest economy in the world, and the most respected and feared
    military force, by our friends and allies and our enemies,
    respectively.
        The surprise attacks against our Nation and Operation Enduring
    Freedom, in response to those attacks, validated The Army Vision and
    provided momentum to our efforts to transform ourselves into an
    instrument of national power that provides full spectrum operational
    capabilities that are strategically responsive and capable of decisive
    victory. In a little over three years, we have begun to realize The
    Army Vision--People, Readiness, and Transformation.
        The transforming Army is enriching as a profession and nurturing to
    families whose sacrifice has borne the readiness of the force for the
    past 10 years. Our Well-Being initiatives are our commitment to reverse
    this trend by giving our people the opportunity to become self-reliant;
    setting them up for personal growth and success; aggressively investing
    in family housing; and revitalizing Single-Soldier living space in our
    barracks. Our manning initiatives have filled our line divisions and
    other early deploying units to dampen the internal turbulence of
    partially filled formations and help put a measure of predictability
    back into the lives of our families.
        The Army has carefully balanced the risk between remaining ready
    for today's challenges and preparing for future crises. With unwavering
    support from the Administration, the Congress, our Soldiers, and
    Department of the Army Civilians, The Army has made unprecedented
    progress in its efforts to transform.
        We will achieve Initial Operating Capability (IOC) for the first
    Stryker Brigade Combat Team (SBCT) this summer and demonstrate the
    increased responsiveness, deployability, agility, versatility,
    lethality, survivability, and sustainability that SBCTs provide to
    Combatant Commanders. In a little over three years from initial concept
    to fielded capability, the SBCTs will allow us to glimpse the potential
    for acquisition reform in paving the way for delivery of the Objective
    Force.
        We have constructed the framework for achieving the Objective Force
    this decade: a Transformation Campaign Plan with Roadmap; the Objective
    Force White Paper; the Operational and Organizational plans for the
    Objective Force Unit of Action; and the Operational Requirements
    Document for the Future Combat System of Systems.
        Additionally, The Army is poised to fill ground maneuver's most
    critical battlefield deficiency--armed aerial reconnaissance--with
    Comanche, a capable, survivable, and sustainable aircraft that is a
    cornerstone of the Objective Force.
        All along the way, we have tested our concepts in wargames and
    experiments, checked and rechecked our azimuth to the Objective Force
    weekly and monthly, and look forward to a successful Future Combat
    System Milestone B Defense Acquisition Board decision in May of this
    year.
        However, we cannot accelerate Army Transformation without
    transforming the way The Army does business--from transformation of
    logistics and acquisition to personnel and installation transformation.
    Revolutionizing Army business management practices achieves the best
    value for taxpayers' dollars; conserves limited resources for
    investment in People, Readiness, and Transformation; enhances
    management of personnel systems, installations and contracting; and
    augments our potential to accelerate arrival of the Objective Force.
    Changing The Army is first about changing the way we think, and better
    business practices represent practical application of common sense
    initiatives that best serve The Army and our Nation.
        We are proud of our progress. We are grateful for the strong
    Congressional support that has helped put The Army on its approach
    march to the Objective Force. The Army 2003 Posture Statement describes
    our tremendous progress in Transformation--an orchestrated campaign,
    synchronized with OSD and Joint Transformation, to achieve the
    Objective Force and keep America's Army the dominant landpower in the
    world.

              STRATEGIC ENVIRONMENT--THE REQUIREMENT TO TRANSFORM

       During the last two decades of the 20th Century, information-age
    technologies dramatically changed the political, economic, and military
    landscapes. Desert Shield, Desert Storm, and operations in Kuwait,
    Bosnia, and Kosovo illustrated the requirement for transforming our
    forces to meet the evolving, strategic requirements of our Nation.
    Survivable and extremely lethal, our heavy forces effectively met the
    requirements for which they were designed; yet, they were slow to
    deploy and difficult to sustain. Conversely, our light forces were
    rapidly deployable, but they lacked the protection, lethality, and
    tactical mobility that we seek across the spectrum of military
    operations. We were successful in winning the Cold War and, as a
    result, smaller than we had been in 40 years. The Army no longer had
    the luxury of specialized forces built to confront a single and
    narrowly defined threat like the Warsaw Pact countries.
        Today's challenges are more complex; threats are elusive and
    unpredictable. The fight against international terrorism has
    overshadowed, but not eliminated, other potential crises. Tension
    between India and Pakistan persists; stability between China and Taiwan
    is tenuous; and concern over North Korea escalates. Threats of
    transnational terrorism and the proliferation of weapons of mass
    destruction (WMD)--often financed by organized crime, illicit drug
    transactions, trafficking in women and children, and the sale of arms--
    further complicate the security environment. Geopolitical trends such
    as scarce resources, youth population-spike in underdeveloped
    countries, aging populations in developed countries, and the growth of
    mega-cities, among others, presage a future strategic environment of
    diverse and widely distributed threats.
        Fully appreciating the internal and external difficulties that
    profound change engenders, we assessed the operational challenges of
    the new century against the capabilities of our Cold War Army,
    recognized the opportunity to leverage the inherent combat power of the
    technological revolution, and set a clear path ahead--The Army Vision.
        The 2002 National Security Strategy (NSS) reaffirms our military's
    highest priority--defending the United States. To do this effectively,
    we assure our allies and friends; dissuade future military competition;
    deter threats against U.S. interests, allies, and friends; and
    decisively defeat any adversary, if deterrence fails. The NSS directs
    the military to transform to a capabilities-based force ready to
    respond to unpredictable adversaries and security crises. The Objective
    Force meets these NSS requirements, and Army Transformation will
    enhance our ability to conduct rapid and precise operations, achieve
    decisive results at the time and place of our choosing, and safeguard
    the Nation's ability to exercise our right of self-defense through
    preemption, when required.
        The 2001 Quadrennial Defense Review describes a capabilities-based
    approach to defense planning that provides broader military options
    across the operational spectrum, from pre- to post-conflict operations.
    The force-sizing construct--1-4-2-1--takes into account the number,
    scope and simultaneity of tasks assigned the military: it sizes the
    force for defense of the U.S. homeland (1), forward deterrence in four
    critical regions (4), the conduct of simultaneous warfighting missions
    in two regions (2)--while preserving the President's option to call for
    decisive victory in one of those conflicts (1)--and participation in
    multiple, smaller contingency operations.

        THE ARMY--SERVING TODAY, BALANCING RISK, MANAGING TRANSFORMATION

        Soldiers are the most precise and responsive means to strike and
    then control enemy centers of gravity on the ground--where people live,
    work, and govern. American Soldiers are disciplined, professional, and
    trained for success in diverse missions; they are the foundation of a
    flexible force that accomplishes its missions in the non-linear
    battlespace by integrating new, innovative technologies and techniques
    with current systems and doctrine. Our people adapt under the harshest
    conditions, whether in the deserts of Kuwait and the Sinai, the
    mountains and rice paddies of Korea, or the tropics of the Democratic
    Republic of Timor-Leste.
        These demanding commitments mean we must nurture a balance between
    current and near-term readiness and our Transformation to meet future
    challenges. The Army has accepted reasonable operational risk in the
    mid-term in order to fund our Transformation to the Objective Force. To
    avoid unacceptable risk, we are monitoring closely the current
    operational situation as we support the Combatant Commanders in the war
    against terror, conduct homeland defense, and prosecute the long-term
    effort to defeat transnational threats. We have designed and
    implemented the Strategic Readiness System (SRS) to provide a
    precision, predictive tool with which to monitor The Army and make
    appropriate adjustments to preserve current readiness. Our surge
    capacity in the industrial base further reduces current risk by keeping
    production lines warm and responsive. And our first Stryker Brigade
    Combat Team will provide the Combatant Commanders with a new capability
    to further mitigate operational risk--even as we transform to the
    Objective Force.

        REALIZING THE ARMY VISION--PEOPLE, READINESS, AND TRANSFORMATION

        In 1999, The Army announced its vision to transform into a more
    strategically responsive force, dominant across the full spectrum of
    military operations. The Army Vision addresses three essential
    components: People, Readiness, and Transformation. Soldiers are the
    heart of The Army, the centerpiece of our formations, and the
    foundation of our combat power. Readiness remains our overarching
    imperative; it is the means by which we execute our nonnegotiable
    contract with the American people--to fight and win our Nation's wars,
    decisively. To preserve readiness while rapidly changing,
    Transformation advances on three major axes: preserving our Army legacy
    by maintaining readiness and dominance today; bridging the operational
    gap with Stryker Brigades--the Interim Force; and fielding the
    Objective Force this decade to keep The Army dominant in the years
    beyond this decade.
        Realizing The Army Vision requires the concerted effort of the
    entire Army, across all components--from warfighting to institutional
    support organizations. The Army published its Transformation Campaign
    Plan in April 2001 to synchronize and guide this complex undertaking.
    The November 2001 Objective Force White Paper describes the advanced
    capabilities and core technologies needed to build the Objective Force.
    The Army's June 2002 Army Transformation Roadmap defines Transformation
    as a continuous process--with specific waypoints--that increases our
    contributions to the Joint Force while achieving the six Department of
    Defense (DOD) critical operational goals. The result will be a more
    strategically responsive and full spectrum dominant force capable of
    prompt and sustained land combat operations as a member of the joint
    force.
        In support of the emerging joint operational concepts and
    architectures, The Army--as the major landpower component--continues to
    develop ground concepts for a full spectrum, and multidimensional
    force. These concepts are producing a Joint Force that presents
    potential enemies with multiple dilemmas across the operational
    dimensions--complicating their plans, dividing their focus, and
    increasing their chances of miscalculation.
        In future joint operations, Objective Force units will be capable
    of directing major operations and decisive land campaigns with Army
    headquarters. Objective Force headquarters at all levels will provide
    the Joint Force Commander (JFC) with seamless, joint battle command and
    decision superiority. The modularity and scalability of our Objective
    Force formations will provide an unprecedented degree of flexibility
    and adaptability to the Combatant Commander--providing the right force
    at the right time for decisive outcomes.

                       PEOPLE--OUR MOST VALUABLE RESOURCE

        The Army Vision begins and ends talking about people. People are
    central to everything else we do in The Army. Platforms and
    organizations do not defend this Nation; people do. Units do not train,
    stay ready, grow and develop leadership--they do not sacrifice and take
    risks on behalf of the Nation. People do. Institutions do not
    transform; people do. People remain the engine behind all of our
    magnificent moments as an Army, and the well-being of our people--the
    human dimension of our Transformation--is inextricably linked to Army
    readiness.
        In our Vision, we recommitted ourselves to doing two things well
    each and every day--training Soldiers and civilians and growing them
    into competent, confident, disciplined, and adaptive leaders who
    succeed in situations of great uncertainty. We are dedicated to
    preparing our Soldiers to lead joint formations, to enabling our
    headquarters to command and control joint forces, and to providing to
    those joint formations the capabilities only The Army can bring to the
    fight: the ability to control terrain and populations.

    Manning the Force
        The objective of our manning strategy is to ensure we have the
    right people in the right places to fully capitalize on their
    warfighting expertise--this is The Army's commitment to the Nation,
    Army leaders, Soldiers, and our families. Correctly manning our units
    is vital to assuring that we fulfill our missions as a strategic
    element of national policy; it enhances predictability for our people;
    and it ensures that leaders have the people necessary to perform their
    assigned tasks. In fiscal year 2000, we implemented a strategy to man
    our forces to 100 percent of authorized strength, starting with
    divisional combat units. The program expanded in fiscal year 2001 and
    fiscal year 2002 to include early deploying units. In fiscal year 2002,
    we maintained our manning goals and continued to fill our Divisions,
    Armored Cavalry Regiments, and selected Early Deploying Units to 100
    percent in the aggregate, with a 93 to 95 percent skill and grade-band
    match. We remain on target to accomplish our long-term goal of filling
    all Army units to 100 percent of authorized strength.

    Recruiting and Retaining the Force
        In 1999, The Army missed its recruiting goals for the Active
    Component (AC) by about 6,300 inductees, and for the Reserve Component
    by some 10,000. Our recruiting situation was simply unacceptable, and
    we committed ourselves to decisive steps and reversed that trend.
        In fiscal year 2002, The Active Component achieved 100 percent of
    its goal in recruiting and retention--for the third consecutive year.
    The Army exceeded its AC 79,500 enlisted accession target in fiscal
    year 2002 and exceeded our aggregate fiscal year 2002 retention
    objective of 56,800 Soldiers in all three categories by 1,437. We are
    poised to make the fiscal year 2003 accession target of 73,800, and we
    expect to meet our Active Component fiscal year 2003 retention target
    of 57,000. The fiscal year 2004 accession target is set at 71,500.
        The Army Reserve has met mission for the last two years, and its
    recruiting force is well structured to meet fiscal year 2004
    challenges. The Army Reserve continues to maintain a strong Selected
    Reserve strength posture at 205,484 as of January 17, 2003--over 100.2
    percent of the fiscal year 2003 End Strength Objective. Overcoming many
    recruiting and retention challenges in fiscal year 2002, the Army
    National Guard (ARNG) exceeded endstrength mission, accessions were
    104.5 percent of goal, and we exceeded reenlistment objectives.
        To ensure that we continue to recruit and retain sufficient
    numbers, we are monitoring the current environment--the global war on
    terrorism (GWOT) and frequent deployments--to determine impact on
    morale, unit cohesiveness, combat effectiveness, and support of Well-
    Being programs that draw quality people to The Army. We continue to
    examine innovative recruiting and retention initiatives. The challenges
    we face in fiscal year 2003 and 2004 are two-fold: increase recruiter
    productivity and recruiting resources necessary to maintain recruiting
    momentum when the economy becomes more robust. Resourcing recruiting
    pays dividends well beyond accessions in the year of execution. For
    example, Army advertising in fiscal year 2002 influenced not only
    fiscal year 2002 accessions, but also potential recruits who will be
    faced with enlistment decisions in fiscal year 2003 and beyond.

                   RESERVE COMPONENT FULL-TIME SUPPORT (FTS)

        Today, more than 50 percent of our Soldiers are in the Reserve
    Component (RC). The GWOT and Homeland Defense are significant
    undertakings that demand a high level of resourcing. The RC has been
    key to our success in these operations. To ensure The Army's RC
    continues to meet ever-increasing demands with trained and ready units,
    The Army plans to increase Full-Time Support authorizations 2 percent
    each year through fiscal year 2012, increasing the FTS from the current
    level of 69,915 to a level of 83,046. The Army recognizes additional
    Full-Time Support authorizations as the number one priority of the Army
    National Guard and Army Reserve leadership.

                               CIVILIAN COMPONENT

        As a comprehensive effort to consolidate, streamline, and more
    effectively manage the force, The Army has begun an initiative to
    transform our civilian personnel system. High quality, well-trained
    civilians are absolutely essential to the readiness of our force and
    our ability to sustain operations today and in the future. Recruiting,
    training, and retaining a highly skilled, dedicated civilian workforce
    is critical in meeting our obligations to the Combatant Commanders and
    the Nation. Aggressive transformation of our civilian force--in which
    projections through fiscal year 2005 indicate a 16 percent annual
    turnover due to retirements and other losses--will ensure we continue
    to meet those obligations.
        As of fiscal year 2002, The Army employed 277,786 civilian
    personnel. To forecast future civilian workforce needs with precision,
    we developed the Civilian Forecasting System, a sophisticated
    projection model that predicts future civilian personnel requirements
    under various scenarios. The Army is working closely with the Office of
    the Secretary of Defense (OSD) and other federal agencies to
    demonstrate the power of this system so they can fully leverage its
    capabilities, as well.
        The Civilian Personnel Management System XXI (CPMS XXI) has
    identified the reforms necessary to hire, train, and grow a civilian
    component that supports the transforming Army. To achieve this, we have
    redefined the way civilians are hired, retained, and managed. Mandatory
    experiential assignments will become the vehicle by which we develop
    future leaders. CPMS XXI fully responds to current mandates in the
    President's Management Agenda and incorporates the results of the Army
    Training and Leader Development Panels. For example, two initiatives
    for recruiting well-trained civilians are:
      --The Army Civilian Training, Education, and Development System--a
            centrally managed program that accesses and trains civilian
            interns and grows a resource pool of personnel who can accede
            to senior professional positions.
      --The DOD Appropriations Act for fiscal year 2002 and fiscal year
            2003 provided Direct Hire Authority for critical, hard-to-fill
            medical health care occupations and enabled the reduction in
            average fill-time for these positions to 29 days.

                                ARMY WELL-BEING

        The readiness of The Army is inextricably linked to the well-being
    of our people, and Army Well-Being is the human dimension of our
    Transformation. Well-Being responds to the physical, material, mental,
    and spiritual needs of all Army people--Soldiers, civilians, retirees,
    veterans, and their families. We recognize the fundamental relationship
    between Well-Being programs and institutional outcomes such as
    readiness, retention, and recruiting. To support mission preparedness
    as well as individual aspirations, Well-Being integrates policies,
    programs, and human resource issues into a holistic, systematic
    framework that provides a path to personal growth and success and gives
    our people the opportunity to become self-reliant. We recruit Soldiers,
    but we retain families--Well-Being programs help make The Army the
    right place to raise a family. And when our families are cared for,
    Soldiers can better focus on their mission--training, fighting, and
    winning our Nation's wars, decisively.
        Soldiers appreciate the Nation's devotion to them, and they are
    grateful for the country's recognition of their service and sacrifices.
    Recent improvements to the Montgomery GI Bill, Tricare for Life,
    Tricare Reform, Retired Pay Reform, the 4.1 percent general pay
    increase, and additional pay increases in 2003, are all important to
    Soldiers and their families. These initiatives have helped The Army
    respond to the well-being needs of our people. Army voluntary education
    programs improve our combat readiness by expanding Soldier skills,
    knowledge, and aptitudes to produce confident, competent leaders. Other
    Well-Being initiatives include:
      --Spouse Employment Summit.--The Army is developing partnerships with
            the private sector to enhance employment opportunities for Army
            spouses and provide improved job portability for them.
      --Spouse Orientation and Leader Development (SOLD).--SOLD connects
            Army spouses and enhances their opportunity to serve as valued
            leaders who contribute to the readiness and future of The Army
            and our Nation.
      --Army University Access Online.--Army offers Soldiers access to a
            variety of on-line, post-secondary programs and related
            educational services. www.Army.com is a comprehensive web-
            portal widely accessible to Soldiers, including those in
            Afghanistan, Bosnia, and Kuwait.
      --In-State Tuition.--To level the playing field for access to
            education opportunities, The Army is working to encourage
            states to grant in-state status for military personnel and
            families at public colleges and universities in their Soldier's
            state of legal residence and state of assignment.
      --High School Senior Stabilization.--This policy enhances
            predictability by allowing families to request stabilization at
            their sponsor's current duty location if they have a child who
            will graduate from high school during that year.
      --Secondary Education Transition Study (SETS) Memorandum of Agreement
            (MOA).--Facilitated by The Army, this agreement among
            participating school superintendents is their commitment to
            partner and improve high school transitions for DOD children.
            Currently, over 110 school superintendents have signed the SETS
            MOA.

       LEADER DEVELOPMENT--TRAINING SOLDIERS AND CIVILIANS, AND GROWING
                                    LEADERS

        The Army is a profession--the Profession of Arms. Conducting
    decisive ground combat operations in defense of the United States and
    its interests is a core competency of this profession. The development
    of each member of The Army is the foundation of lifelong devotion to
    duty--while in uniform and upon returning to the civilian sector.
        By its nature, our profession is extraordinarily complex and
    dangerous. The American people entrust The Army with the sacred
    responsibility to apply lethal force in defense of U.S interests. As
    such, the Profession of Arms must remain firmly grounded in
    constitutional values and must constantly change and grow to preserve
    its competitive advantage in an evolving strategic environment. At all
    levels, our leaders--military and civilian--must apply their
    professional knowledge in increasingly varied and unique situations
    that are characteristic of today's strategic environment. Ultimately,
    we must grow professional Army leaders who provide wise and discerning
    military judgments founded on long experience and proven professional
    expertise. This capacity is developed only through a lifetime of
    education and dedicated service--in peace and in war.
        Soldiers serve the Nation with the full realization that their duty
    may require them to make the supreme sacrifice for others among their
    ranks. Soldiers fighting the war on terrorism today, those who will
    fight our future wars, and those who have fought in our past wars are
    professional warfighters and a precious national asset. To ensure we
    remain the greatest landpower in the world defending the greatest
    country in the world, The Army and the Nation rely upon their unique
    and hard-earned experiences and skills. To develop the operational
    skills required to defend the Nation, training must remain our number
    one priority.
        The evolving strategic environment, the gravity of our
    responsibilities, and the broad range of tasks The Army performs
    require us to review and periodically update the way we educate, train,
    and grow professional warfighters. The Army's strategic
    responsibilities to the Nation and Combatant Commanders now embrace a
    wider range of missions. Those missions present our leaders with even
    greater challenges than previously experienced. Therefore, leader
    development is the lifeblood of the profession. It is the deliberate,
    progressive, and continuous process that trains and grows Soldiers and
    civilians into competent, confident, self-aware, and decisive leaders
    prepared for the challenges of the 21st Century in combined arms,
    joint, multinational, and interagency operations.
        In June 2000, we convened the Army Training and Leader Development
    Panel (ATLDP). The ATLDP's purpose is to identify skill sets required
    of Objective Force Soldier and civilian leaders. Further, ATLDP
    assesses the ability of current training and leader development systems
    and policies to enhance these required skills. In May 2001, The Army
    Training and Leader Development Panel Phase I (Officer Study)
    identified seven strategic imperatives and generated 89
    recommendations. With those, we validated the requirement to transform
    our Officer Education System (OES)--from the Officer Basic Course
    through the Command and General Staff Officer Course. Additionally, the
    panel reconfirmed the value of Joint Professional Military Education II
    (JPME II) in preparing our leaders for joint assignments. The most
    significant product of the officer ATLDP is our OES Transformation.
        ATLDP Phase I (Officer Study) identified three high-payoff
    institutional training and education initiatives for lieutenants,
    captains, and majors. The first of these is the Basic Officer Leader
    Course (BOLC). BOLC will provide a tough, standardized, graduate-level,
    small-unit leadership experience for newly commissioned officers. The
    second of these initiatives is the Combined Arms Staff Course for staff
    officers, and the Combined Arms Battle Command Course for company
    commanders. Both courses will capitalize on advanced distributed
    learning and intensive resident training methods. The third initiative,
    Intermediate Level Education (ILE), will provide all majors with the
    same common core of operational instruction, and it will provide
    additional educational opportunities that are tailored to the officer's
    specific career field, branch, or functional area. Beyond ILE, Army
    officers continue to attend Joint or Senior Service Colleges to develop
    leader skills and knowledge appropriate to the operational and
    strategic levels of the profession.
        Completed in May 2002, the ATLDP Phase II (NCO Study) resulted in
    78 findings and recommendations extending across six imperatives--Army
    culture, NCO Education Systems (NCOES), training, systems approach to
    training, training and leader development model, and lifelong learning.
    Among others, the ATLDP Phase II recommended building new training and
    leader development tools for NCOs to replace current methods, as
    required. The ATLDP Phase III (Warrant Officer Study) culminated with
    63 recommendations extending across four crucial imperatives.
    Recommendations included clarifying the warrant officer's unique role
    in The Army and improving the Warrant Officer Education System to
    ensure timely training and promotion. The Civilian Training and Leader
    Development Panel (Phase IV) study results are complete, and we are
    forming the Implementation Process Action Team (I-PAT). I-PAT will
    identify actions The Army must take to increase the professional
    development of our civilian workforce. At the senior leader level, The
    Army initiated the Army Strategic Leadership Course (ASLC). The program
    is aimed at teaching principles of strategic leadership, with emphasis
    on visioning, campaign planning, leading change, and Transformation. To
    date, we have completed twelve of the foundation courses and three
    alumni courses, training the majority of The Army's general officers.

                      READINESS--WINNING OUR NATION'S WARS

    Homeland Security (HLS)
        Defending our Nation--abroad and at home--against foreign and
    domestic threats is fundamental to The Army's legacy, and our
    warfighting focus provides capabilities relevant to HLS requirements.
    HLS missions range from traditional warfighting competencies that
    defeat external threats to the non-combat tasks associated with
    supporting civil authorities in domestic contingencies. Operation Noble
    Eagle mobilized over 16,000 Army National Guard Soldiers to protect
    critical infrastructure. These Soldiers assisted the Department of
    Transportation in securing our Nation's airports while also playing a
    vital role in securing our Nation's borders. The Army is moving forward
    to provide one Civil Support Team to each state, as required by the
    National Defense Authorization Act for fiscal year 2003. The Civil
    Support Teams support Incident Commanders and identify Chemical,
    Biological, Radiological, Nuclear, and Explosive (CBRNE) agents and
    substances, assess current and projected consequences, advise on
    response measures, and assist with appropriate requests for additional
    support. To date, OSD has certified 30 of 32 teams, and The Army is
    working to establish additional teams. Collectively, the certified
    teams have performed 890 operational missions since September 11, 2001.
    The Army remains committed to HLS, dedicating Active Component (AC) and
    Reserve Component (RC) staffs to focus on training, doctrine, planning,
    and execution of DOD missions in support of civil authorities.

    Missile Defense
        Robust Missile Defense is a vital warfighting requirement that
    protects both our homeland and our deployed forces. Missile Defense
    includes far more than a reactive capability to shoot down missiles in
    their reentry phase. Missile Defense requires a coherent system of
    sensors; battle command; weapons systems; and active, passive,
    proactive, and reactive operational concepts, all aimed at destroying
    enemy missiles--not only during their reentry phases. Missile Defense
    must also be able to destroy enemy missiles on the ground, before they
    launch or during their boost phase once launched. Missile Defense is
    inherently a joint capability to which The Army is a major contributor.
        The Army is deploying and employing Ground Mobile Defense assets to
    contribute to this warfighting capability, accelerating the fielding of
    the Patriot Advanced Capability 3 (PAC3) system, and developing
    directed energy weapons that will bring new defense measures to The
    Army and the Nation. We are postured to assume control of the Medium
    Extended Air Defense System (MEADS) program in fiscal year 2003 and
    intend to begin fielding by fiscal year 2012.
        MEADS is a transformational program of Objective Force quality and
    a significant improvement on Patriot's capabilities. It will be more
    mobile and more deployable (C-130 capable) than Patriot and cover a
    360-degree radius to Patriot's 120 degrees. It will be effective
    against low radar, cross section cruise missile targets; and require
    only 30 percent of Patriot's manpower. And MEADS will be more accurate
    and more sustainable than Patriot.

    Chemical Demilitarization
        In Section 1412 of Public Law 99-145, Congress directed the DOD to
    destroy the United States' chemical weapons stockpile. In turn, the
    Secretary of Defense delegated management of all chemical munitions
    disposal to the Department of the Army. On November 29, 2000, the
    Johnston Atoll Chemical Agent Disposal System, using incineration-based
    technology, completely destroyed the last stockpiles stored at the
    Atoll, and closure operations began in January 2001. The Tooele
    Chemical Agent Disposal Facility has incinerated 44 percent of the
    chemical agents and 81 percent of the munitions stored there. Disposal
    operations at these two sites destroyed 30 percent of the total U.S.
    chemical weapons stockpiles. Construction of incineration facilities at
    Anniston, Alabama; Umatilla, Oregon; and Pine Bluff, Arkansas, is
    complete. Systemization activities are on-going at Aberdeen, Anniston,
    Umatilla, and Pine Bluff. The plan to accelerate the disposal of bulk
    agents using a neutralization process at Aberdeen, Maryland, and
    Newport, Indiana, has been approved. Anniston and Aberdeen are
    scheduled to start destruction in second quarter fiscal year 2003, and
    Newport is scheduled to begin in first quarter fiscal year 2004.
        To comply with treaty agreements and the Congressional mandate, we
    must complete the destruction of these weapons by 2007. The treaty
    allows for a one time, five-year extension to this deadline. With
    continued funding and minimal schedule changes, we will safely destroy
    the U.S. stockpile of lethal chemical agents and munitions at eight
    existing CONUS sites.

    Training the Force
        In October 2002, The Army released Field Manual (FM) 7-0, Training
    the Force. Synchronized with other field manuals and publications being
    updated to respond to changes in Army, joint, multinational, and
    interagency operations, FM 7-0 is the capstone doctrinal manual for
    Army training and leader development. It provides the developmental
    methodology for training and growing competent, confident Soldiers, and
    it addresses both current and future Objective Force training
    requirements.
        We are transforming the way we fight future wars, and The Army is
    participating fully in a DOD-sponsored program to transform how forces
    train to fight. This effort involves four major initiatives: building
    upon existing service interoperability training; linking component and
    joint command staff planning and execution; enhancing existing joint
    training exercises to address joint interoperability; and studying the
    requirement for dedicated joint training environments for functional
    warfighting and complex joint tasks. The Army is scheduled to host the
    first joint National Training Center (NTC) event at Fort Irwin,
    California, in May 2003. During June 2003, the U.S. Army Forces Command
    will execute the second joint NTC event--JCS exercise Roving Sands.
        During the late 1990s, funding for the recapitalization and
    modernization of The Army's Combat Training Centers was reduced,
    eroding their capability to support their critical missions.
    Additionally, the Multiple Integrated Laser Engagement System equipment
    and current force instrumentation systems have become difficult to
    maintain. The Army's Combat Training Center modernization program will
    ensure that our premier training areas (NTC at Fort Irwin, Combat
    Maneuver Training Center in Germany, the Joint Readiness Training
    Center (JRTC) at Fort Polk, and the Deep Attack Center of Excellence
    near Gila Bend, Arizona) are modernized to provide high quality,
    realistic, full-spectrum joint training. To address these problems, The
    Army will invest nearly $700 million over the next six years to
    modernize these training centers.

    OPTEMPO
        In accordance with Congressional directives, The Army developed a
    new methodology to prepare budget requests that accurately reflect
    Operations and Maintenance requirements. In the report submitted in
    July 2002, The Army outlined updated processes that ensure consistency
    in reporting of tank miles and reflect requirements and execution with
    more precision. Management controls initiated in fiscal year 2001 to
    prevent migration of OPTEMPO funds to other areas were highly
    successful and remain in effect.
        The Army's combined arms training strategy determines the
    resourcing requirements to maintain the combat readiness of our forces.
    For the Active Component, The Army requires 800 ground OPTEMPO miles
    per year for the M1 Abrams tank and corresponding training support; the
    Active Component flying hour program requires an average of 14.5 live
    flying hours per aircrew each month. Both Army National Guard and the
    Army Reserve aircrew training strategies require 9.0 hours per crew
    each month. The ARNG ground OPTEMPO requirement is a composite average
    of 174 miles in fiscal year 2004, and the Army Reserve (USAR) ground
    OPTEMPO requirement is 200 tank-equivalent miles in fiscal year 2004.
        While this describes The Army's training strategy, actual execution
    levels from unit to unit have varied depending upon factors such as on-
    going operations, safety of flight messages, and adequate manning of
    combat formations. To this end, The Army has fully funded its AC ground
    OPTEMPO requirement, while its AC flying program is funded to its
    historical execution level of 13.1 flying hours. The RC air and ground
    OPTEMPO are similarly funded to their execution levels, rather than
    their requirement. Although The Army has not always been able to
    execute the training strategy, we have taken steps to have all units
    execute the prescribed training strategy in fiscal year 2003, fiscal
    year 2004, and beyond.

    Force Protection and Anti-terrorism
        Force protection consists of those actions to prevent or mitigate
    hostile actions against Department of Defense personnel and includes
    family members, resources, facilities, and critical information. In the
    war on terrorism, the area of operations extends from Afghanistan to
    the East Coast and across the United States. Naturally, Force
    Protection and Antiterrorism measures have increased across Army
    installations in the Continental United States (CONUS) and overseas.
        Findings from the Cole Commission, the Downing Report on the Khobar
    Towers bombing, and Army directives to restrict access to installations
    have all led to thorough assessments by the Department of the Army
    Inspector General, the Deputy Chief of Staff for Operations, and
    commanders. Our efforts focus on improved force protection policy and
    doctrine; more rigorous training and exercises; improved threat
    reporting and coordination with national intelligence and law
    enforcement agencies; enhanced detection and deterrence capabilities
    for Chemical, Biological, Radiological, Nuclear, and Explosive (CBRNE)
    threats; increased capabilities and protection for access control; and
    expanded assessments of Major Commands (MACOM) and installation force
    protection programs. Both operational and installation environments
    rely upon secure, networked information infrastructure to execute daily
    enterprise-wide processes and decision-making, so the parameters of
    force protection include contemporary and evolving cyber threats, as
    well.
        The Army's Information Systems Security Program (ISSP) secures The
    Army's portion of the Global Information Grid, secures the digitized
    force, and supports information superiority and network security
    defense-in-depth initiatives. ISSP provides the capability to detect
    system intrusions and alterations and react to information warfare
    attacks in a measured and coordinated manner. To the greatest extent
    possible, it protects warfighters' secure communications--from the
    sustaining base to the foxhole.
        Soldiers, Active and Reserve, are heavily engaged in force
    protection and anti-terrorism missions. Soldiers guard military
    installations, nuclear power plants, dams and power generation
    facilities; tunnels, bridges, and rail stations; and emergency
    operations centers. During the 2002 Winter Olympics in Salt Lake City,
    Utah, nearly 1,500 ARNG Soldiers provided security, and Soldiers
    guarded key infrastructure sites during Super Bowl XXXVII in January
    2003. Over 12,500 Reserve Component Soldiers are currently mobilized
    for Operation Noble Eagle to fulfill Force Protection requirements, and
    in February 2003, over 8,000 Army National Guard Soldiers will support
    Air Force security requirements--a requirement that could reach 9,500
    Soldiers. Security of detention facilities and detainees at Guantanamo
    Bay Detention--a long-term detainee mission--requires approximately
    1,500 Army personnel, 50 percent of whom are Military Police. Army
    Reserve Internment and Resettlement battalions on 6-month rotations
    impact military police availability to CONUS Force Protection
    requirements.

    Sustainment
        The Army is revolutionizing its logistics process. One initiative,
    the Single Stock Fund (SSF), redirected more than $540 million worth of
    secondary items from stocks to satisfy customer demands between May
    2000--SSF inception--and November 2002. During that same period, we
    redistributed more than $218 million worth of secondary items from the
    authorized stockage levels to meet higher priority readiness
    requirements. By extending national visibility of stockage locations
    and capitalizing inventories into the Army Working Capital Fund, we
    reduced customer wait time by an average of 18.5 percent. The SSF will
    continue to reduce inventory requirements and generate even more
    savings for The Army by creating greater flexibility for the management
    of inventories.
        Another initiative, the National Maintenance Program (NMP),
    enhances weapon system readiness, reliability, and availability rates
    by bringing Army Class IX repair parts to a single national standard.
    Ultimately, increased reliability will reduce overall weapon system
    Operating and Support cost. Additionally, the NMP centralizes the
    management and control of Army maintenance activities for components
    and end items. NMP will produce appropriately sized Army maintenance
    capacity that still meets total maintenance requirements.

    Strategic Readiness Reporting
        The National Defense Authorization Act for fiscal year 1999
    requires the Secretary of Defense to implement a comprehensive
    readiness reporting system that objectively measures readiness to
    support the NSS. The Army's Strategic Readiness System (SRS) responds
    to and provides a baseline in achieving this critical initiative.
        SRS is a precision readiness measurement tool that provides Army
    leadership with accurate, objective, predictive, and actionable
    readiness information to dramatically enhance resource management
    toward one end--strategic readiness to defend the United States. The
    Army Scorecard--a product of SRS--will integrate readiness data from
    the business arena and the operating, generating, and sustaining forces
    of both the Active and Reserve Component. Army Scorecard methodology
    focuses on four critical areas: People--investing in Soldiers and their
    families; Readiness--maintaining the support capability to the
    Combatant Commanders' operational requirements; Transformation--
    transforming The Army into the Objective Force; and application of
    sound business practices.
        SRS markedly improves how we measure readiness. It gathers timely
    information with precision and expands the scope of the data
    considered. We are further developing this system to leverage leading
    indicators and predict trends--solving problems that affect readiness
    before they become problems, from well-being to weapons platforms. SRS
    will help enable The Army preserve readiness to support Combatant
    Commanders, invest in Soldiers and their families, identify and adopt
    sound business practices, and transform The Army to the Objective
    Force.

    Installations
        Army installations are our Nation's power projection platforms, and
    they provide critical training support to The Army and other members of
    the joint team. Additionally, Soldiers, families, and civilians live
    and work on Army installations. The quality of our infrastructure
    directly affects the readiness of The Army and the well-being of our
    Soldiers, families, and civilians.
        The Army has traditionally accepted substantial risk in
    infrastructure to maintain its current warfighting readiness. However,
    a decade of chronic under funding has led to a condition in which over
    50 percent of our facilities and infrastructure are in such poor
    condition that commanders rated them as ``adversely affecting mission
    requirements.'' Our facilities maintenance must improve. Over the past
    two years, with the help of the Administration and Congress, The Army
    has begun to rectify this situation with significant increases in
    funding and innovative business practices. These efforts have been
    dramatically successful as we continue to correct a problem that was 10
    years in the making. Thus, in an effort to prevent future degradation
    of our facilities, The Army has increased its funding for facilities
    sustainment to 93 percent of requirement beginning in fiscal year 2004.

    Transformation of Installation Management (TIM)
        Recognizing the requirement to enhance support to commanders, the
    Secretary of the Army directed the reorganization of The Army's
    management structure. On October 1, 2002, The Army placed the
    management of Army installations under the Installation Management
    Agency (IMA). IMA is a new field-operating agency of the Assistant
    Chief of Staff for Installation Management (ACSIM). Its mission is to
    provide equitable, efficient, and effective management of Army
    installations worldwide to support readiness; enable the well-being of
    Soldiers, civilians and family members; improve infrastructure; and
    preserve the environment. This new management approach eliminates the
    migration of base operations funds to other operational accounts below
    the HQDA level. It also enables the development of multi-functional
    installations to support evolving force structure and Army
    Transformation needs. The Army is poised to capitalize on opportunities
    TIM gives us to provide excellence in installations.
        Two programs that significantly increase the well-being of our
    Soldiers and their families are the Barracks and the Family Housing
    programs. The Army established the Barracks Upgrade Program (BUP) in
    the late 1990's to improve single Soldiers' housing conditions. Through
    2002, we have upgraded or funded-for-upgrade 70 percent of our
    permanent party barracks to Soldier suites that consist of two single
    bedrooms with a shared bath and common area. The Army will continue the
    BUP until all permanent party barracks achieve this standard.
        With the strong support of Congress, The Army established the
    Residential Communities Initiative (RCI) for our families. This program
    capitalizes on commercial expertise and private capital to perform a
    non-core function for The Army--family housing management. The program
    provides greater value to The Army by eliminating the housing deficit
    at our first eleven sites, while leveraging a $209 million Army
    investment into $4.1 billion of initial private development. The Army's
    privatization program began with four pilot projects and will expand to
    18 active projects by the end of fiscal year 2003. Pending OSD and
    Congressional approval, 28 projects are planned through 2006 that will
    impact over 72,000 housing units or 80 percent of Army Family Housing
    in the United States. By the end of 2007, we will have the programs and
    projects in place to meet the OSD goal of eliminating inadequate family
    housing. We will accomplish this goal through RCI and increased Army
    investment in family housing Military Construction (MILCON) at non-
    privatized installations. The Reserve Component (RC) enhances RCI
    through real property exchange authority that is only available to the
    RC. This legislative authority allows the exchange of RC owned property
    with public or private entities and has a tremendous potential to
    improve future Reserve Component infrastructure at no governmental
    cost.
        The Army has also aggressively reduced its financial burden and
    physical footprint by disposing of 34 percent of its facilities from a
    1990 high of 116 billion square feet. The Army anticipates that the
    Congressional fiscal year 2005 Base Realignment and Closure (BRAC)
    authority will permit additional appropriate reductions. BRAC will
    enable The Army to dispose of excess infrastructure and realign the
    remaining facilities with the requirements of the transforming Army and
    the Objective Force. BRAC will also allow The Army to re-allocate
    resources from closed or realigned installations to other high priority
    requirements.
        The Army continues to improve its utilities infrastructure by
    divesting itself of non-core utility systems' operation and maintenance
    through privatization. As of December 2002, we had privatized 64 of the
    351 systems in the program, and we have an additional 104 presently
    under negotiation.
        As part of our Army Knowledge Management (AKM)--described later in
    more detail--we are modernizing our Installation Information
    Infrastructure--infostructure--to support a network centric, knowledge-
    based Army. The Installation Information Infrastructure Modernization
    Program (I\3\MP) executes a multi-year, $3.2 billion program for
    upgrades to optical fiber and copper cable, installation of advanced
    digital equipment, and upgrades to Defense Global Information Grid
    gateways. This program will ensure worldwide, high-speed data
    connectivity at Army installations. To date, we have completed 22 of 95
    CONUS installations and initiated upgrades at four installations
    outside of the continental United States (OCONUS). We plan to complete
    I\3\MP in 2009.

    Transformation--Changing the Way we Fight
        The Army is fundamentally changing the way we fight and creating a
    force more responsive to the strategic requirements of the Nation. We
    are building a joint precision maneuver capability that can enter a
    theater at the time and place of our choosing, maneuver at will to gain
    positional advantage, deliver precise joint fires and, if necessary,
    close with and destroy the enemy.
        The Objective Force is an army designed from the bottom up around a
    single, networked, integrated C\4\ISR architecture that will link us to
    joint, interagency, and multi-national forces. It will be a rapidly
    deployable, mounted formation, seamlessly integrated into the joint
    force and capable of delivering decisive victory across the spectrum of
    military operations. Consolidated, streamlined branches and military
    operational specialties comprised of professional warfighters will be
    poised to transition rapidly from disaster relief to high-end
    warfighting operations.
        The Objective Force and its Future Combat System of Systems will
    leverage and deliver with precision the combat power of joint and
    strategic assets. It is a capabilities-based force that rapidly
    responds to the requirements of the strategic environment in which our
    Soldiers will be the most strategically relevant and decisively capable
    landpower--no matter the mission, no matter the threats, no matter the
    risks.
        In the final analysis, The Army's combat power does not wear tracks
    or wheels--it wears boots. No platform or weapon system can match a
    Soldier's situational curiosity and awareness. It is the Soldiers'
    ability to discern and to think, their ingenuity and resourcefulness,
    their endurance and perseverance, and their plain grit that make them
    the most reliable precision weapon in our inventory. Soldiers remain
    the centerpiece of our formations.
        To help guide our Transformation efforts, The Army leverages
    lessons-learned from extensive experimentation and wargaming. We are
    working to harness the power of knowledge, the benefits of science and
    technology, and innovative business solutions to transform both the
    Operational and Institutional Army into the Objective Force. The Army's
    annual Title 10 Wargames provide critical insights for developing the
    Objective Force. Likewise, results from joint experiments--Millennium
    Challenge 2002 and other service Title 10 Wargames like Global
    Engagement, Navy Global, and Expeditionary Warrior, to name a few--also
    inform these efforts.
        The Army is fully committed to joint experimentation as a means to
    examine and assess Objective Force contributions to the strategic,
    operational, and tactical levels of joint warfare. The Army has
    established a joint/Army Concept Development and Experimentation (CD&E)
    Task Force to ensure that Army CD&E efforts are synchronized with joint
    CD&E. This task force makes certain that joint experiment lessons-
    learned inform the design and development of the Objective Force. This
    year, The Army's Title 10 Wargame--co-hosted by Commander, Joint Forces
    Command--will focus on the Joint Force that will fight the next battle.
    Linked to Joint Forces Command's Pinnacle Impact 03 experiment, it will
    be conducted within the context of a future 1-4-2-1 global scenario and
    the emerging Joint Operations Concept. The Army is committed to these
    efforts, and in this budget we have nearly doubled last year's funding
    of these exercises.
        Joint, interagency, multinational, and Army warfighting experiments
    provide invaluable opportunities for The Army to experiment with
    innovative approaches to warfighting and to test new tactics,
    techniques, procedures, organizations, processes, and technology. In
    Millennium Challenge 2002, the largest joint experiment in U.S.
    history, The Army demonstrated four vital capabilities it brings to the
    joint fight: the ability to attain and maintain information superiority
    (knowledge); the ability to conduct decisive maneuver to enable
    dominant joint maneuver; the ability to defeat the opposition in an
    anti-access environment through rapid entry and employment
    capabilities; and the ability to support and sustain rapid combat power
    efficiently by reducing the operational and tactical logistics
    footprint
        To evaluate the effectiveness of the Stryker Brigade Combat Team
    (SBCT) concepts for battalion and company operations in a Joint Force,
    The Army employed a SBCT unit during Millennium Challenge. Less than
    four weeks after Stryker vehicles were delivered to the first unit at
    Fort Lewis, the unit demonstrated rapid air and sealift deployability
    and integrated into the exercise well. Additionally, when given a
    mission on short notice to support a Marine Corps unit in ground
    operations, the SBCT unit demonstrated its agility and versatility.

    Balancing Risk as we Manage Change
        Balancing risk is integral to Army Transformation. To maintain
    current readiness while we transform, we are managing operational risk:
    risk in current readiness for near-term conflicts with future risk--the
    ability to develop new capabilities and operational concepts that will
    dissuade or defeat mid- to long-term military challenges. The Army has
    accepted risk in selective modernization and recapitalization, and we
    continue to assess these risks as we balance current readiness, the
    well-being of our people, Transformation, the war on terrorism, and new
    operational commitments. Since 1999, The Army has terminated 29
    programs and restructured 20 others for a total savings of $12.8
    billion. These funds were reallocated to resource the Stryker Brigades
    and essential Objective Force research and development.
        In Program Budget 2004 and its associated Five-Year Defense Plan
    (FYDP), The Army has generated an additional $22 billion of savings by
    terminating 24 additional systems and reducing or restructuring 24
    other systems. To accelerate achieving the Objective Force capabilities
    and mitigating operational risk, The Army reinvested these savings in
    the development of transformational capabilities in these and other
    programs:
      --Future Combat System--$13.5 billion
      --Precision Munitions--$3.2 billion
      --Sensors and Communications--$2.3 billion
      --Science and Technology--$1.1 billion
      --Missile and Air Defense--$1.1 billion.
        The operational risk associated with the decreased funding for
    certain current programs is acceptable as long as we field Stryker
    Brigades on schedule and accelerate the fielding of the Objective Force
    for arrival, this decade. We will continue to reassess the risk
    associated with system reductions and related organizational changes
    against operational requirements and the strategic environment.

    An Information Enabled Army
        Achieving the full spectrum dominance of the Objective Force
    requires changing the way we fight. Changing the way we fight requires
    a holistic transformation of Logistics, Personnel, Installation
    Management, Acquisition, Aviation, business practices--every aspect of
    The Army must transform. The Objective Force requires innovative
    changes and out-of-the-box ingenuity in the way we take care of our
    people and manage the information and material that enhances their
    readiness and answers their needs--both personal and professional, at
    home and in the short sword warfight at foxhole level. Simply put, we
    cannot achieve the Objective Force capabilities without leveraging the
    full potential of the technological advances that our Nation's
    industrial base and science and technology communities are developing.
    The Army has consolidated management of Information Technologies (IT)
    into a single effort--Army Knowledge Management (AKM). AKM capitalizes
    on IT resources unique to our Nation and harnesses them for
    Transformation, for The Army, and for the Combatant Commanders.
        Information management is critical to achieving The Army Vision,
    and Army Knowledge Management supports Transformation through the
    development and implementation of a network-centric, knowledge-based
    Army architecture interoperable with the joint system. AKM will
    accelerate the Detect-Decide-Deliver planning processes and enable
    warfighters to see the adversary first--before our forces are detected;
    understand the Common Relevant Operating Picture first; act against
    adversaries first; and finish the warfight with decisive victories--see
    first, understand first, act first, finish decisively. AKM will provide
    knowledge at the point of decision for all leaders--from the factory to
    the foxhole.
        Enabling collaborative mission planning and execution among widely
    dispersed locations around the globe, Army Knowledge Management will
    provide a rapid and seamless flow and exchange of actionable
    information and knowledge. The Network-centric operations that AKM
    enables will decrease our logistic footprint and enhance sustainability
    of the Objective Force through multi-nodal distribution networks--
    reaching forward to the theater and back to installations. Advanced
    information technologies will dramatically enhance Battle Command.
    Command, Control, Communications, and Computer (C\4\) decision tools
    seamlessly linked to Intelligence, Surveillance, and Reconnaissance
    (ISR) assets produce a radically improved Common Relevant Operating
    Picture (CROP) and enable Battle Command.
        AKM will dramatically enhance the warfighter's ability to
    distribute, process, fuse, and correlate unprecedented amounts of
    actionable data into information--securely, reliably, and quickly
    enough to enable leaders to synchronize and mass effects for decisive
    results. Network-centric operations enable information awareness,
    information access, and information delivery.
        The Army Knowledge Enterprise (AKE) construct describes The Army's
    process to enable improved strategic and tactical information
    distribution and collaboration. In short, AKE leverages the ingenuity
    and resourcefulness of our people in shaping the environment to achieve
    dominance and helps leaders achieve decision superiority and mission
    efficiencies.
        Integration and refinement of existing Army networks is the first
    step in achieving a network-centric, information-enabled force that
    creates efficiencies and provides secure, reliable, actionable
    information communications. To this end, The Army activated the Network
    Enterprise Technology Command (NETCOM). NETCOM is The Army's single
    authority assigned to operate, manage, and defend The Army's
    information infrastructure. NETCOM has assumed technical control of all
    Army networks--Active, Guard, and Reserve. This new policy allows
    NETCOM to evaluate any system, application, or piece of equipment that
    touches The Army Networks. NETCOM will improve the capacity,
    performance, and security of our networks at every level.
        Among others, one tangible product of NETCOM is the consolidation
    and removal of redundant servers across The Army. This example of
    better business practice will harvest significant savings in
    resources--both dollars and managers--while increasing the
    effectiveness of the network. Since the first quarter fiscal year 2002,
    we have reduced the number of servers Army-wide by 16 percent--311 in
    the National Capitol Region alone.
        Army Knowledge Online (AKO) begins to allow The Army to
    decentralize the management of information. AKO is The Army's secure,
    web-based, internet service that leverages The Army's intellectual
    capital to better organize, train, equip, and maintain our force. It
    gives our people a means to collaborate, to improve their situational
    awareness, and to access their personnel data. Already, hard-copy
    processes that formerly took days and weeks can now be accomplished
    almost instantly--from pay to personnel actions to assignments, to name
    a few. And AKO is just an early glimpse of the potential capabilities
    of a Network-centric, knowledge based organization that harnesses the
    potential of the global infostructure.

                                OPERATIONAL ARMY

    The Objective Force
        The Army is actively engaged in global operations supporting
    Combatant Commanders today, but it is our obligation to prepare for the
    future, as well. The Objective Force is The Army's future full-spectrum
    force that will be organized, manned, equipped and trained to be more
    strategically responsive, deployable, agile, versatile, lethal,
    survivable and sustainable than we are today--across the full spectrum
    of military operations as an integral member of a cohesive joint team.
        The Nation will continue to face adaptive, asymmetric threats that
    capitalize on the power of information. To dominate and maintain
    superiority over these emerging challenges, The Army is changing the
    way we fight--a paradigm shift more significant than the 20th Century's
    introduction of the tank and the helicopter. The Army is changing from
    sequential and linear operations to distributed and simultaneous
    operations. The Objective Force--characterized by networks of people
    enabled with systems that provide actionable information and decision
    superiority--will dissuade, deter or decisively defeat our adversaries
    anytime, anyplace, and anywhere.
        The Objective Force will consist of command structures scaled to
    meet Joint Force Commander requirements and modular combined-arms units
    tailored according to each situation. Objective Force integrated,
    mobile, air-ground teams will conduct mounted and dismounted operations
    and employ both manned and unmanned platforms to achieve decisive
    victories. Capable of forcible entry and operations in austere
    environments to address the spectrum of military operations--from
    humanitarian assistance to warfighting--the Objective Force will
    conduct simultaneous combat and stability operations and master
    transitions between phases of operations. It will be an offensively
    oriented, multi-dimensional force enabled by advanced information
    technologies that give Soldiers real-time intelligence and actionable
    information.
        The Objective Force will arrive in theater combat capable--
    deployment will be synonymous with employment. The Objective Force will
    be strategically responsive and rapidly deployable on the U.S Air Force
    family of inter-theater and intra-theater aircraft. An Objective Force
    Unit of Action (UA) will deploy on approximately one-third the number
    of aircraft required to deploy a heavy brigade combat team today. It
    will be operationally deployable and capable of operational maneuver
    over strategic distances by air, land, or sea. Soldiers will overcome
    anti-access and area denial strategies and environments through
    precision maneuver and decision superiority.
        Equipped with new systems designed to meet the needs of The Army's
    future fighting formations, the Objective Force will be a networked
    system of systems. This system of systems includes Soldiers equipped
    with the Land Warrior system; a family of 18 integrated, synchronized,
    manned and unmanned Future Combat Systems (FCS); and critical
    complementary systems such as the Comanche and the Future Tactical
    Truck System. The components of the FCS are being synchronously
    developed and fielded as a complete family to achieve the warfighting
    capabilities the Nation requires to defeat adaptive, asymmetric
    conventional and unconventional adversaries.
        Soldiers are the centerpiece of The Army's formation--not
    equipment. And Soldiers of the Objective Force will leverage dominant
    knowledge to gain decision superiority over any adversary. They will
    seamlessly integrate Objective Force capabilities with the capabilities
    of joint forces, Special Operations Forces, other federal agencies, and
    multinational forces. The Objective Force Soldiers will enable the
    United States to achieve its national security goals in a crisis,
    rather than simply inflict punitive strikes on an adversary. Employing
    FCS capabilities in formations called Units of Action (UA) and Units of
    Employment (UE), Objective Force Soldiers will provide campaign quality
    staying power--that means precision fire and maneuver to control
    terrain, people, and resources, without having to resort to
    indiscriminate collateral damage. The Land Warrior system will
    integrate individual Soldiers in the network while providing them
    increased protection and lethality. And FCS will give Soldiers the
    capability to destroy any adversary in any weather and environment with
    smaller calibers, greater precision, more devastating target effects,
    and at longer-ranges than available today.
        Joint C\4\ISR--a network-centric information architecture nested
    within the Global Information Grid--will connect the Objective Force's
    system of systems. Capitalizing on the synergistic power of the
    information network enterprise, every Objective Force Soldier and
    platform will be capable of sensing and engaging the enemy while
    maintaining situational awareness of friendly forces. Advanced
    information technologies and C\4\ISR decision tools and assets will
    enhance the Common Relevant Operating Picture (CROP). The Objective
    Force will identify, locate, and engage critical targets with lethal or
    non-lethal affects and assess battle damage on those targets. The joint
    C\4\ISR linkages will enable the attack of targets with whatever joint
    or Army assets are available for immediate employment, whether the
    force is in contact or out of contact. Similarly, enhanced situational
    awareness will facilitate multi-layered active and passive defense
    measures--including both offensive and defensive counter air against
    air and non-air breathing, manned and unmanned aerial vehicles.
        The CROP and Network centric operations will enhance sustainability
    of the Objective Force through multi-nodal distribution networks that
    reach forward to the area of operations or reach back to the Home
    Station Operations Center. Increased reliability through equipment
    design and commonality among the FCS family of systems will enhance
    sustainability while reducing logistics demands. Advanced technologies
    will enable robust Objective Force operations while shrinking the
    logistics footprint and lift requirements of deployed forces.
        The FCS is a transformational approach to meeting this Nation's
    requirements for the Objective Force. We designed and will field the
    FCS family in a carefully balanced manner to avoid optimizing a
    component at the expense of sub-optimizing the overarching capabilities
    of Objective and joint forces. The acquisition and requirements
    development processes are being updated to accommodate the Department
    of Defense's (DOD) direction to field a networked system of systems
    rapidly through spiral development and an open architecture that allows
    maturing technological insertions as they occur.
        The Army embraces the ongoing DOD and Joint Staff Capabilities and
    Acquisition processes reform efforts to achieve revolutionary
    capabilities in the fielding of a new generation of equipment. This
    collaborative DOD and JCS effort enables The Army to design new
    information-age capable organizations holistically, use evolutionary
    acquisition strategies to equip those organizations, and see the
    Objective Force fielded before the end of this decade.

    Science and Technology--Moving Toward the Transformed Army
        Preempting our adversaries' technological surprises over the past
    three years, Army Science and Technology investments are already
    providing America's Army with sustained overmatch in all materiel
    systems. And The Army has increased and focused its Science and
    Technology (S&T) investments. We are demonstrating the enabling joint
    interoperable technologies essential for Objective Force capabilities
    and accelerating their arrival. Our S&T program is pursuing a wide
    spectrum of technologies for unmanned air and ground systems that will
    expand the range of joint warfighting capabilities, reduce risk to
    Soldiers, and reduce the logistics footprint of the force. Realizing
    the full potential of unmanned systems requires technological
    development in sensors that improve navigation and mission performance,
    in intelligent systems for semi-autonomous or autonomous operation, in
    networked communications for manned-unmanned teaming, and in human-
    robotic interfaces, among many others.
        The Defense Advanced Research Projects Agency (DARPA) and Army
    partnership contracted for a Lead Systems Integrator (LSI) to
    accelerate the transition of FCS to the System Development and
    Demonstration (SDD) Phase, with a Milestone B decision in May 2003. The
    Army is on track to achieve first unit equipped in 2008 and an initial
    operating capability of one Objective Force Unit of Action (UA) in
    2010. To accelerate development and in partnership DARPA, the focus on
    key transformation technologies for the FCS has been narrowed to the
    systems with the most promise. Our highest priority S&T efforts remain
    technological advances for the Future Combat System (FCS).
        The Army will field FCS as a family of systems built on information
    age technologies embedded in manned and unmanned air and ground
    platforms. Integral to joint fires, the family of systems will
    integrate long-range air- and ground-based sensors with long-range
    cannon and missile precision munitions. The family of systems will also
    provide increased joint capabilities to conduct battle command,
    reconnaissance, mounted combat operations, dismounted combat
    operations, medical treatment and evacuation, and maintenance and
    recovery. To provide decisive lethality, FCS will employ networked,
    precision and loitering attack munitions fired from modular, easily
    transportable containers. Finally, FCS will leverage embedded, real-
    time interactive, virtual, distributed, collaborative, joint
    simulations for training and mission rehearsal.

    Enabling the Objective Force Soldier
        Eighteen systems, both manned and unmanned; the Objective Force
    Soldier; and C\4\ISR, together, comprise the Future Combat System.
    Manned and unmanned reconnaissance capabilities are part of the FCS
    Family of Systems' interdependent networked air- and ground-based
    maneuver, maneuver support, and sustainment systems.
        There are 10 Unmanned Systems: Unmanned Aerial Vehicles (UAV)
    Classes 1, 2, 3, and 4; Unmanned Ground Vehicles (UGV)--the
    Multifunction Utility/Logistics and Equipment (MULE), the Armed Robotic
    Vehicle (ARV), and the Small (manpackable) Unmanned Ground Vehicle
    (MUGV); Unattended Ground Sensors (UGS); and Unattended Munitions--the
    Non-Line-of-Sight (NLOS) Launch System (LS) and Intelligent Munitions
    Systems (IMS).
        There are eight manned systems: the Infantry Carrier Vehicle (ICV);
    Command and Control Vehicle (C\2\V); Reconnaissance and Surveillance
    Vehicle (RSV); Line-of-Sight, Beyond-Line-of-Sight Mounted Combat
    System (LOS/BLOS MCS); NLOS-Mortar; Medical Vehicle (MV); the FCS
    Recovery and Maintenance Vehicle (FRMV); and the Non-Line-of-Sight
    (NLOS) Cannon.
        Decisive warfighting is about fires and maneuver: fires enable
    maneuver, and maneuver enables fires. Joint and organic close,
    supporting, indirect fires destroy the enemy, suppress the enemy's
    capabilities, protect our forces and enable ground units to maneuver.
    The ICV, the Unattended Munitions NLOS-LS, IMS, C\2\V, MCS, NLOS-
    Mortar, and NLOS Cannon are important elements of the FCS that will
    enable the Objective Force to conduct distributed and simultaneous
    joint combat operations. With joint fires, the NLOS cannon is critical
    to support and protect our land forces in hostile environments. NLOS-LS
    NetFires is a platform-independent family of missiles with precision
    attack and loitering capability. Both Precision Guided Mortar Munitions
    and Excalibur precision cannon munitions will enhance organic maneuver
    fires. A new, joint fire support, battle command and fire support
    architecture will allow rapid engagement of targets by any Army or
    joint asset.
        For over 227 years, Soldiers have remained the centerpiece of our
    formations. The Land Warrior program--another key S&T initiative--
    responds to this legacy and enhances our Soldiers combat power
    generation capability. The Land Warrior program will develop a
    lightweight, low observable, enhanced-armor protection, fighting
    ensemble for the individual Objective Force Soldier. Through networked
    connectivity to the FCS-equipped, maneuver Unit of Action, Land Warrior
    Soldiers will enable revolutionary lethality, mobility, survivability,
    and sustainability for the individual warfighter while reducing
    logistics demands.
        Future Combat Systems are networked in the joint C\4\ISR
    architecture--including networked communications, networked options,
    sensors, battle command systems, training, and both manned and unmanned
    reconnaissance and surveillance capabilities. These networked systems
    will dramatically enhance situational awareness and understanding and
    operational level synchronization well beyond today's standards.
    Improved C\4\ISR capabilities will enable network-centric Objective
    Force operations. The results of the investments will allow leaders to
    capitalize on sensor and processing technology to see, understand, and
    shape the battlespace before the enemy can react--increasing combat
    force effectiveness and survivability. The S&T program will develop and
    demonstrate real-time, continuous situational understanding by
    integrating data from manned and unmanned air- and ground-based
    sensors.
        S&T investments in military logistics are an important enabler for
    the Objective Force. We are placing our emphasis on sustainment's big
    drivers--fuel, ammunition, maintenance, and water--to dramatically
    reduce our logistics footprint and lift requirements in these areas.
    Key technologies include on-board water generation, real-time logistics
    command and control processes and distribution management, enhanced
    multi-purpose munitions and packaging, efficient propulsion and power
    technologies, real-time diagnostics and prognostics, and Micro-Electro
    Mechanical Systems (MEMS).

    Transformational Systems
        Several transformational systems were under development prior to
    announcement of The Army Vision in October 1999. The Army has completed
    an extensive analysis to identify those systems that complement FCS and
    the Objective Force system of systems.
        The Comanche Helicopter is the centerpiece of the Aviation
    Modernization Plan (AMP) and represents the first new system to reach
    Initial Operational Capability (IOC) within The Army's Objective Force.
    Comanche is our armed reconnaissance platform with attack capabilities.
    It will leverage the situational awareness and situational curiosity of
    a scout augmented with revolutionary, state-of-the-art Intelligence,
    Surveillance, and Reconnaissance (ISR) technologies. Comanche supports
    vertical and horizontal maneuver as an integral part of network centric
    operations and extends human eyes and decision-making beyond the ground
    maneuver force. Utilizing stealth technologies, it will network with
    all joint C\4\ISR and joint weapons systems. Comanche will leverage
    maximum effect of future standoff precision weapon systems such as the
    Common Missile and allow us to maneuver ground formations based upon
    full knowledge of the situation. Augmented with armed or unarmed
    Unmanned Aerial Vehicles (UAVs), Comanche will fill ground maneuver's
    most critical battlefield deficiency--armed aerial reconnaissance--with
    a capable, survivable, and sustainable aircraft. The Comanche program
    is already well on its way to giving The Army a capability pivotal to
    transforming the way we will fight.
        Several other transformational systems will empower the Objective
    Force with the knowledge dominance and battle command to provide
    decision superiority across the spectrum of operations. The Warfighter
    Information Network-Tactical (WIN-T) System, Medium Extended Air
    Defense System (MEADS), the Joint Tactical Radio System (JTRS), and The
    Army Airborne Command and Control System (A\2\C\2\S) will enable
    Objective Force joint C\4\ISR capabilities. These programs will provide
    the tactical enterprise level networks that will ensure seamless,
    secure, digital connectivity between the Objective, Interim, and
    today's forces. The Distributed Common Ground System-Army (DCGS-A)
    architecture provides Army network-centric ISR connectivity from
    national agencies to joint systems to Objective Force Units of Action
    as part of the integrated Department of Defense DCGS architecture.
    DCGS-A will enable interoperable tasking, processing, and exploitation
    capabilities. The Aerial Common Sensor brings improved signal
    intelligence collection and precision geolocation capabilities, as well
    as imagery intelligence (IMINT) and measurement and signals (MASINT)
    sensor packages. Another system, Prophet, uses communications
    intelligence to depict the battlespace and further enhance situational
    awareness. These C\4\ISR systems greatly enhance the Objective Force's
    ability to gain actionable information superiority and decision
    dominance over all adversaries and expand the range of options for the
    joint force Combatant Commanders.
        Transformational systems will provide the Objective Force with
    strategic and tactical maneuver capabilities. The Theater Support
    Vessel will support rapid intra-theater lift requirements, provide the
    capability to conduct operational maneuver and repositioning, and
    enable units to conduct enroute mission planning and rehearsal. The
    Future Tactical Truck System will have commonality with FCS and will
    support the Objective Force by enabling command, control, and
    transportation of cargo, equipment, and personnel. And the Tactical
    Electric Power (TEP) generators will provide power to Objective Force
    units where fixed power grids are not available.
        Transformational systems provide the Objective Force with other
    important capabilities, as well. Chemical, Biological, Radiological,
    Nuclear and Explosive (CBRNE) effects systems support the Objective
    Force across the spectrum of military operations and improve
    capabilities to conduct Homeland Security activities. Engineer, civil
    affairs, and psychological operations vehicles will enable mobility and
    enhance civil affairs and PSYOPs capabilities. The Up-Armored High
    Mobility Multi-purpose Wheeled Vehicle (HMMWV) will improve Objective
    Force Soldier survivability and lethality. The Multi-Mission Radar will
    provide the capability to detect and track aircraft, artillery, and
    other projectiles, then queue appropriate weapons systems and airspace
    synchronization systems. The High Mobility Artillery Rocket System
    (HIMARS) is a lighter weight, more deployable multiple rocket launcher
    capability that will integrate into the joint fires network.

    Bridging the Capabilities Gap--Stryker Brigade Combat Teams
        Announcing our intent to field an Interim Force in October 1999,
    The Army responded to a capabilities gap between its lethal,
    survivable, but slow-to-deploy heavy forces and its rapidly deployable
    light forces that lack the protection, lethality, and tactical mobility
    that we seek. Just two-and-a-half years later in 2002, The Army began
    fielding the first Stryker Brigade Combat Team to bridge that gap. In
    2003--less than four years after the announcement--we are on track to
    achieve IOC with the first SBCT at Fort Lewis, Washington. Stryker
    Brigades will provide the Combatant Commander vastly increased
    operational and tactical flexibility to execute fast-paced,
    distributed, non-contiguous operations.
        Stryker Brigade Combat Teams respond to Combatant Commander
    requirements across the spectrum of military operations. Optimized for
    combat in complex and urban terrain, the Stryker Brigades will be
    decisive in other major combat operations, as well. The SBCT
    Reconnaissance, Surveillance, and Target Acquisition (RSTA) Squadron
    provides both organic human intelligence capabilities and UAVs embedded
    at the brigade level. Its military intelligence and signal companies--
    working through a digitally enabled battle command bridge--leverage
    theater and national assets to create an information-enabled force.
    SBCTs will use this enhanced joint C\4\ISR capability to revolutionize
    combat paradigms from ``make contact, develop the situation, maneuver
    the forces'' to ``understand the situation, maneuver the forces, make
    contact at the time and place of your own choosing, and finish
    decisively.''
        Moreover, leveraging platform commonality, enhancing logistics
    practices and enablers, and reorganizing logistics formations, the SBCT
    is vastly more deployable and sustainable than our heavy forces, while
    significantly increasing combat power generating capabilities.
    Augmented for sustained operations, the SBCT requires 37 percent fewer
    CSS personnel than a digitized heavy brigade. While capitalizing on
    these advantages, developing and available technologies allow us to
    mass effects--rather than massing formations--and create a robust,
    reliable capability to conduct operational maneuver over strategic
    distances.
        Finally, SBCTs provide an invaluable means of spearheading
    Transformation. The SBCT trains junior officers and noncommissioned
    officers--tomorrow's commanders and command sergeants major--in the
    tactics, techniques, and procedures that will inform employment of the
    Objective Force.
        The Army has resourced six Stryker Brigade Combat Teams to
    contribute to fulfilling the 1-4-2-1 defense construct and national
    security requirements; however, at this time, the Secretary of Defense
    has only authorized the procurement of the first four brigades. The
    Army will provide the Secretary of Defense with a plan for Stryker
    Brigades 5 and 6.
        Fielding of the SBCTs affects the entire Army: Active and Reserve
    Components; heavy and light forces; CONUS and OCONUS. And current
    fielding timelines will enhance the Nation's ability to fight and win
    the GWOT and conduct major combat operations. The transformation of
    four Active Component brigades to SBCTs provides a rotational base with
    three of the SBCTs focused on the Pacific theater. One of the two SBCTs
    fielded at Fort Lewis will be forward-based in Europe not later than
    2007. The Stryker Cavalry Regiment will support the XVIII Airborne
    Corps' critical need for robust, armed reconnaissance. The conversion
    of a Reserve Component brigade to an SBCT will enhance our strategic
    reserve and support the GWOT, Smaller Scale Contingencies, and Homeland
    Defense missions. Additionally, SBCT stationing provides rapid,
    strategic responsiveness through power projection platforms capable of
    supporting four critical regions described in the 1-4-2-1 defense
    construct. The first SBCT will attain Initial Operational Capability in
    the summer of 2003.

    Preserving The Army's Legacy
        Today's force guarantees The Army's near-term warfighting readiness
    to fight and win our Nation's wars, decisively. Because The Army
    bypassed a procurement generation, The Army's Combat Support and Combat
    Service Support systems now exceed their 20-year expected life cycle,
    and 75 percent of our critical combat systems exceed their expected
    half-life cycle. To maintain operational readiness while preserving
    resources for Transformation, The Army is recapitalizing and
    selectively modernizing a portion of the current force. The
    modernization program addresses the critical issue of AC and RC
    interoperability and serves as a bridge to mesh these two components
    seamlessly. In general, The Army increased funding for programs that
    are clearly transformational and support the Defense transformation
    goals, sustained funding for high priority systems that will transition
    to the Objective Force, and reduced funding for systems not essential
    to Army Transformation. The Army remains committed to its 17-system
    recapitalization program, but we have reduced the prioritized
    recapitalization program from three-and-one-third divisions to two
    divisions.
        Army Special Operations Forces are an indispensable part of The
    Army and will continue to provide unique capabilities to the Joint
    Force and Land Component Commanders. In response to the increasing
    requirement for Special Operations Forces in support of joint campaign
    plans, The Army has validated and resourced growth in its SOF
    structure. The recent initiatives will transfer 1,788 manpower spaces
    to Major Force Program-11 beginning in fiscal year 2003. Since the
    commencement of Army Special Operations Forces operations in support of
    the GWOT, the U.S. Army has provided over $1.4 billion in new equipment
    to enhance Special Operations Forces firepower, communications, and
    ground and air mobility.
        The Army will remain the largest user of space-based capabilities
    among the Services. Army space assets are providing tangible support to
    the war on terrorism and Operation Enduring Freedom--they ensure Army
    and Joint Force Commanders optimize communications, satellite
    intelligence, global positioning system, imagery, weather, missile
    warning, and other space-based capabilities in every aspect of planning
    and operations. We are working diligently with the joint and
    interagency space community to ensure that Army and joint space systems
    continue to provide their essential capabilities now and for the
    Objective Force.

    Aviation Transformation and Restructuring
        Aviation Transformation further demonstrates The Army's hard
    choices in balancing risk to resource Transformation. Our interim
    plan--now in progress--lowers operating and sustainment costs while
    posturing aviation for arrival of the Objective Force by 2010. Apache
    modernization is an integral part of the Army Aviation Transformation
    Plan. The AH-64D Longbow heavy attack team will enhance domination of
    the maneuver battlespace and provide the ground commander with a
    versatile, long-range weapon system against a range of fixed and moving
    targets. The UH-60 Blackhawk continues to be the assault workhorse of
    Army Aviation, executing over 40 percent of The Army's annual flying
    hours. We are extending the life of the UH-60 while providing it with
    capabilities required of the future battlespace. Similarly, The Army is
    fully committed to the CH-47F Chinook program. Its heavy-lift
    capability is invaluable to transforming The Army. As we restructure
    and standardize attack and lift formations across the force, we will
    also adjust the stationing and alignment of Reserve Component aviation
    units to mitigate the near-term risk.
        Army National Guard Aviation comprises almost 50 percent of The
    Army's aviation force and is one of the Nation's most valuable assets
    both for wartime and for peacetime missions. Essential for successful
    execution of the Nation's military strategy, the ARNG currently has
    aviation units deployed in Afghanistan, Kuwait, Bosnia, Europe, and
    Saudi Arabia, as well as Central and South America.

    Army National Guard Restructuring Initiative (ARNGRI)
        ARNGRI seeks to transform a sizeable portion of ARNG combat
    structure into more deployable, flexible fighting forces to support
    Army requirements at home and abroad. ARNGRI will introduce two new
    organizations into the force structure: Mobile Light Brigades and
    Multi-Functional Divisions. These organizations will provide full
    spectrum capabilities in support of Combatant Commanders. The Mobile
    Light Brigades will operate as a subordinate unit to the Multi-
    Functional Divisions, which will also contain two combat support/combat
    service support brigades and be capable of supporting either major
    combat or homeland security operations.

    Army Reserve Transformation Initiatives
        By providing responsive force generating capability and technically
    trained individuals, the USAR facilitates our capability to conduct
    extended campaigns in multiple theaters and to sustain joint
    operations. Army Reserve initiatives ensure the USAR is missioned,
    organized, and equipped to provide interoperability across the full
    spectrum of military operations. Transformational organizations include
    experimentation forces and information operations, joint augmentation,
    network security, and interagency units.
        The Readiness Command Restructuring initiative and Federal Reserve
    Restructuring Initiative will help the USAR fulfill these new mission
    requirements. These initiatives lend greater flexibility to efforts
    that enhance responsiveness to America's foreign and domestic
    protection needs. Regional Readiness Commands will focus on individual
    and unit readiness, leader development, training and growth which will
    demand a new personnel system that achieves holistic life-cycle
    management for Army Reserve Soldiers.

                               INSTITUTIONAL ARMY

    Transforming the Way we do Business
        We have made great strides in revolutionizing our business
    management practices by starting at the very top. Last year, we
    realigned our headquarters by reorganizing and realigning
    responsibilities of the Secretariat and the Army Staff--streamlining
    coordination, tasking, and decision-making--resulting in a more
    responsive and efficient organization. This initiative allowed us to
    eliminate unnecessary functions and redistribute 585 manpower spaces to
    accomplish core competencies.
        As previously discussed, The Army has addressed the management of
    its installations, personnel systems, and contracting in its
    Transformation of Installation Management (TIM). We are aggressively
    pursuing efforts to outsource non-core functions. The Army will reap
    substantial dividends in efficiency and effectiveness through these
    strategic realignments of human and physical capital.

    Personnel Transformation
        The Secretary of the Army's key management initiative is personnel
    transformation. Its goal is to modernize and integrate human resource
    programs, policies, processes, and systems into a multi-component force
    that includes civilians and contractors. We will evaluate our processes
    and implement the most efficient program, policies, and organizations
    to support the Objective Force.
        The centerpiece of Personnel Transformation is a comprehensive
    effort focused on a potential Army-wide implementation of unit manning
    and unit rotation. We are aggressively examining the feasibility of a
    unit manning and rotation system that would better support the new
    national defense strategy, improve cohesion and combat readiness within
    the operational Army, provide highly cohesive well-trained units to
    Combatant Commanders, and improve well-being for families by providing
    greater stability and predictability in assignments. The Army currently
    uses unit rotations in support of operational missions in the Balkans,
    Sinai, and Afghanistan. The Army is studying the use of unit rotations
    for other locations and in the war on terrorism. Units would know of
    these rotations well in advance, providing families with greater
    predictability and enabling focused preparation, both of which
    contribute to increased combat readiness of the unit.
        Unit manning seeks to synchronize the life cycle of a unit with the
    life cycle of the Soldier within that unit. All Soldiers and leaders
    would be stabilized, resulting in a significant increase in cohesion
    and combat readiness over our present individual replacement system.
    Such a system has significant second and third order effects across the
    force--training and leader development, recruiting and retention, unit
    readiness levels, and total Army endstrength, among others. All of
    these are being studied intensively, and we anticipate senior Army
    leadership decisions on unit manning and unit rotation in July 2003.

    Third Wave
        Because we operate in an environment in which there are increasing
    demands for military capabilities--the Secretary of the Army's Third
    Wave initiative seeks to ensure that we are achieving the best value
    possible for our taxpayers' dollars.
        There are three phases to the Third Wave process. First, we
    determined what activities were core or non-core to The Army's mission.
    In the second phase, we are validating the breakout between core and
    non-core functions by determining if any non-core functions should be
    exempted. This phase has an anticipated completion date of mid- to late
    February 2003. Upon completion, The Army leadership will notify
    Congress of the results of this phase. In the third phase, key Army
    leaders will assess appropriate plans to execute non-core functions,
    select the best means to proceed, and develop implementation plans. At
    this time, we do not know how many of the 214,000 jobs identified as
    potentially non-core functions in Phase I will be included in
    implementation plans. Although implementation plans will target
    execution in fiscal years 2005-2009, some implementation plans may be
    delayed beyond that period.
        The implementation of competitive sourcing of non-core functions
    will adhere to OMB Circular A-76 and related statutory provisions.
    Exceptions to the requirement for public-private competition are
    limited, such as where 10 or fewer civilian employees perform the
    function or where legal restrictions against using the A-76 process
    apply to the function. To lower costs for taxpayers and improve program
    performance to citizens, OMB has undertaken major revisions to the
    processes and practices in OMB Circular A-76 to improve the public-
    private competition process.

    Acquisition Transformation
        The Army is leading the way in acquisition reform within DOD's
    broad transformation of defense acquisition policies and procedures.
    The Army's FCS program may prove to be the largest DOD acquisition
    effort that fully embraces the concepts of evolutionary acquisition and
    spiral development--leveraging the potential of rapid advancement
    within individual technologies by allowing for changes within programs
    as technologies mature.
        The FCS program is evolutionary in its design and incorporates
    periodic blocked improvements within its 19 systems--the Objective
    Force Soldier and 18 manned and unmanned systems. Within these 19
    systems are 540 spirally developing technologies. The Army's use of a
    Lead System Integrator (LSI) enables a ``best of the best'' approach to
    selection from competing industry efforts. Our unprecedented
    partnership with DARPA ensures the FCS effort leverages that agency's
    DOD-wide perspective and resources to produce the best capability and
    value for the Joint Force.
        The Army continues to revise its acquisition policies and
    applicable regulatory guidance. On October 3, 2001, The Army approved
    an acquisition reorganization that transferred control of all
    acquisition program management to the Army Acquisition Executive (AAE)
    and eliminated duplication of effort in two major Army commands.
    Effective October 2002, twelve Program Executive Officers (PEO) report
    to the Army Acquisition Executive, and their subordinate PEOs assumed
    management of all Army acquisition programs, regardless of Acquisition
    Category. The plan ensures that there is only one chain of authority
    for acquisition programs within The Army. In addition, the plan clearly
    holds Program Managers responsible and accountable for the life cycle
    management of their assigned programs.
        We have also transformed the way we conduct business through the
    organization of the Army Contracting Agency (ACA) that realigns our
    previously decentralized installation and information technology
    contracting processes into one organization. Responsible for all
    contracts over $500,000 and tasked to eliminate redundant contracts,
    ACA leverages Army-wide requirements to achieve economies of scale. ACA
    supports Army Transformation efforts by aligning all base support
    contracting into a single organization that best supports installation
    management transformation. All of these initiatives use information
    technology to leverage enterprise-wide buying capabilities.
    Additionally, ACA will act as the single coordinating element and form
    the base from which to deploy contingency-contracting, operational
    support to the warfighting commands. The Army Contracting Agency and
    other contracting activities will continue to support small business
    awards in the outstanding manner it did in fiscal year 2002.

    Logistics Transformation
        We cannot transform The Army without a transformation in logistics.
    We must incorporate the logistician's view into the design of our
    systems even before we begin to build platforms. Collaboration between
    the acquisition and logistics communities will give the Objective Force
    the rapid deployability and sustainability we demand--by design--
    without compromising warfighting capability.
        Designing the right logistics architecture--systems, business
    processes, enterprise, for example--is fundamental to success. The
    Army's Logistics Transformation will focus on creating an overarching
    corporate logistics enterprise that employs industries' best business
    practices. Within this enterprise, The Army established three principal
    goals for Logistics Transformation: enhance strategic mobility and
    deployability; optimize the logistics footprint; and reduce the cost of
    logistics support without reducing readiness or warfighting capability.
        The Army's mobility and deployability goals for the Objective Force
    are to deploy a combat brigade within 96 hours after lift off, a
    division on the ground in 120 hours, and a five-division corps in
    theater in 30 days. To achieve this strategic responsiveness, the Army
    Strategic Mobility Program (ASMP) serves as a catalyst to bring about
    force projection changes both in The Army's and in our Sister Services'
    lift programs. Platforms like the Intra-Theater Support Vessel (TSV)
    and Inter-Theater Shallow Draft High Speed Sealift (SDHSS) provide
    transformational capabilities for operational and strategic maneuver
    and sustainment of Army formations.
        Because strategic air and sealift cannot meet deployment
    requirements, Army Prepositioned Stocks (APS) ashore and afloat
    continue to be a critical component of Army power projection. The Army
    is currently participating in a joint-led Worldwide Prepositioning
    Study to determine if location, mix, and capabilities in existing
    stocks of combat, combat support, and combat service support require
    adjustments to meet the Defense Strategy more effectively.
        The Objective Force requires The Army to optimize its logistics
    footprint to produce a smaller, more agile, responsive, and flexible
    sustainment organization. To achieve this goal, we will leverage
    technology and innovative sustainment concepts. The Army is already
    developing and integrating key enablers to provide a transformed,
    corporate logistics enterprise. Some of these enablers include embedded
    diagnostics and prognostics, tactical logistics data digitization
    (TLDD), serial number tracking, and the Global Combat Service Support--
    Army (GCSS-A) system that utilizes a commercial Enterprise Resource
    Planning (ERP) solution. The ERP approach changes The Army's logistics
    automation systems strategy from one of custom code development for
    unique Army requirements to adoption of a commercial off-the-shelf
    (COTS) product.
        The selective use of the Logistics Civil Augmentation Program
    (LOGCAP) to augment military logistics force structure provides
    commanders with the flexibility to reallocate manpower, resources, and
    materiel by adding contractors to the equation of logistics support. In
    addition to providing services and some supply support, these
    contractors can quickly deploy to establish base camps, receive and
    process Soldiers as they begin arriving in theater, and reverse the
    process when Soldiers go home.
        Current initiatives that help reduce costs without reducing
    readiness or warfighting capability include the National Maintenance
    Program and the Single Stock Fund (SSF). As previously discussed,
    programs provide two basic building blocks for a revolutionary change
    in logistics business practices.

    Advanced Medical Technology
        Congress designated The Army as the lead agent for DOD vaccine,
    drug, and development programs for medical countermeasures to
    battlefield threats. This includes vaccines against naturally occurring
    infectious diseases of military significance, combat casualty care,
    military operational medicine, and telemedicine research. The program
    also funds Food and Drug Administration requirements for technology
    transition to advanced development.
        The medical force provides the requisite medical intervention and
    care for the Joint Force deployed around the globe. With its Medical
    Reengineering Initiative (MRI), The Army Medical Department has
    transformed 28 percent of its Corps, and echelon above Corps, force
    structure to an organizational structure that promotes scalability
    through easily tailored, capabilities-based packages. These packages
    result in improved tactical mobility, reduced footprint, and increased
    modularity for flexible task organization. MRI supports both the
    current forces and the Stryker Brigades, and is the bridge to the
    Objective Medical Force. We have implemented innovative strategies make
    the most efficient use of our budget. Medical modernization, which
    includes the acquisition of current medical equipment and technology,
    is partially funded within MRI units.

    Business Initiatives Council
        In June 2001, the Secretary of Defense established the Department
    of Defense Business Initiatives Council (DOD BIC). The DOD BIC's goal
    is to improve business operations and processes by identifying and
    implementing initiatives that expand capabilities, improve efficiency
    and effectiveness, and create resource savings in time, money, or
    manpower.
        The Army has aggressively explored ways to improve its internal
    business practices, and has established The Army BIC, under the
    leadership of the Secretary and the G-8. Effective November 13, 2002,
    the Secretary of the Army has approved a total of 35 initiatives under
    The Army BIC. Subsequently, The Army submitted a number of the
    initiatives through the formal DOD BIC process for implementation
    across the Services and other DOD activities. The BIC process has
    helped to create a culture of innovation and inter-service cooperation.
    The superb level of cooperation across the military departments, the
    Joint Staff and OSD has made this possible.

                           A COMMITMENT TO THE FUTURE

        With the continued strong support of the Administration, the
    Congress, our Soldiers, and our Department of the Army civilians, and
    the greatest industrial base and science and technology communities in
    the world, The Army will field the Objective Force--this decade.
        By 2010, we will have fielded the first operationally capable
    Objective Force unit equipped with the Future Combat Systems. Our
    Stryker Brigade Combat Teams will be providing to Combatant Commanders
    capabilities not currently available--enhanced strategic responsiveness
    and the ability to operate in a distributed, non-linear battlespace.
    Through selective recapitalization and modernization of systems that
    enable our Soldiers to preserve our legacy today, we will have
    sustained a decisive-win capability at a high state of readiness as an
    integral part of the Joint Force. And we will have significantly
    improved the well-being of our people and sustainment of Army
    infrastructure.
        We remain committed to our legacy--preserving America's freedoms.
    In peace and in war, The Army's Soldiers serve the Nation with
    unmatched courage, indomitable will, pride, and plain grit--as they
    have for over 227 years. Soldiers will continue to fight and win the
    Nation's wars, decisively--it is our sacred duty and our non-negotiable
    contract with the American people.
        [Clerk's Note.--The United States Army Posture Statement, 2003, can
    be found on the world wide web at: www.army.mil.]

        Senator Stevens. General, do you have any statements to
    make?

                     STATEMENT OF GENERAL ERIC K. SHINSEKI

        General Shinseki. Just a short opening statement if you do
    not mind, Mr. Chairman.
        Mr. Chairman, Senator Inouye, distinguished members of the
    committee, it is an honor to be back here before the committee
    and, along with Secretary White, to report to you on the
    posture and the readiness of the Army and in many ways what we
    will report on this morning is what we have been about for the
    last 3\1/2\ years. It is your support, and the generosity of
    your time and attention and the generosity of your support that
    has put us in the situation we are in today.
        It is also a great privilege for me to sit here with
    Secretary Tom White. In a very short period of time Secretary
    White has provided us tremendous focus, leadership, and
    guidance and gotten momentum in achieving what we described
    3\1/2\ years ago as the Army Vision, and he and I have served
    side-by-side in other lives, so it is great to be sitting here
    together in final testimony with him.
        As the Secretary has indicated and as the chairman has
    noted, soldiers are serving magnificently today as members of
    the joint team and, you know, just the Army alone, as remarked
    by the chairman, 262,000 of our soldiers are forward-stationed,
    forward-deployed in operations today, 151,000 of our Reserve
    Component mobilized in support of operations. They are fighting
    this war against terrorism. They are honing and fine-tuning
    their combat skills as they await orders for potentially
    another major operation, and they are poised to respond to
    still other contingencies in regions of the world that our
    country has declared important.
        The Army is ready. That is the purpose of the Secretary's
    and my appearance here today. We are the best Army in the world
    because of our soldiers, not the biggest, but the best. Their
    determination and their commitment are as firm as I have seen
    in all my years of service. They are immensely proud to serve
    this Nation. They will take any objective, and they will
    accomplish any mission we assign them.
        We would like to project the same kind of confidence in
    their competence, and the same statement of readiness not just
    today, but into the future, and to do so, we declared 3\1/2\
    years ago that we would field a more responsive, a more
    deployable, a more agile and versatile, certainly more lethal
    force than we have today in survivable formation, but a lot
    more sustainable than even the Army that we have today.
        We knew then that there was a war in our future, and we
    said so. We just did not know when, where, or against whom.
    Though we did not anticipate exactly this scenario, where we
    are fighting a global war on terrorism in Afghanistan, standing
    by for another major operation, and looking with a little bit
    of concern at Northeast Asia, the relative predictability of
    the Cold War had already, even 3\1/2\ years ago, given way to a
    continuing chaos of unpredictability, and voices inside and
    outside the Army and voices in this committee encouraged us to
    be bold, to take some steps and begin the process of change,
    and with your support we have come a long way towards
    transforming our formations to be more capable of handling
    future crises.
        As the Secretary has indicated, there is always inherent
    risk any time any institution undertakes not just change, but
    fundamental and comprehensive change, as the Army declared it
    would 3\1/2\ years ago. To mitigate that risk, the Army
    structured its transformation on three broad, mutually
    supporting axes, and I will describe then as near-term, mid-
    term, and long-term responsibilities.
        In the near term, we preserved the readiness of today's
    legacy fighting force. In the mid-term, we are fielding six
    Stryker Brigade Combat Teams (SBCT) to give us much-needed
    operational capabilities, even as we design our future
    Objective Force, and it is on that third and final long-term
    axes that we are developing future concepts and technologies
    that will provide consistent capability overmatched throughout
    the middle of the next century, and that is the intent of the
    Army.
        Our Future Combat System Milestone B Defense Acquisition
    Board decision, the first acquisition milestone for the Future
    Combat System that is scheduled for May of 2003, just a few
    months from now, puts us on a path to begin fielding our future
    Objective Force by fiscal year 2008. That is a significant and
    an important milestone.
        As Secretary White notes, balancing these requirements
    between all three priorities, near-term, mid-term, and long-
    term requires some difficult choices, and the Army has had to
    make them, carefully weighing the operational demands of
    today's missions while preparing for the future. Your support
    remains vital to our continued success in managing that risk,
    and the Army's fiscal year 2004 budget strikes that essential
    balance to maintain readiness throughout the Program Objective
    Memorandum (POM) and the years beyond.
        We are already seeing dividends from our investments in
    future readiness, technologies that are coming online early
    because we invested aggressively early. Superior body armor
    today, robots in caves and antitank warheads on unmanned aerial
    vehicles today, unprecedented Blue Force tracking capabilities
    today, and last summer, during the largest joint exercise in
    our history, Millennium Challenge 2002, with the help of the
    Air Force we air-delivered a Stryker platoon onto a dirt strip
    out in the National Training Center in California. Just 3 years
    after the Army described that requirement for an interim force,
    we demonstrated the increased strategic, operational, and
    tactical versatility that Stryker Brigade Combat Teams will
    provide to combatant commanders.
        This summer, the first SBCT, the first Stryker unit will
    join us in the war on terrorism, so it is not just about
    capabilities that we intend to begin fielding in fiscal year
    2008. It is about better capabilities that we are fielding even
    today for our soldiers.
        People remain the centerpiece of our formations. The
    Secretary has said it in his proud statement about our
    soldiers, and I echo it here. They are the centerpiece of our
    formations, and their well-being is inextricably linked to Army
    readiness. Your help with pay raises, health care, retirement
    benefits, housing, and other well-being programs allow us to
    take better care of our people. Soldiers, our civilians, our
    retirees, and our veterans and their families all appreciate
    the support more than I can say, that they have received out of
    the Congress.
        Mr. Chairman, for almost 4 years now I have had the
    privilege of working with members of this committee. You have
    supported the Army and helped us do what was best for the
    national security. I am grateful for your steady and bipartisan
    leadership, and most importantly for your unwavering devotion
    to our soldiers. You have kept us the most respected land force
    in the world today, and that will continue into the future.
        Mr. Chairman, thank you for this opportunity to make those
    remarks, and I look forward to your questions.
        Senator Stevens. Thank you very much, General. I am going
    to defer my questions until later to allow other Members to ask
    questions, but I do have one statement to start off with.

                        FIFTH AND SIXTH STRYKER BRIGADES

        I joined, or rather my good friend and cochairman here
    joined me in sending a letter to Secretary Wolfowitz about the
    way the Department plans to handle the fifth and sixth Stryker
    Brigades. The fiscal year 2003 Defense Appropriations Act
    directed the Army and the Department of Defense to fund six
    Stryker Brigades, and we felt that was the direction. The
    President signed that bill, and now I understand that there is
    some indication that the Office of the Secretary of Defense
    would terminate, or change the deployment of the fifth and
    sixth Stryker Brigades. Can you tell us, Mr. Secretary, what is
    the situation with regard to those two brigades?
        Mr. White. Mr. Chairman, the Secretary has directed us to
    conduct a study of brigades five and six that is aimed at
    determining whether the structure as it is currently proposed
    for those brigades is optimal, whether there are other things
    that we could add, other capabilities that would be appropriate
    to add like, say, aviation.
        In addition to that, he has asked us to study the
    stationing of brigades five and six, which as you pointed out
    are currently in Hawaii, and then the Pennsylvania Army
    National Guard. We will complete the study in the near future.
    In the meantime, the money for brigades five and six has stayed
    in the program. It is where we programmed it, and it is where
    the Secretary has agreed to leave it, and we will get the study
    done as quickly as we can.
        Senator Stevens. Well, I hope our letter is responded to
    sometime soon, and it is my judgment that if the Army wants
    more Stryker Brigades, they should request more funds. We
    funded those on the basis that they would be deployed to Hawaii
    and the Pennsylvania National Guard, and unless that law is
    changed, we expect that direction to be complied with.
        Senator Inouye.
        Senator Inouye. Thank you very much, Mr. Chairman. I am
    glad you brought up the question of the Stryker Brigade.

                            GLOBAL WAR ON TERRORISM

        I would like to ask a general question on the budget. If my
    calculation is correct, the Army is spending approximately $700
    million per month to fight the global war on terrorism, is that
    correct?
        Mr. White. Yes, sir, it is.
        Senator Inouye. Now, where does this money come from,
    because there is no item for fighting global terrorism.
        Mr. White. Right now, Senator, we are cash-flowing, as we
    call it, principally in the military personnel accounts for the
    additional mobilization and in the operations and maintenance
    account's third and fourth quarter money to pay these
    additional costs above the budget in the early part of the
    fiscal year.
        Senator Inouye. So we are using monies that were intended
    for some other purpose?
        Mr. White. That is correct.
        Senator Inouye. In addition, there is not anything in the
    budget that I can see that faces reality, which all of us have
    assumed that sometime in this fiscal year we would be in Iraq.
    How are we going to cope with that?

                           SUPPLEMENTAL APPROPRIATION

        Mr. White. Senator, I believe it is the intent of the
    Department or the President to request a supplemental to cover
    the funds for the war on terrorism.
        Senator Inouye. The next question is, when will the
    supplemental reach us?
        Mr. White. Sir, to use an expression by the Secretary of
    Defense, it is above my pay grade. We have had our discussions
    with the Office of Secretary of Defense. I know they have had
    deliberations with the Office of Management and Budget, but as
    we discussed yesterday, the supplemental has not yet been
    submitted.
        Senator Inouye. I can assure you, sir, that we are looking
    forward to receiving that, because in a situation of this
    nature, it would be an understatement to say that to keep the
    troops ready is an urgency.
        Mr. White. Yes, sir.
        Senator Inouye. And with the funds as they come in, in
    driblets, it will not help the situation.
        Senator Stevens. Would the Senator yield?
        Senator Inouye. Yes. I would be very happy to.
        Senator Stevens. I might state to the Senator and the
    committee that I had a discussion last night with Mitch
    Daniels, an informal conversation, and I am informed we should
    get that supplemental early next week, and it will contain not
    only monies for defense, but homeland defense, and some moneys
    to start planning for the post-conflict era in Iraq.
        Senator Inouye. Well, I thank you very much. His pay level
    is higher than mine.
        Senator Stevens. Not so.

                                  END STRENGTH

        Senator Inouye. General Shinseki, you have been quoted many
    times saying that the Army does not have the required end
    strength to meet current and future military obligations. Can
    you elaborate on this?
        General Shinseki. Yes, sir. I have testified, Senator, for
    3\1/2\ years now that the mission profile that the Army was
    carrying even 3 years ago was larger than the inventory of
    formations we had, and I suggested that end strength was a
    concern. 3\1/2\ years ago we were not recruiting as well as we
    wanted, and so we had to go fix that first. The last 3 years we
    have made our recruiting targets. Our retention has always been
    very good.
        The missions in the last 3 years have gone up. End strength
    continues to be a concern, and it is revealed, I think, in the
    amount of routine mobilization of the Reserve Component that we
    see day to day. Many of those missions used to be carried by
    Active Component formations, so these are some of the
    manifestations of what my concerns were.
        Secretary White has asked us--even as we made our concerns
    public--has asked that the Army take a look at itself, and this
    is what is sort of caught up in the Third Wave discussions, to
    make sure that even as we talked about end strength, that the
    Army had done the right things about ensuring that soldiers
    were in soldiers' positions, and so we are doing that, and the
    results of that study are forthcoming.
        I will review them and provide my advice to the Secretary,
    but I think all things considered, when this operation, this
    crisis is over, we need to take a good hard look at right-
    sizing the Army, right-mixing the Army between Active and
    Reserve Component, and even as some of the combatant commanders
    are already beginning to describe, right-stationing the Army,
    and I think all of this is important to take up now.

                                   RECRUITING

        Senator Inouye. That leads me to the next question. How are
    we doing in recruiting?
        General Shinseki. Our recruiting for the last 3 years has
    just continued to get better. In the Active Component, last
    year I could have told you very early in the recruiting year
    that we would make our recruiting targets. We were doing that
    well.
        I can do the same thing again this year in active
    recruiting, but for the first time here this month, in the
    Reserve Component recruiting, both the National Guard and the
    Army Reserve missed their monthly targets. That happens from
    time to time. We look at a year-long objective that we go
    after, but our attention was caught by the fact here last month
    that both Reserve Components missed by a margin their monthly
    targets.
        Some of that is driven by the fact that our Active
    Component soldiers who normally leave the Active Component and
    are available to transition into Reserve Component formations,
    right now, because of the standby for potential operations in
    Southwest Asia, we have stop-loss personnel decisions in place,
    so the flow of Active Component soldiers out of active units
    available for Reserve Component units, that has very much
    diminished, and that is part of what is at work here, but
    recruiting for the last 3 years, Senator, has been very, very
    strong, retention even better.

                               SOLDIER DEPLOYMENT

        Senator Inouye. To give the citizens who may read the
    transcript a better idea of personnel problems, how many
    troops, men and women, Reserve and Active, are now overseas in
    places like Bosnia, Afghanistan, Korea, et cetera, and Kuwait?
        General Shinseki. Well, overseas, both forward stationed
    and forward-deployed, the number is 262,000 today. That number
    changes day to day as we begin to look at potential operations
    in Southwest Asia.
        Senator Inouye. That leaves how many here?
        General Shinseki. Well, that 262,000 is a combination of
    Active and Reserve Component. The Active Component formations,
    I can give you a more finite number, but the Active Component
    formations are not totally deployed, but much of the Active
    Component is on standby, prepared for deployment, so if those
    orders are executed, a good portion of the active force will be
    overseas.
        Senator Inouye. I have always maintained what some would
    consider a rather naive concept, that the best way to avoid war
    would be to be prepared for war. In order to be prepared for
    war, we need proper personnel and proper equipment. It is no
    secret that the Navy has 12 carrier battle groups. One carrier
    is always for training purposes. One carrier is always in
    transit. That leaves 10. Six are now in the gulf area, in the
    Mediterranean, the Red Sea, or the Persian Gulf itself, and one
    more is in transit. That is nine, and I believe one more
    carrier group is going to go to that area. That leaves two for
    the rest of the world.
        I recall it was not too long ago when we were sitting here
    and we were told that we were ready for two-and-a-half wars. Is
    that concept still being discussed?
        General Shinseki. Senator, I think the two-and-a-half major
    combat operation discussion, it has now been translated into a
    strategy that talks about homeland defense, four critical areas
    of the world that we have to continue to focus on, two
    potential major combat operations, one of which can be a major
    operation that requires decisive force. That is the sizing
    construct around which we organize our discussions, and like
    the Navy, we have a good portion of our Active Component force
    focused on this major operation.
        Senator Inouye. I will wait for my second round, but before
    I do, I would like to thank you, sir, for the service you have
    rendered to this country throughout your youth and at the
    present time. It has been a magnificent service record, and
    personally I hate to see you go, but such is the nature of this
    business.
        General Shinseki. Sir, it is.
        Senator Inouye. And I am always grateful to you and to the
    Secretary for having prepared our men and women so that they
    can carry out the missions they are ordered to carry out.
        General Shinseki. Thank you very much, sir.
        Senator Stevens. Senator Shelby.
        Senator Shelby. Thank you.
        General Shinseki, your statement a few minutes ago was
    rather profound and reassuring. You said, the Army is ready,
    and I believe you. I believe the Army is ready.

                       SPACE AND MISSILE DEFENSE COMMAND

        Having said that, I want to focus just for a minute on the
    Space and Missile Defense Command (SMDC) and the missions there
    of space, missile defense, computer network operations for the
    Army, additionally SMDC is the Army component to STRATCOM with
    emerging missions including space, global strike, global
    C4ISR, global integrated missile defense, global
    information operations.
        You mentioned the important work the Army is doing to
    develop directed energy programs in your testimony. Would you
    discuss the success of the tactical high-energy laser program,
    the challenges that remain in developing and fielding a mobile
    tactical high energy laser (MTHEL) program system and the
    funding the Army plans to commit to MTHEL in fiscal year 2004?
    Do you want to tackle--which one of you?
        Mr. White. Let me start out, and then the Chief can add----
        Senator Shelby. That is a mouthful, I know.
        Mr. White. Oh, I think it is a tremendously successful
    program.
        Senator Shelby. It is.
        Mr. White. We have had successful engagements of both
    rockets----
        Senator Shelby. That is right.
        Mr. White [continuing]. And now artillery shells----
        Senator Shelby. That is right.
        Mr. White [continuing]. Which is extraordinary. This is a
    joint program with Israel, as you know, progressing forward,
    and we have provided over $500 million of funding in our 2004-
    2009 POM to support this, so we will continue to push the
    development of it. All of us think it has tremendous potential.
        Senator Stevens. Will the Senator yield for just a second?
        Senator Shelby. I will be glad to yield, Mr. Chairman.
        Senator Stevens. Senator Domenici has to go to the floor.
    He has been called to the floor. Would you mind yielding just a
    moment to him?
        Senator Shelby. I will yield to the Senator, absolutely.
        Senator Domenici. I gave my questions to the chairman to
    ask, Senator Shelby, so he will do that, he will ask my
    questions. Before I left I wanted to join, Chief, in telling
    you that it has been a great pleasure to get to know you and to
    know of your record, and obviously to know of your record is to
    know you. That is the way it seems to me, and I congratulate
    you for what you have done for our country. It is a marvelous
    record. It is too bad that all great things come to an end, but
    that is the way it is.
        I also want to thank you, because of the special help you
    have given me at Walter Reed Army Medical Center. It has been
    rather wonderful care for some of the problems I have had. I
    personally want to thank you for asking about those illnesses
    as I had them, and thank you for your assistance.
        General Shinseki. You are quite welcome, sir.
        Senator Domenici. And good luck.
        General Shinseki. Thank you, sir.
        Senator Stevens. Senator Shelby, thank you very much.
        Senator Shelby. Thank you.
        Both of you, I believe, are aware that I have expressed
    concern about the Army's support for the Space and Missile
    Defense Command. I am pleased that the response, Mr.
    Secretary--from you and the General--I have received from the
    Army, has been so strongly supportive.
        Despite SMDC's current space, missile defense, and computer
    network operations missions, and its emerging missions as the
    Army component of STRATCOM in the area of global strike, global
    integrated missile defense, and global information operations,
    some of us are concerned that the Army has not made sufficient
    investments in technology development.
        We realize, Mr. Secretary, you tried a lot to support some
    of these missions in recent years. I have heard some say that
    the Army has lost its focus, but I told them I am not sure
    about that, because I am aware of what you are doing, and we do
    need more institutional support and funding for the core
    technology program. How would you respond to this, the budget
    request in this area?
        Mr. White. Well, I think it reflects the fact that our
    component command, SMDC, is tremendously important not only to
    the Army, but to the country. The work with the Ballistic
    Missile Defense Agency, where we do a whole bunch of different
    tasks, the mid-course capability that is being established at
    Fort Greely, Kwajalein, all the rest of it that you are very
    familiar with, the component of the Strategic Command, we have
    fundamental interest in space operations as an Army. They are
    tremendously important to us.
        So I think that the contribution that SMDC makes across, as
    you pointed out, a significant range of important aspects to us
    is very, very important, and so I am an avid supporter of the
    Space and Missile Defense Command.
        General Shinseki. May I just add, Senator, that both the
    Secretary and I take a very keen interest in Space and Missile
    Defense Command's contributions here, but you know, the Army
    has a longstanding history in missile work, I mean, one that
    goes beyond most recollections.
        What we have suggested to General Cosumano and the rest of
    the Army that deals in the doctrine and conceptual thinking is
    that if we talk about missile defense as a series of catchers'
    mitts trying to deal with someone else's initiative, it is
    essentially a defensive-oriented strategy, and we needed to
    think more holistically, more broadly about this, as we do with
    all of our other war-fighting concepts, that you have to have
    an offensive as well as a defensive piece.
        This is important, but we needed to think about all the
    capabilities that allow us to deal with threats on someone
    else's soil that can project capabilities against the homeland,
    and when you do that, of course, you get into the mid-course
    business and the boost phase, but you also talk about
    capabilities to forcibly enter someone else's territory and, in
    fact, take down those capabilities, as opposed to continuously
    react to someone else's actions, so we have included Space and
    Missile Defense Command into this larger discussion of
    capabilities.
        Senator Shelby. Thank you.
        Thank you, Mr. Chairman. I will wait another round.
        Senator Stevens. Thank you. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman, and I will join
    with my colleagues, General, in wishing you the very best in
    your next career. You can certainly look with pride on this
    career.

                           AGING HELICOPTER INVENTORY

        Yesterday's Wall Street Journal had an article on the
    military's aging helicopter inventory, and Mr. Chairman, if I
    could submit that Wall Street Journal article for the record.
    Mr. Chairman.
        Senator Stevens. Pardon me?
        Senator Leahy. If I could submit that Wall Street Article
    for the record, please?
        Senator Stevens. Yes.
        [The information follows:]

                 [From the Wall Street Journal, Mar. 18, 2003]

                        Fresh Troops . . . Old Choppers

     U.S. MILITARY LABORS TO KEEP AGING HELICOPTERS AIRWORTHY; HAZARDS OF
                                DESERT LANDINGS

          (By Anne Marie Squeo, J. Lynn Lunsford and Nicholas Kulish)

        ON A RECENT episode of the television show ``The West Wing,'' the
    Pentagon's top military commander ordered two Comanche reconnaissance
    helicopters dispatched to rescue three Marines taken hostage.
        When he heard about the fictional deployment, Maj. Gen. John
    Caldwell, head of the Army's acquisition programs, burst out laughing.
    ``Those would be the only two we have,'' he said.
        For more than a decade, ambitious plans to replace the U.S.
    military's aging helicopter fleet have been sidelined by funding
    constraints and developmental problems. The imposing-looking Comanche,
    which is supposed to have the ability to fly sideways and backward at
    more than 85 miles an hour, is the fruit of a $48 billion program that
    began in 1983 but isn't expected to become part of the U.S. arsenal
    until 2009 at the earliest. And the V-22 Osprey, a hybrid aircraft that
    takes off and lands like a helicopter but cruises like an airplane at
    more than twice the speed of a conventional helicopter, has been
    grounded for much of the past two years after a string of fatal
    crashes. The V-22 was recently grounded again because of hydraulic-
    system problems, and top Pentagon officials say they are prepared to
    finally end the $46 billion program if it doesn't get on track soon.
        So as they assemble for a potential conflict with Iraq, U.S. forces
    are relying on helicopters that in some cases are older than the troops
    they will carry. For example, massive twin-rotored CH-47 Chinook
    helicopters, which can carry dozens of servicemen or hoist heavy loads
    beneath them, remain the workhorse heavy-lifter for the Army, even
    though they were originally delivered before 1975. Most of them have
    been remanufactured by Boeing Co. and are scheduled for further updates
    that could enable them to keep flying for another 35 years, military
    planners say.

        ----------------------------------------------------------------

                             Gray Around the Rotor
        The helicopters the U.S. military plans to use during a war with
    Iraq are showing their age. A sampling:

    ----------------------------------------------------------------------------------------------------------------
                       Helicopter                                        Primary task                       Avg. age
    ----------------------------------------------------------------------------------------------------------------
    CH-47D Chinook.................................  Carrying troops; hoisting loads.....................     \1\ 15
    OH-58D Kiowa Warrior...........................  Light scout/reconnaissance..........................         12
    Black Hawk.....................................  Troop carrier.......................................         15
    Cobra \2\......................................  Attack, primarily during Vietnam....................         10
    UH-1N Huey.....................................  Carrying troops.....................................         27
    AH-64 A/D Apache...............................  Attack..............................................          9
    ----------------------------------------------------------------------------------------------------------------
    \1\ Average age after refurbishment. Nearly all of the 300 CH-47D Chinooks in use by the military were
      originally delivered before 1975.
    \2\ Now retired by Army; Marines using newer versions.

    Source: WSJ reporting

        ----------------------------------------------------------------

        For the most part, the Vietnam-era Bell Huey helicopters, which
    flew en masse to drop troops into the jungles, have been replaced with
    larger and more capable Black Hawks. But two-thirds of the Black Hawk
    fleet now exceeds 15 years of age. Apache attack helicopters, developed
    in the 1980s, are the Army's newest choppers, but they haven't
    altogether replaced their Vietnam War predecessor, the Cobra.
        The average life span of a military helicopter is 20 years,
    compared with about 30 years for a commercial one. But the
    circumstances these aircraft fly in, including brutal weather and
    difficult terrain such as the deserts of Iraq and the jagged mountains
    of Afghanistan, take a severe toll.
        Because of the lack of funds to buy new helicopters, an ambitious
    remanufacturing program is under way aimed at improving performance and
    staving off safety problems, military officials say. The aircraft are
    stripped down, then their metal airframes are treated for corrosion,
    engines and rotors are rebuilt, and their cockpits are loaded with new
    digital electronics and radar.
        Manufacturers such as United Technologies Corp.'s Sikorsky Aircraft
    unit, which builds and refurbishes about 65 Black Hawks a year, have
    scrambled since the Gulf War in 1991 to upgrade and modify their craft
    to withstand tough desert conditions.
        All told, the U.S. military is spending billions of dollars to
    update its older copters. But military officials say they are still
    concerned on the eve of a potential conflict about the relative health
    of the fleet. There remains ``a severe aircraft-aging problem in the
    helicopter fleet, causing serious safety and readiness issues,'' says
    Loren Thompson, executive director of the Washington-based Lexington
    Institute, a military think tank.
        Maj. Gen. Joseph Bergantz, program executive director for Army
    Aviation, says: ``Because of the aging, more things are starting to
    fail. Our readiness rates are lower now and are getting lower over the
    years.''
        Still, Gen. Bergantz and other military officials insist that only
    a small percentage of helicopter accidents are attributable to
    equipment failures. A recent Black Hawk crash in upstate New York that
    killed 11 soldiers is being investigated.
        In a war with Iraq, Apaches and Cobras would be expected to take
    out Iraqi ground troops that might attempt to head off U.S. forces
    moving in from Kuwait. Black Hawks and Hueys would be the main vehicles
    to swiftly ferry platoons of soldiers and marines into fighting
    position.
        The other services often use similar aircraft, outfitted for their
    special needs. The Air Force and Navy, for example, plan to use the V-
    22, but in a more limited way than the Marines--if the V-22 isn't
    scrapped.
        For helicopters operating in the desert, one of the most insidious
    threats is sand. Not only do sandstorms kick up without notice, but an
    improper approach to landing can envelop a chopper in a dust cloud that
    can instantly disorient a pilot.
        Maintenance crews are working overtime to undo the damage done to
    copters by the desert. After a few hours of operation, many of the most
    delicate parts of the jet engines that power helicopters can become
    coated with glass, from sand ingested into the compressor sections.
        Since the Gulf War, the helicopter manufacturers have developed new
    intake filters that better strain the air sucked into the engines. They
    also have developed a clear tape that is applied to the leading edges
    of rotor blades to cut down on the sandblasting damage caused by the
    rotors whirling through dust clouds.
        For now, to minimize the risk that a combination of aging aircraft
    and tough climactic conditions will result in fatal mishaps, Marine
    pilots have been drilling at their high-desert base near Twentynine
    Palms, Calif., and near their temporary headquarters in the Middle
    East. One Cobra pilot with the call sign ``Weasel'' says, ``there's a
    lot more emphasis'' at present on repeatedly practicing takeoffs and
    landings to get a feel for conditions and how their choppers respond.
        At their base near Iraq, the 3rd Marine Airwing of the 1st Marine
    Expeditionary Force are reminded daily of the odds. Beneath the flight
    schedule hung on the wall in the mess hall, a posting declares, ``In
    the Gulf War, 18 aircraft were destroyed. Only 3 were a result of
    direct enemy action.'' The squadron's commanding officer made it even
    clearer in a briefing last week for his pilots. ``The enemy ain't going
    to kill you, probably. It's going to be these landings,'' he said.
        The 3rd Marine Aircraft Wing's safety officer, Maj. Bruce Laughlin,
    says in the 1991 Gulf War more than a third of Marine helicopter
    mishaps--from minor equipment damage to fatalities--were a result of
    brownout conditions or other weather-related visibility problems. He
    says in Afghanistan--where he flew 75 hours in Cobras made by Textron
    Inc.'s Bell Helicopter, of Forth Worth, Texas--the numbers followed a
    similar trend.

        Senator Leahy. This talked about how our helicopter fleet
    is aging. There is one thing I would point out. We added funds
    in the budget so that the 101st is slated to equip many of its
    Black Hawk helicopters with the Health and Usage Monitoring
    System (HUMS), the integrated mechanical diagnostic health and
    usage monitoring system. I have to read out the actual words
    for it, but this basically does continuous diagnostics on all
    of our helicopters. If they are so equipped, they come back,
    you can instantly download which helicopters are ready to go,
    which ones have problems, and so forth. Does the Army plan to
    move forward with this technology, either in the fleet they
    have now or in subsequent fleets?
        General Shinseki. I think philosophically the answer to the
    question is, absolutely yes, that having this ability to
    trouble-shoot our equipment without having to do it with purely
    manual labor is the way we intend to go, both with our
    investments in future systems, and where we can to insert those
    capabilities into our current inventory.
        Some of that inventory is not conducive to applying----
        Senator Leahy. I understand.
        General Shinseki [continuing]. The new technologies, but
    where we can, that is very much in our interest.
        Senator Leahy. I would also think in a wartime situation,
    where you do not have a great deal of time to do diagnostics,
    when the helicopters come back, for the field commander to at
    least be able to say, number 1, 5, and 12 are ready to go, but
    this one is not, and be able to know it instantly, would be
    awfully helpful to you.
        General Shinseki. Right.
        Mr. White. Let me add, Senator, if you do not mind----
        Senator Leahy. Yes, Mr. Secretary.
        Mr. White. We laid out several years ago an aviation
    modernization program that will result in a reduction in the
    overall size of the fleet by about 1,000 helicopters, but will
    wash out of the fleet all the Cobras, the Vietnam-era aircraft,
    the Cobras first, which are going now, and Hueys by fiscal year
    2004. I think the picture in the Wall Street Journal article
    was of a Marine Corps twin-engined Huey.
        Senator Leahy. It was.
        Mr. White. In the meantime, we are investing in all of our
    primary helicopters Apache Longbow, Black Hawk, both newer
    aircraft and conversions and then, of course, conversions of
    our Chinook fleet. However, even with that modernization,
    though, we do not meet our standard of having the average fleet
    life of helicopters below the half-life of the aircraft, below
    10 years. The only fleet we make that in is Apache, and we are
    above that in Black Hawk, and we are above that in Chinook, and
    that is why the funding of the modernization lines on all those
    aircraft are so important, because obviously we are flying them
    right now.
        Senator Leahy. I agree with that, but keep an eye on the
    HUMS.
        Mr. White. I will do that.
        Senator Leahy. I have a parochial interest, but I also have
    just an interest in thinking it is probably going to save us a
    lot of money in the future, and I realize retrofitting is one
    issue. As you modernize fleets, it is another.

                               SOLDIER EQUIPMENT

        We also have, when the United States (U.S.) Special Forces
    and the 101st and 82nd went to Afghanistan they were given an
    advanced combat helmet. I have talked to the troops. I have
    actually got E-mails. They said they like the--it is lighter
    weight, added protection and so on. One soldier apparently took
    a couple of AK-47 rounds in the head during Operation Anaconda
    and kept on fighting, so it is pretty impressive, impressive
    for the equipment, also pretty impressive for the soldier,
    too----
        General Shinseki. Absolutely.
        Senator Leahy [continuing]. Under a circumstance like that.
        Are these going to be done in other--I mean, are we going
    to continue to get this helmet out to the troops.
        General Shinseki. Yes, sir.
        Senator Leahy. Do you need more money? Do you need more
    money, General? Here is your chance. Do you need more money in
    this budget for that?
        General Shinseki. Senator, 2 years ago we did something we
    should have done probably a long time ago, and you know, in our
    programs we talk about systems, whether they are tank or
    aviation. We declared a system for soldier equipment, and
    instead of buying individual pieces, we talked about the entire
    ensemble a soldier deploys to combat with, whether it is
    uniforms, whether it is ballistic protection for the chest and
    the head, and by the way, they have ballistic protection for
    the body as well, and it works as well as that helmet you
    describe.
        I ran into a youngster here a few weeks ago who was
    carrying around the plate he was wearing and wanted to show me,
    this thing had hit about an inch off the margin and I asked him
    what he thought. He said, make it a little bit bigger, it will
    be fine.
        What we have been able to do, because we focused on
    equipping the solder as a system--and assume that our
    environment is sort of out there in the outdoors. If it is hot,
    we wanted equipment that would aerate him or her, if it was
    wet, keep them dry, if it was cold, keep them warm, and
    whatever we gave them had to give them better protection than
    the uniform they wore.
        As a result, we are fielding to the units going into
    Afghanistan, the 82nd and following that the 101st, but Ranger
    Regiment as well, a new kit that does a lot of the things you
    describe, and so for about $12 million a brigade formation we
    are doing that, and we will continue to do that, and more money
    will help us to go faster.
        Senator Leahy. Including the helmet?
        General Shinseki. The helmet is part of that.

                                   LAND MINES

        Senator Leahy. General, let me ask you one question, too.
    Last September, the General Accounting Office (GAO) issued a
    report--they did quite an intensive investigation. You and I
    have discussed some of this before, and they did their
    investigation based on DOD data, the effectiveness of land
    mines in the first gulf war.
        The GAO found no evidence, none, that our mines, either
    antipersonnel or antitank mines, had any positive military
    effect. They did say, and I have heard this from commanders in
    the field, they impeded the mobility of our own forces. About
    2,000 of our self-destruct mines did not self-destruct as
    advertised, and the Department, which commented on this report,
    did not disagree.
        Current U.S. land mine policy calls for the elimination of
    antipersonnel mines, including self-destructing mines, outside
    of Korea by fiscal year 2003. Do you have any plans to use
    antipersonnel mines--I am talking about other than man the
    loop. I have no problem with man-the-loop antipersonnel mines,
    but do you have plans to use antipersonnel mines in the war
    with Iraq?
        The reason I ask is, I know that Great Britain, Spain, and
    Australia, who are there with us, have banned these from their
    own arsenals.
        General Shinseki. Senator, when you say, antipersonnel
    mines without manning the loop, you are talking about what we
    refer to as the dumb mines, once laid they are----
        Senator Leahy. Including, apparently, these 2,000 of our
    so-called self-destruct mines did not, so they are kind of
    dumb, too.
        General Shinseki. Yes. Well, the performance of the self-
    destruct mines, of course, it is not perfection, but there is a
    very high confidence factor in their ability to be destroyed or
    to self-destruct.
        Senator Leahy. But it is not a man the loop. I mean,
    Claymore has man the loop, but these do not.
        General Shinseki. Well, the mines that are laid out there
    that can be destroyed would have a man in the loop in terms of
    setting the amount of time they are there, whether it is 4
    hours, 15 hours, or days, or self-destruct on command, as
    opposed to the mines that you and I are familiar with, having
    been laid in Korea, and they are essentially there until
    removed.
        I do not know what plans commanders have for the employment
    of mines on operations. It is something that commanders reserve
    for those situations in which they have to make that decision,
    but those decisions are made at a significantly high level on
    whether or not the authority to dispose of and employ mines,
    but there are a set of circumstances in which a commander's
    formations are at risk, and it has to be protected flanks, or
    they find a force that is a significant threat that they want
    to fix and expose for attack by other service joint fires.
    There are situations in which mines are useful, and I am sure
    that commanders have that decision set in their consideration.
        I am not aware that there are any dumb mines that will be
    employed. In fact, I am confident that there are not.
        Senator Stevens. Thank you very much.
        I have failed to note that we have a new staff director,
    gentlemen, Sid Ashworth, a former Army civilian who has a son
    in OCS, Officers Candidate School now, and I believe she is the
    first woman to ever head a staff of a defense appropriations
    subcommittee in the Congress, so we are pleased to have one of
    your former members of your Army with us.
        General Shinseki. Thank you. Of course, the chairman and I
    did not miss the fact that you had a new staff director, Mr.
    Chairman.
        Senator Stevens. Senator Dorgan.
        Senator Dorgan. Mr. Chairman, let me wish Sid well and
    welcome her to her new position.

                           FUTURE REQUIREMENTS COSTS

        General Shinseki, you have used some candor recently in
    testimony that turned out to be painful for you and refreshing
    for some of us, and I do not want to get you in trouble today,
    but I do want to ask some questions about costs.
        This subcommittee appropriated about $365 billion for
    funding for this fiscal year, and that will increase when we
    receive the supplemental, so this subcommittee wants to
    appropriate, I think everyone on this subcommittee, we want to
    appropriate sufficient money to meet the needs of the men and
    women who serve this country. In order to do that, we need to
    try to have some understanding of what future requirements are.
        Now, this budget that we are having a hearing on today is
    for fiscal year 2004, beginning October 1, and the supplemental
    that we will receive apparently in a week or so will be to
    cover costs for this fiscal year, fiscal year 2003. Is the
    budget that we are discussing now a so-called, ``peacetime
    budget,'' which does not include the costs of a potential
    occupation of Iraq? I guess that is my first question.
        General Shinseki. That is correct. It is a budget that does
    not carry any funding for the contingencies we are now dealing
    with, either Afghanistan or in Iraq.
        Senator Dorgan. I understand. Does it carry funding for the
    war against terrorism? There was a previous question asked of
    the Secretary about the cost of the war against terrorism, and
    that apparently is being funded out of other accounts, so we
    will make that up in the supplemental, but with respect to
    October 1 and beyond, in the coming fiscal year, does the
    budget request that we are now considering include money for
    the war on terrorism?
        General Shinseki. It does not.
        Mr. White. No.
        Senator Dorgan. So what I am trying to understand is this.
    We are having a hearing to try to think through what will our
    obligation be beginning October 1, 2003, for fiscal year 2004.
    In order to understand that, we need to understand what all of
    the costs and obligations will be. We know for a certainty
    this, that we will continue the war on terrorism. That is a
    certainty.
        We know for a near certainty, I suspect, that we will have
    some costs and responsibilities with respect to Afghanistan,
    and we know for a near certainty that we will have
    responsibilities and costs with respect to Iraq, and if what
    happens at the end of the week is what we expect will happen,
    my guess is that will be some kind of an occupation force for a
    period of time.
        Those are three areas all of which we have some reason to
    want to quantify as a subcommittee in order to evaluate what
    our obligation might be for fiscal year 2004, beginning October
    1. Can you help us with any three of those areas, not with
    respect to the supplemental. I am talking about with respect to
    the new fiscal year budget and the appropriation request that
    we are going to want to be considering.
        General Shinseki. I can only apologize Senator, that when
    the fiscal year 2004 budget was put together the data that you
    are asking about was not refined enough to be able to be
    included in it, and any potential discussion about what the
    operation--an operation in Iraq or any follow-on probably is
    undefined at this point, and I think once commanders understand
    what that mission will require and state then what it will take
    to do that, those numbers will become clearer, but I do not
    think either the Secretary or I are able to provide any more
    clarity on it today, with respect to Iraq.
        Senator Dorgan. Well, that is certainly true with respect
    to Iraq, but it is not likely true with respect to Afghanistan
    and the war on terrorism. Can you address at least those two,
    and then let me come back to Iraq?
        Mr. White. The Afghanistan operation and the war on
    terrorism, because we have been conducting it for 18 months,
    assuming that, the rough cut number that--and I think this came
    up in front of previous committees--that we asked for for the
    non-Iraq tasks was about $6 billion for fiscal year 2003, and
    we got a part of that covered in the omnibus spending bill for
    fiscal year 2003, which provided, I think, $10 billion, six of
    which went to defense and about, a little under $2 billion came
    to the Army, so that partially covers that increment, but that
    is roughly what that is.
        Senator Stevens. Would the Senator yield to me?
        Senator Dorgan. I would be happy to yield.
        Senator Stevens. Realizing this question would come up, I
    asked the Congressional Research Service (CRS) to give us a
    memo to review how the United States has budgeted for wars in
    the past, and I have just received that, a copy of that.
        Based on an examination of the previous CRS reviews of
    funding for wars and other major military operations, it
    appears, with one possible exception, that Presidents have not
    requested and Congress has not provided funding for wars in
    advance of the start of the operations. Rather, administrations
    have requested fundings after the operations have begun, and
    Congress has subsequently appropriated monies to meet
    specifically documented budget requirements.
        That one exception was in the case of President Johnson,
    but the discussion I had last evening was, we will get a
    request once these new operations have commenced.
        We do intend to cover the war against terrorism and the
    balance of this year as far as the supplemental is concerned in
    a document we should receive next week.
        Senator Dorgan. Well, you make a fair point, and the point
    I was trying to make is that with respect to the war on
    terrorism, and Afghanistan, that, the cost of that I assume
    will be built in routinely for the coming fiscal year budgets
    for the appropriations requirements.
        Senator Stevens. To the contrary. They will be built into
    supplementals that are associated with it, and we have funded
    Afghanistan on a supplemental basis. We are funding now the
    ongoing, continued operations of the Department of Defense in
    terms of structural requirements of the Army and other
    agencies.
        Senator Dorgan. I do not understand that, because at least
    with respect to those hostilities that are over with respect to
    Afghanistan, those are longer-term recurring obligations, and
    we just as well plan for them, but I accept the point you make
    how it has been done previously, and I accept the point on
    Iraq. Hostilities have not yet begun there.
        At some point I assume planning has been underway for an
    occupying force and we will be alerted to what the costs are.
    General Shinseki, you were candid before another committee, and
    I will not ask you questions about that now, because I
    understand that created quite a furor inside the Department of
    Defense, but I would just say, as one member of the Committee,
    we are going to fund what is required to be funded to support
    our military, but I would also think it would be helpful for us
    to be involved in some of those discussions. I do not think it
    is detrimental to have those numbers out there as the planning
    ensues, but let me ask one additional question.

                ACTIVE COMPONENT (AC)/RESERVE COMPONENT (RC) MIX

        We have a lot of men and women of the Guard and Reserve who
    have been called up, citizen-soldiers. They have left their
    jobs and their families, and they are serving this country
    admirably. When you talked about end strength earlier, I
    believe you were responding to a question from Senator Inouye.
    I think one of the questions for this Congress perhaps, and you
    especially, is what kind of call-ups and deployments are
    required, to the best that you could estimate, in the next
    several years as we begin contemplating occupying forces here
    and there?
        Do you need an increase in end strength? Do you intend to
    continue to rely more heavily on call-ups of Guard and Reserve,
    because all of that I think plays a role in the longer-term
    discussions about what kind of permanent funding is necessary
    and what size of an Army do we need? Can you respond to that?
        General Shinseki. As I have testified before, Senator, I
    think end strength of the Army is an issue, and the fact that
    even before the build-up for a potential Iraq, we were carrying
    something on the order of 20,000 to 30,000 Reserve Component
    soldiers routinely mobilized for Sinai, for Bosnia, and
    missions of the sort, and imposing a requirement, intensity of
    OPTEMPO on the Reserve Component, and suggesting that there is
    an issue here about taking some of those day-to-day missions
    off the Reserve Component and sort of preserving them for these
    large emergencies that we have to deal with.
        That is all part of the discussion, the study that the
    Secretary has us focused on, but I do think in the final set of
    study outputs, the end strength of the Army is smaller than the
    mission set we are asked to carry. Now, you can reduce the
    missions, you can increase the Army end strength to be able to
    accommodate, but some place in there, adjustments will be
    required.
        Mr. White. The other dimension of this, if I might,
    Senator, the other dimension, as the Chief said, is the Active
    Component-Reserve Component mix of units. There are some
    Reserve Component units, military police (MP) units, for
    example, that have been constantly mobilized and appear to be
    in high demand, and so if that is the case, you ask yourself,
    why don't you have them in the Active Component if you are
    constantly mobilizing Reserve Components, so one of the things
    that Dr. Chu is running a study on that we are all actively
    participating in is, is the balance between AC and RC correct
    not only in the quantity of units, but in types as well.
        Senator Dorgan. Well, I think that is a very important
    question, and I hope you will keep us informed of this study,
    because I am not asking on behalf of people who do not want to
    serve. They are members of the Guard and Reserve. They
    understand deployments. Many of them have been deployed a
    number of times, but I think the longer-term question is,
    should in some of these circumstances there be active duty end
    strength increases.
        Let me make one final point relative to something the
    chairman said. It is my belief that the war against terrorism,
    unlike other classic wars where we have had battles that occur
    and then recede, and there are surrenders and agreements and so
    on, the war against terrorism, I think, will be with us for a
    long, long time. It is my expectation that 5 and 10 years from
    now we will talk about the cost of continuing to pursue the war
    against terrorism.
        For that reason, I think we would be wise at least to think
    through the proposition of that piece being a part of what we
    decide and what we plan for the strength of our Armed Services
    to be in order to meet those obligations, rather than to do
    that on a supplemental basis year after year.
        That is the point I was trying to make, Mr. Chairman.

                       SPECIAL OPERATIONS COMMAND (SOCOM)

        Senator Stevens. If the Senator would yield, the committee
    just went down to the Special Forces Command and visited them
    in Tampa. There has been a reorganization of the military for
    that purpose, and we expect to see funding through that
    organization for most of the contingencies that relate to the
    war on terrorism. That used to be a support command. It is now
    an operational command and will have units of its command in
    several other commands throughout the country.
        You are right, I think we are on that course now, but so
    far the war on terrorism has been funded through supplementals,
    and I think when we get--this is an overview of the overall
    budget of the Army. When we get the individual components here,
    you will see how that is starting to work into the projections,
    but I do not think we have a full funding yet for the war on
    terrorism in the fiscal year 2004 budget.
        General Shinseki. Mr. Chairman, may I just add to your
    observation here? In the fiscal year 2004 budget, the Army in
    support of our Special Operations Forces in SOCOM are adding
    something in the order of, I think, 1,800 additional personnel
    spaces. We put an additional $1.1 billion out of Army resources
    into Special Operations Command.
        Our entire fiscal year 2004 CH-47 production line of 16
    aircraft are being provided to Special Operations Command to
    replace and to augment the capabilities they have, so the
    Army's production of CH-47s next year are all going to SOCOM.
    We are taking a year sort of a break before we can get----
        Senator Dorgan. As a final point, General, if later this
    week your soldiers are ordered to military action, you know
    that the prayers of all Americans go with them as you and the
    Secretary and others issue those orders.
        General Shinseki. We certainly know that.
        Senator Dorgan. Thank you very much.
        Mr. White. Thank you.
        Senator Stevens. Thank you, Senator. Senator Hutchison.

                         STATEMENT OF SENATOR HUTCHISON

        Senator Hutchison. Thank you, Mr. Chairman.
        First I want to say that my loss is your gain with Sid
    Ashworth, and she did a wonderful job on military construction,
    and I love my replacement, but I sure always will miss her, and
    I am very pleased that you did promote her.
        I also want to say, the first time I met General Shinseki
    was on a runway in Bosnia, and you were really overseeing the
    beginning of the ramp-up there, and the first time I went into
    Bosnia was with Senator Stevens and Senator Inouye, and we were
    in helmets and flak jackets, and they were shooting at us from
    the hills, so we very much feel that you have served our
    country so well, and I do wish you well, and I want to say I
    think you have done a terrific job.
        General Shinseki. Thank you, Senator.
        Senator Hutchison. And I also want to say, Secretary White,
    I really enjoyed working with you, and you have been honest and
    straight up with me in all of our dealings, and I appreciate
    your service very much.
        Mr. White. Thank you.

                                TRAINING CENTERS

        Senator Hutchison. As you know, I am chairman of the
    Military Construction Subcommittee, and we have talked about
    looking at the foreign bases, and as I have visited many
    foreign bases with my colleagues here I have found training
    constraints, I have found artillery range constraints, air
    constraints, and as a matter of fact, in Germany, for instance,
    Grafenwoehr, one of the premier training areas in Germany, only
    has 18,000 acres.
        And yet I look at the capabilities that our own bases in
    America provide, I look at the National Training Center in
    California, which has almost 500,000 acres, Fort Bliss has a
    million acres, and I just want to ask you, are you looking for
    new training locations in other places in Europe? Are you
    looking at bringing some of the training capabilities home to
    America? Are you looking at Fort Bliss in particular as a
    reinvigorated maneuver training area? What are you looking at
    to try to, in your transformation, make sure that we are not
    looking at these continued training constraints?
        General Shinseki. Well, Senator, we are doing all of the
    above. Even Grafenwoehr today is not the Grafenwoehr Secretary
    White and I trained in many years ago, and we have augmented
    the capabilities there because of that very small footprint.
        We are trying to stay in touch with our combatant
    commanders here. They have been asked to take a look at their
    regions and decide what Army capabilities they need forward and
    where should they be located, and so we are working with
    General Jones and General LaPorte and Admiral Fargo.
        We have suggested a long-term strategy is helpful. To
    answer the questions about where do we see our interests, the
    advantage for forward presence has a very remarkable effect
    because of our ability to engage other armies, so there is a
    return there, but what do the combatant commanders need
    forward, and then we will decide.
        What is not needed forward we will bring back to the
    continental United States and position them where their ability
    to do the things that armies have to do--they have to train
    wherever they go, and they have to train aggressively. They
    have to be able to deploy from wherever they are stationed, and
    then do the best that we can to take care of those soldiers and
    families in terms of their lifestyle, and we are doing all
    those things.
        As one of those youngsters that grew up in the Dona Ana
    Desert there at Fort Bliss, I know it pretty well. It is a
    wonderful training area.

                           DOMESTIC AND FOREIGN BASES

        Senator Hutchison. Well, my question is, are you looking at
    the timing, not only of our fiscal year 2004 budget so that we
    are preparing, but secondly for the fiscal year 2005 Base
    Realignment and Closure (BRAC)? Are we going to know what the
    needs are going to be of our domestic bases in regard to the
    foreign bases before we start shutting down or retooling bases
    here?
        Mr. White. Well, I think you have to. That is why Secretary
    Rumsfeld is pushing the combatant commanders hard to bring in
    their recommendations on what the posture of the force should
    be in their regions, and why we on the Title X side will then,
    and in concert with the combatant commanders, will line up the
    investments that we intend to make and realign the force, which
    is obviously inclusive of the BRAC initiative back here in the
    continental United States, and we do not have much time, in my
    opinion, to figure that out.
        Senator Hutchison. Well, we certainly do not with the
    fiscal year 2004 budget, because we do not want to be putting
    one dime in an overseas base that is not going to be long term.
        Mr. White. Right.
        Senator Hutchison. And we do want to be putting our dimes
    in our bases here, and I want to say, I appreciate your
    emphasis on installation management. I think that is a very
    good sign, because particularly as we begin to look at closing
    bases we want to make sure that the ones that are going to be
    ongoing are well maintained, and we are seeing money go away
    from that into operations, and I know there is always a strain
    on the budget, but I think your emphasis there is well put, but
    I have been pushing now for 2 years to find out what your long-
    term strategies are in the foreign bases, and we have a report
    that was due April of last year that still has not come in. I
    do understand, however, that there is a new emphasis----
        General Shinseki. There is.
        Mr. White. There is.
        Senator Hutchison [continuing]. And that it is being pushed
    now, which I think is good.

                          RESERVE COMPONENT RECRUITING

        A second area that I just wanted to talk about, again, in
    talking to so many of the Guard and Reserve units, I am
    concerned, not in a time of war, because our troops will always
    be there giving in a time of war. The cause is there.
        But even back when we were not in a war, I was beginning to
    see a little fraying at the edges with family problems and
    employer problems with our Guard and Reserve because of the
    OPTEMPO, so my question is, are you seeing this? You had a
    little bit in your written testimony, General Shinseki, but I
    would just ask if you are seeing a problem in recruitment of
    Guard and Reserves, and with the heavy reliance that we have on
    them because of the drawing down of our troop strength, are we
    really looking ahead to make sure that we are in the right
    configuration?
        General Shinseki. We are looking ahead, Senator, and I
    think if there is a time when we can get to a good set of
    metrics that says here is what happens to you in a large
    mobilization, both this mobilization for a potential Iraq, the
    mobilization associated with Afghanistan, the global war on
    terrorism, we are going to get some pretty good answers out of
    this, so yes, we are looking at that.
        I, too, have heard anecdotally and in spot cases concerns
    about what the tempo has meant to Guard and Reserve soldiers
    and families. There is, I think, a double effect here, and we
    have worked very hard with employers to suggest to them that
    the service of these military members is important, and we
    intend to look after them, but I have heard some of these
    comments. I am sure there is more out there than I have heard,
    and we are paying attention.
        As I indicated, for the first time we saw a drop in a
    monthly recruiting target, and so we are focused.
        Senator Hutchison. I just hope you will anticipate way
    ahead of a crisis point. I am not worried about getting through
    this this time, but I am talking about 2 years from now.
        Mr. White. Right.
        Senator Hutchison. Thank you, Mr. Chairman.
        Senator Stevens. Thank you very much.
        Senator Shelby.

                               AVIATION TRAINING

        Senator Shelby. Thank you, Mr. Chairman. I will try to be
    as quick as I can. The Army Aviation Training Center, General
    and Mr. Secretary, has developed, as you know, a new training
    aviation strategy called Flight School XXI.
        General Shinseki. Yes, sir.
        Senator Shelby. The program regime focuses on increased
    training for aviators in their so-called go-to-war aircraft.
    Phase 1 of aviation training, the TH-67 training helicopter is
    shortened by 20 weeks here. Phase 2 of the training in the
    aviators' advanced aircrafts of choice has increased in length,
    it is my understanding.
        General Shinseki. That is correct.
        Senator Shelby. This training includes a significant
    increase in time spent in training simulators. Sixty-eight
    million dollars in the fiscal year 2003 budget remain unfunded,
    seriously unfunded, $68 million in fiscal year 2003, $147
    million in unfunded requirements in fiscal year 2004, and
    between fiscal year 2004 and fiscal year 2009 the Army faces a
    Flight School XXI funding shortfall of approximately $1
    billion.
        Flight School XXI obviously is of particular concern here.
    What are your thoughts on that, General?
        Senator Stevens. General, let me interrupt. I have been
    called to a meeting on a matter close to my heart and my State,
    so Senator Inouye has some additional questions. Do you have
    some additional questions, Senator?
        Senator Hutchison. No.
        Senator Stevens. Senator Inouye, will you chair the balance
    of the hearing?
        Senator Inouye. Yes.
        Senator Stevens. Thank you very much.
        Senator Shelby. Thank you, Mr. Chairman. Go ahead, General.
    What are your thoughts on that? I know it is a shortfall. You
    have got an important program.
        General Shinseki. In the fiscal year 2003 budget we are
    looking at Flight School XXI, and we continue to adjust the
    budget to meet the needs here, but as you indicated, we have
    taken a 32-week phase 1, two-phase aviation training, taken a
    32-week program and shortened it to 20 and given more time in
    high-performance aircraft.
        Senator Shelby. Where you need it, right?
        General Shinseki. Where they are needed, and that means
    that aviators are getting to units much better-prepared to
    participate in unit-level training.
        Senator Shelby. So that is the program the way you have
    devised it, is it not?
        General Shinseki. That is correct.
        Mr. White. Yes.
        General Shinseki. That is correct, and that is the way it
    is, and as in all new initiatives, you are not able to fully
    fund it initially, and so we continue to look at the
    adjustments during the budget year. It is in the program as
    well.
        Senator Shelby. I want to help you fund it everywhere I can
    up here with Senator Stevens and Senator Inouye.
        General Shinseki. Sir, I appreciate the help. It is an
    important program for our aviation community.
        Senator Shelby. Mr. Secretary, do you have any comments on
    that?
        Mr. White. No. I am a Fort Rucker graduate, and I
    absolutely agree with the direction, more hours in go-to-war
    aircraft.
        Senator Shelby. Sure.
        Mr. White. Simulation is healthy, produces a better-trained
    aviator to go to the force, and I think that is what we all
    want.

                            LOGISTICS TRANSFORMATION

        Senator Shelby. Thank you. I have one more concern, Army
    logistics transformation. Under the current acquisition
    process, as I understand it, the Army provides requirements to
    an original equipment manufacturer (OEM) who designs the
    system, provides initial provisioning, and hands it off to the
    Government for life cycle support. This as-delivered model then
    drives the Government's spares, manning, and maintenance
    requirements for that system.
        Once the hand-off occurs, it is my understanding that no
    Government agency conducts a methodical and continued analysis
    of the fielded system over time to support what we call an as-
    sustained model, the results of which could provide invaluable
    information to the customer and could save huge amounts of
    operations and maintenance dollars. Better system sustainment
    measures--that is, metrics--are needed to improved the Army's
    acquisition and logistics systems.
        For example, I have been told that the AH-64 transmission
    was engineered for 2,500 hours of use, but the actual average
    useful life is about 2,000 hours. This difference affects
    operations at the lowest levels in terms of budgeting, spares
    storage and manning. It affects the institutional Army in terms
    of materiel buys and extended depot lines. The program managers
    (PM) and program executive officers are affected in that they
    now may have a big engineering problem.
        Given the focus here, what is the Army's plan to develop a
    weapons system sustainment model containing robust metrics to
    accurately reflect the true cost of life cycle systems
    sustainment and force readiness? I know that is a mouthful, Mr.
    Secretary, but both of you understand it well.
        Mr. White. Sure.
        General Shinseki. Senator, you have described where the
    Army has come----
        Senator Shelby. Right.
        General Shinseki [continuing]. Over the last 3 years. Three
    years ago, our logistics community sat here and acquisition
    community sat here.
        Senator Shelby. Absolutely.
        General Shinseki. Today the Army G-4, our logistics
    officer, now sits with the acquisition community, and when we
    talk about design of a system, it is the life cycle interest,
    it is not just the design up front and the fielding. It is, how
    do we think this is going to result in sustainment costs and
    retirement costs at the back end of any weapons system, so that
    is a first major piece.
        General Paul Kern is our logistics war-fighter at Army
    Materiel Command, a terrific commander who was missioned to do
    this logistics transformation initiative, and he has pulled
    that together in rather significant ways.
        Senator Shelby. This could save the Army, all of us a lot
    of money in the long run.
        Mr. White. No question.
        General Shinseki. Absolutely.
        Senator Shelby. I know that is what you are----
        General Shinseki. Absolutely.
        Senator Shelby. But you have got to do the metrics here.
        Mr. White. That is right.
        General Shinseki. And he is in the process of putting
    together the metrics for the whole system. When you look at the
    nose cone on an attack helicopter, the Target Acquisition and
    Designation Sight (TAD) Pilot Night Vision System (PNVS) nose
    cone, probably the most expensive piece on the air frame, and
    if you continue, it continues to have problems and you continue
    to replace it, well, that is one approach to it.
        Another approach is, you take it, you redesign it so you
    are not replacing it quite as often, and it reduces the number
    of mechanics and number of inventory parts that you have to
    hold, so all of this is a broad-gauged, a very refreshing
    approach that General Kern is after and I think in the long
    run, there are going to be huge dividends to be paid.
        Senator Shelby. Well, like the name, life cycle is
    important.
        General Shinseki. Absolutely.
        Mr. White. That is right, and we should as a separate
    matter, because you have a strong interest here, get General
    Kern in to talk about logistics transformation, because it
    affects the research and development (R&D) command, as you and
    I have talked about----
        Senator Shelby. Absolutely.
        Mr. White [continuing]. How the logistics operators
    interface not only with the theater support commands on one
    end, but with PMs, Program Management Officer (PMOs), and we
    will come and give you a separate discussion on that.
        General Shinseki. Tied to the depots.
        Senator Shelby. We will follow up on that, but I knew this
    was what you are doing. We have got to go another step, I
    believe, and maybe you are in that process.
        Mr. White. We are.
        General Shinseki. We are.
        Senator Shelby. Thank you. Thank you, Mr. Chairman.
        Senator Inouye. Thank you very much.

                                STATUS OF FORCES

        Mr. Secretary, the recently released 2002 active duty
    status of forces survey of the Army was issued and showed a
    satisfaction rating of 59 percent. Now, this is much better
    than what it was 3 years ago. I will not go into detail, but
    could you submit to the committee your analysis on whether this
    is good or bad?
        Mr. White. I will do that.
        [The information follows:]
                                Status of Forces
        The Army continually tracks soldier satisfaction with quality of
    life and job satisfaction matters. The satisfaction level with the
    military way of life--59 percent, as reported by the Office of the
    Secretary of Defense July 2002 Status of Forces Survey--is good for
    soldiers, their family members, and the Army. The Army's own survey for
    Active Component soldiers yields similar results. The level of soldier
    satisfaction with the quality of Army life increased from 48 percent in
    1999 to 59 percent in 2002.

                                FORCE PROTECTION

        Senator Inouye. General Shinseki, looking over the fiscal
    year 2004 budget, it appears that the Army will be called upon
    to increase its force protection requirements. For example, you
    will be providing force protection for the Air Force.
        General Shinseki. That is correct.
        Senator Inouye. Now, how will that affect your end strength
    requirements?
        General Shinseki. We have agreed to provide, and I think
    today the number is about 8,500 National Guard soldiers who are
    providing security for Air Force bases, because their air
    police have deployed overseas. To the degree that that is a
    number today, we are prepared to accommodate that, and the
    dollars for that are provided for the Air Force.
        If the Air Force, following this operation, decides they
    are going to increase their air police, whether it is Reserve
    Component or Active, their inventory, it may not have an impact
    on us, but suffice it to say I think in all of these operations
    it is not a precise business, and having capabilities that you
    can draw on is important, and I think this is a good
    demonstration that the end strength business, when you need it,
    you need to have the capability on short notice to stand it up,
    because there are no other alternatives.
        The Air Force requested, we met on this, and we are very
    happy to be able to help them for this short period.
        Senator Inouye. With this program will the Guard and
    Reserve have their own force protection to meet their own
    requirements?
        General Shinseki. They do. Under the homeland security, all
    of us have raised the force protection levels around all of our
    installations to include in the local communities where Guard
    and Army Reserve units reside.

                             AVIATION MODERNIZATION

        Senator Inouye. General, your Transformation program relies
    very heavily upon aviation modernization, and the centerpiece
    is the Comanche. Are you satisfied with its progress?
        General Shinseki. It is. I will defer to the Secretary for
    some of the policy decisions made, because we have just
    recently restructured the program, and I think he is eminently
    qualified to describe it, but the Army's requirement for the
    Comanche is 819 systems.
        As a result of an acquisition board decision we have the
    first 650 of that recognized for the armed reconnaissance
    helicopter. Yet to be determined is the attack version of the
    Comanche, and that will come out in further studies, but we
    have certainly sustained the requirement for this, and the
    Comanche is a key element of our Future Combat System networked
    capabilities.
        Mr. White. Senator, we just went through a Defense
    Acquisition Board cycle on Comanche. We rebaselined the
    aircraft, we focused it squarely on the armed scout version for
    its initial three blocks of fielding. That is our most critical
    need.
        The Kiowa has got to be replaced. We restructured the
    arrangement with the contractors, Boeing and Sikorsky in this
    case, and we brought in outside consultants to look at it, a
    group led by General Larry Watts, former Chief of the Air
    Force, so I am confident that the program is focused correctly
    and now, after 20 years, we have to deliver this aircraft. We
    need it, and so the 2004-2009 POM includes 73 of these
    aircraft. I think the first one for test purposes is 2007, but
    we need to get on with this thing. We will not rebaseline this
    program again.
        Senator Inouye. Some have suggested that the fixed wing
    would do a better job than these helicopters. Do you have any
    response to that?
        General Shinseki. Senator, for the kind of requirements
    that a land force needs in close combat, an armed
    reconnaissance helicopter is important, and just where it has
    to go to operate and what it has to accomplish, and in
    conjunction with unmanned systems, but there is a requirement
    for a manned cockpit some place in the loop here. It is about
    situational curiosity and situational judgment that a manned
    cockpit makes a difference, and for the kind of operations that
    ground forces are involved in, an armed reconnaissance
    helicopter and an attack platform is key to our operations. It
    gets into the close combat support for ground formations.

                               OPERATIONS IN IRAQ

        Senator Inouye. If I may, I would like to make a
    clarification. When I asked the question on volunteerism and
    the Iraq war, I did not want to suggest that our military can
    predict into the future. After all, in a war, there are at
    least two sides. We know what we plan to do and what sort of
    responses we will have, but at this moment, for example we do
    not know what is going to happen to Saddam Hussein--is he going
    to walk, or is he going to do some fighting, and if so, where
    will the fighting be?
        And we read reports in the last 24 hours of his instruction
    to his generals to employ chemical and biological weapons
    systems, and so all of this would obviously have an impact upon
    the cost of war. I realize that it is not possible for the
    military or for anyone here to make any specific requirement or
    predictions. What I think my colleague wanted to note was that
    it would be helpful to us in looking forward as to what the
    costs may be to have some idea of what it would mean in
    addition to our daily work, that is all.

                         ADDITIONAL COMMITTEE QUESTIONS

        And so I would like to--and I speak for other members of
    the committee--submit to both of you questions in writing and
    requests for your response.
        General Shinseki. Certainly.
        Mr. White. Yes, sir.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                Questions Submitted to General Eric K. Shinseki
                   Questions Submitted by Senator Ted Stevens
                           legacy force modernization
        Question. General Shinseki, the Army budget proposes to terminate
    Abrams and Bradley modernization after fielding of modern versions of
    each vehicle to only two divisions. This leaves the 3rd Armored Cavalry
    Regiment, part of the Counterattack Corps, with Abrams and Bradley
    vehicles that are more than 10 years old. Do you believe the Army is
    taking excessive risk in not funding the modernization of the Legacy
    Force?
        Answer. We continue to examine options for the modernization of the
    Counterattack Corps, 3rd Armored Cavalry Regiment included, in order to
    maintain the Corps as a strategic hedge for the future. In the
    meantime, we are gaining irreversible momentum towards transformation
    to the Objective Force. We continue to evaluate the risk in both the
    near term and long term and will propose corrective action if
    appropriate.

                             FCS FIELDING SCHEDULE

        Question. General Shinseki, given the risk associated with the
    Future Combat Systems (FCS), how confident are you that FCS will remain
    on schedule and achieve first unit equipped by 2008, and initial
    operating capability by 2010?
        Answer. We are very confident that we will achieve FCS Increment I
    initial operational capability by 2010 and full operational capability
    by 2012. FCS-equipped units of action will provide Army and Joint force
    commanders with a significant capability that will grow to full
    objective capabilities through spiraling and fielding of subsequent
    increments. There will be two increments of significantly different
    capabilities between 2010 and 2018. Increment I will be fielded in 2010
    to 2018, and in 2018, we begin fielding Increment II. Increment I FCS-
    equipped units of action will possess the core capabilities needed to
    execute the ``how-to-fight'' operational concept.

                            FCS/OBJECTIVE FORCE ROLE

        Question. General Shinseki, what gaps do you feel FCS, or the
    Objective Force could be filling in the current conflict in Iraq, if it
    were fielded today?
        Answer. The potential conflict in Iraq reinforces our efforts to
    provide our soldiers and commanders with the best combination of
    equipment, training, leaders, technologies, and organizations that
    together will assure that we can apply decisive and overmatching
    capabilities against any opponent. I am confident that our current
    forces will be quite successful in the event of hostilities in Iraq;
    however, there are a number of ways--at the strategic, operational, and
    tactical level--that the Army's Objective Force could be even more
    effective.
        The ability of the Objective Force, employing enhanced lift
    capabilities, to deploy using multiple unimproved entry points to
    overcome anti-access measures or political boundaries, would have
    reduced problems in staging for operations. For instance, the rerouting
    of the 4th Infantry Division, caused by the unavailability of friendly
    ports near the northern border of Iraq, would have been unnecessary.
    The increased deployability and modularity of Objective Force units,
    coupled with development of advanced air/sea lift platforms not
    dependent on improved air/sea ports will significantly reduce Army
    deployment and employment timelines greatly increasing the Joint force
    commander's flexibility and options. This will increase the chances of
    achieving operational surprise or preemption. Objective Force units
    will be able to begin operations immediately on arrival, requiring
    minimal reception, staging, onward movement, and integration. Moreover,
    projected reductions in sustainment requirements and reliance on
    strategic-to-tactical battlefield distribution will eliminate the heavy
    logistical infrastructures that could hamper operations and constrain
    responsiveness. Overall, these improvements could strengthen the
    strategic and operational speed, agility, and power of the Joint force.
    The Objective Force will allow our combatant commanders to conduct
    operational maneuver from strategic distances.
        The Objective Force will conduct simultaneous and distributed
    operations across the entire Joint operations area. Commanders will
    have the ability to conduct continuous operations with minimal
    operational pauses, controlling an operational tempo that overwhelms
    the enemy's capability to respond. Finally, the Objective Force will
    directly attack enemy decisive points and centers of gravity through
    air-ground maneuver and fires to extend the reach of the Joint force
    commander and expose any part of the enemy force to destruction,
    dislocation, or disintegration.
        The Objective Force headquarters above brigade will be organized,
    designed, trained, and equipped to fulfill command and control
    functions as the Joint task force, Joint force land component
    commander, or Army forces headquarters with minimal augmentation,
    provided by the standing Joint force headquarters and Joint interagency
    coordination group ``plugs.'' These headquarters will possess the
    inherent capability to interact effectively with multi-national forces,
    other agencies, and non-governmental and private volunteer
    organizations. This would be a vast improvement over our current
    operations in support of U.S. Central Command, where our headquarters
    elements required over 2,100 augmentees.
        The Objective Force will also resolve the Army's lack of
    standardized hardware and software in its current communications
    architecture and systems. The Army's Objective Force design will
    integrate seamless Joint command, control, communications, computers,
    intelligence, surveillance, and reconnaissance (C\4\ISR) systems with
    linkages to current forces, Stryker Brigade Combat Teams, other
    agencies, and a knowledge-based C\4\ISR architecture as the means for
    achieving situational awareness and battle command--the art and science
    of applying leadership and decision making to achieve mission success.
    This allows for automated spectrum and information dissemination
    management, continuous situational awareness, real-time synchronization
    of fires and maneuver, and the ability to effectively develop the
    situation out of contact. The Objective Force will provide our
    commanders with information-enabled forces capable of distributed and
    simultaneous operations.
        Lessons learned and current operations reinforce that maneuver
    forces require a range of fire support that can provide close, all
    weather, responsive, and accurate fires. The Objective Force possesses
    enhanced lethality through networked fires encompassing Joint fires and
    organic capabilities for line-of-sight, beyond line-of-sight, and non-
    line-of-sight fires, deliverable in any conditions of terrain, weather,
    or time. Joint sensor-to-shooter links can rapidly bring lethal effects
    on enemy targets. The Objective Force takes the next step by harnessing
    all-source fires, attack aviation, and intelligence, surveillance, and
    reconnaissance systems to deny the enemy freedom of action, support
    friendly maneuver, and destroy enemy forces and high-value targets.
        The Joint interoperability provided by the Army's Objective Force
    will better complement and enable the capabilities of each of America's
    Armed Services. The Objective Force will provide unparalleled agility
    and versatility by conducting operational maneuver from strategic
    distances and by allowing the combatant commander to open multiple
    fronts. The tailorable command and control headquarters and combined
    arms formations of the Objective Force, with their enhanced
    deployability and reduced logistical footprint, will leverage America's
    strategic reach to address any mission or contingency. In short, the
    Army's Objective Force will hasten the achievement of the combatant
    commander's joint operational objectives throughout the course of
    future campaigns using a combination of speed, power, and knowledge,
    ensuring decisive victory.

                                     ______

                  Questions Submitted by Senator Thad Cochran

                         RECONSTITUTING DEPLOYED FORCES

        Question. General Shinseki, today we have a large number of forces
    forward deployed in preparation for a possible war with Iraq, while we
    simultaneously pursue elements of terror globally. Do you believe we
    will be able to reconstitute our deployed forces in an orderly manner
    for a sustained war against terror while meeting our many other
    commitments around the globe?
        Answer. We are confident that we can balance unit reconstitution
    with our global commitments. Army forces will be an integral component
    of coalition efforts in post-conflict Iraq to provide a more secure and
    stable environment that will enable the Office of Reconstruction and
    Humanitarian Assistance to transition the governance of Iraq to an
    interim Iraqi administration. Despite these continuing commitments in
    Iraq and elsewhere in support of the global war on terrorism and other
    directed missions, the Army will undertake a disciplined, orderly
    reconstitution of those forces involved in combat. We will use our
    experience with reconstitution after returning forces from Operation
    Desert Storm, Bosnia, and elsewhere to inform and refine our efforts.
    The Army, in coordination with the Office of Secretary of Defense, the
    Joint Staff, Central Command, and other regional and functional
    combatant commanders will determine the priority and timeline for unit
    reconstitution.

                      RESERVE COMPONENT PAY CONSOLIDATION

        Question. I understand the Office of Secretary of Defense would
    like to consolidate the Active, National Guard, and Reserve Military
    Pay Accounts into one Account that would be managed by the Active
    Component. Do you think we can make a significant change like this
    without jeopardizing the integrity of the Guard and Reserve Military
    Pay Accounts?
        Answer. Yes, pending the necessary legislative changes, and
    coordination of accounting processes and related systems. The Reserve
    and National Guard components will continue to have oversight of their
    programs without jeopardizing the integrity of their pay accounts.

                      ADVANCED ARMY RAPID EMPLACED BRIDGE

        Question. Last year, you provided the Subcommittee a response for
    the record concerning favorable progress being made on the Advanced
    Army Rapidly Emplaced Bridge that is also known as the Composite Army
    Bridge. For the record, could you provide an update of your assessment
    of this important program?
        Answer. The Advanced Army Rapidly Emplaced Bridge program continues
    to be a success for the Army. The Rapidly Emplaced Bridging System is
    an interim system designed to support the Stryker Brigade Combat Teams
    (SBCT), which provides tactical bridge support across gaps of up to 13
    meters. Current funding levels in the Program Objective Memorandum will
    purchase the Army acquisition objective of 40 bridges to support the
    SBCTs and provide an interim solution for the Objective Force.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

                               WHITE SANDS/MTHEL

        Question. The Army and our Israeli partners continue to make
    progress on the Mobile Tactical High Energy Laser (MTHEL) program. I
    was very pleased to see that the Army has given strong support to the
    program in the President's fiscal year 2004 budget request. And I would
    like to take this opportunity to thank the Army for its sound
    management of this program.
        Now that the Army has committed to pursuing MTHEL as its solution
    to rocket and artillery threats, can you update us on the status of
    negotiations with Israel over how to define the system's requirements?
    Has the Army reached agreement with Israel over how to share funding of
    the program?
        Answer. The U.S. Army, in conjunction with the Israeli Ministry of
    Defense and Israeli Air Force, is working to define Israeli MTHEL
    requirements for a combat-effective laser system that can be realized
    within the cost, schedule, risk, and disclosure constraints of the
    MTHEL program. The Army supports the pre-Milestone B development and
    delivery of at least one chemical-based MTHEL prototype for the
    knowledge and understanding we will glean from the process as we work
    to define the directed energy component of our Objective Force enhanced
    area air defense system. However, our long-term focus for directed
    energy is on the development of solid-state laser technology. While
    this requirement process is iterative in nature and complicated by the
    diversity of operational and technical requirements, satisfactory
    progress is being made. The common operational requirements document
    should be completed and sent to the Israeli Ministry of Defense for
    validation and use within their acquisition process within the next
    several weeks.
        The U.S. Army and the Israeli Ministry of Defense have not entered
    into a formal agreement on how to share funding for the MTHEL program.
    Since Israel's involvement in MTHEL will be via a foreign military
    sales (FMS) agreement, the FMS laws under USC Title 22, prohibit the
    MTHEL program from being a formal ``cost-sharing'' or ``cooperative''
    program. This is a change from the Tactical High Energy Laser (THEL)
    advanced concept technology demonstration (ACTD) memorandum of
    agreement (MOA) which was governed by USC Title 10 and allows
    cooperative research and development efforts and formal cost-sharing
    agreements. However, the Army's intent is to make funding contributions
    to the MTHEL FMS case as provided for under Title 22. Furthermore, the
    Army's intent is for the contributions to equal the FMS funds provided
    by the Government of Israel.
        The MTHEL program will be conducted under Amendment 6 to the THEL
    ACTD MOA. The Defense Security Cooperation Agency general counsel has
    crafted the language in Amendment 6 to ensure it complies with FMS laws
    under USC Title 22. Authority to begin formal negotiations on Amendment
    6 with the Government of Israel will be granted as soon as the
    Department of Defense approves the MTHEL summary statement of intent.
    Again, Amendment 6 does not state a cost-sharing arrangement for MTHEL.
    In order to comply with USC Title 22, Amendment 6 states that Article 5
    (cost-sharing) of the THEL ACTD MOA does not apply, and further states
    that costs will be apportioned, not shared, in a manner to be
    established in the FMS cases.

                               WHITE SANDS/HELSTF

        Question. The Army continues to do a good job managing the High
    Energy Systems Test Facility (HELSTF) at White Sands Missile Range.
    HELSTF is the only facility of its kind in the world where state-of-
    the-art laser testing and evaluation is conducted. Army, Navy and Air
    Force laser programs continue to make significant strides because of
    this testing capability. But in order to maintain this progress it is
    important that the facility's assets be available for testing as
    scheduled.
        In the last two appropriations cycles combined, Congress has
    designated over $12 million for the Navy to do megawatt laser tests for
    cruise missile defense. Unfortunately, the megawatt MIRACL laser has
    not been available to meet the Navy's needs.
        Can you update us on the status of the MIRACL laser?
        Answer. The Mid Infrared Advanced Chemical Laser (MIRACL) is
    undergoing recertification of its subsystems. This recertification is a
    critical part of a site-wide program to enable the HELSTF to continue
    to provide world-class support to the directed energy weapons
    development programs of all the Services. The MIRACL device itself, its
    optical train, and the Sea-Lite beam director are in good condition and
    ready for use. The pressure vessels and associated piping systems that
    supply reactant gases to the laser are being inspected to insure that
    they can be used safely. This inspection will be completed by mid-May.
    All activity required to enable the safe and effective operation of the
    MIRACL will be completed by July 1, 2003.
        Question. Does the Army have a plan to bring this laser back on
    line so the Navy can move to its next phase of testing?
        Answer. The MIRACL will be exercised on July 1, 2003, in a ``burn-
    in'' test to demonstrate that the MIRACL can be operated safely and
    effectively. This test will be conducted at a power level in excess of
    one megawatt of output power. This power level is adequate to meet the
    Navy's test requirements. The test preparations have already started,
    and the Army is confident the system will be available to the Navy in
    mid July after it is refueled.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                                TRAINING RANGES

        Question. Given the current state of the Army's existing training
    ranges and training centers and the anticipated demands of the Stryker
    Brigade Combat Teams and the proposed Objective Force, are you
    satisfied those ranges and training centers can meet the needs of the
    transformed Army? Does the proposed fiscal year 2004 budget fully fund
    the identified needed upgrades?
        Answer. The Army has a solid range modernization program in place
    that fully supports the training requirements of the Stryker Brigade
    Combat Teams (SBCT). Ranges are under construction, in design, or in
    the Army program that support the transformation of the six SBCTs. We
    have 11 range projects for which the construction contracts will be
    awarded in fiscal year 2003. We have an additional 10 projects that are
    contained in the fiscal year 2004 President's Budget. Other projects
    are programmed for fiscal year 2005. This range modernization effort
    includes a significant improvement to our training infrastructure in
    Alaska and Hawaii. These locations previously had not been modernized
    to the extent of ranges on our installations in the continental United
    States. We are correcting that situation.
        We do, however, have shortfalls in our ability to operate these and
    other ranges Army wide. In fiscal year 2004, our range operations
    shortfall to fund our critical requirements is $5.1 million, Operations
    and Maintenance, Army (OMA); $1 million, Operations and Maintenance,
    Army Reserve (OMAR); and $2.4 million, Operations and Maintenance, Army
    National Guard (OMNG).
        Our Integrated Training Area Management program, that is an
    integral part of range operations, is similarly under-funded in fiscal
    year 2004. The shortfalls are $6.9 million, OMA; $0.3 million, OMAR;
    and $7.7 million, OMNG.
        With regard to our Objective Force ranges, we are still in the
    early stages of defining standard range requirements based on the
    operational capability of the Future Combat Systems (FCS). Our
    definition of those range requirements, combined with stationing plans,
    will determine the specific range requirements for the Objective Force.
    We intend to capitalize on programmed ranges wherever possible by
    adding capability to programmed range modernization projects where
    Objective Force units will be stationed.
        Question. Are you satisfied with the current locations and manning
    of the existing national-level training centers?
        Answer. Although we are satisfied with both the current locations
    and manning levels at all of our combat training centers (CTCs), we
    must continually reevaluate how we replicate and incorporate
    operational lessons learned, technological advances, and asymmetric
    threats into the training program ensuring that our soldiers and units
    are trained to the highest possible standard against emerging threats
    and that our CTCs remain as the Army's premier collective training
    opportunities.
        Based upon lessons learned from previous and current operations,
    the Army is pursuing development of a ``deep-attack'' training
    capability for Army attack aviation units that would offer the same
    degree of realism and standards that the Army provides ground maneuver
    units at CTCs. Our intent is to include the deep operations assets of
    all Services. For aviation units in United States Army Europe, the Army
    conducts an annual deep attack exercise into Poland. For aviation units
    in the continental United States, the Army is looking at conducting
    exercises at either the National Training Center (NTC) in Fort Irwin,
    California, or at the Western Army Aviation Training Site (WAATS) in
    Marana, Arizona.
        A proof-of-principle exercise was conducted at NTC in April 2002,
    and one is planned this year at WAATS. The exercise at WAATS will
    integrate live, virtual, and constructive training capabilities. Live
    forces will use the multi-service training areas in the greater WAATS
    area to include ranges managed by Luke Air Force Base, Marine Corps Air
    Station Yuma, and the Yuma Proving Grounds. Simulations will be
    generated from Fort Hood, Texas. A corps commander will serve as the
    exercise director and will provide the effects coordination cell as a
    player at the operational level. Depending upon the availability of
    headquarters, options are being explored to establish an Air Force air
    operations center to control the air war. Live forces will include an
    aviation brigade headquarters, an attack helicopter battalion, a
    general support aviation company and a Multiple Launch Rocket System
    battalion. Potential Air Force assets include attack aircraft from Luke
    Air Force Base. All live assets that are not available will be
    incorporated through simulations. Based on the outcome of this exercise
    and of the exercise previously conducted at NTC, the permanent training
    location in the United States will be determined.
        Question. Given the need for joint training opportunities, and
    considering the work that the Joint Forces Command is doing in this
    area, do you see any major changes to the tactics, techniques, and
    procedures at the Army's national training centers? If so, what changes
    do you anticipate?
        Answer. The overriding principle governing training at Army major
    training centers is ``train as we fight.'' To this end, the Army
    requires forces participating in training at major training centers to
    perform the tasks they will during operations, with the equipment they
    must use during operations, under the conditions they will face during
    operations, to the standard required for mission success, and with the
    other organizations they must operate. We have worked diligently to
    replicate these operational requirements at each Army maneuver combat
    training center and believe we have been successful for our targeted
    training audience--brigade headquarters and battalion-level units. To
    the extent that these units operate with and accept services from other
    Services, we strive to integrate in training these requirements for
    interoperability tactics, techniques, and procedures. For example, each
    maneuver combat training center incorporates Air Force and/or Navy or
    Marine Corps close air support. When warfighting doctrine evolves, or
    when we discover through operational lessons learned that we need
    different emphasis in our training on interoperability tasks,
    conditions, standards, or participants, the Army aggressively seeks to
    update training at our major training centers. A good example is our
    initiative to adjust training conditions at centers to better replicate
    contemporary operational environments.
        The Army welcomes the work being done by the Joint Forces Command
    to ensure there are adequate venues for forces to train on joint and
    interoperability tasks and that such training offers proper realism.
    This emphasis will undoubtedly improve the realism and rigor of
    interoperability training conducted at Army major training centers.

                                     ______

                     Questions Submitted to Thomas E. White
                   Question Submitted by Senator Ted Stevens

                                INDUSTRIAL BASE

        Question. Secretary White, the decision not to modernize the
    Counterattack Corps affects not only the Army, but the industrial base
    as well. What steps do you plan to take to mitigate the adverse impact
    on the industrial base as a result of the lack of modernization funding
    in the fiscal year 2004 Army budget?
        Answer. Army Transformation required cancellation of certain
    programs to fund a variety of transformational initiatives to achieve
    greater war fighting capability over the long term. We assessed the
    risks to the industrial base from these program cancellations and,
    where we judged necessary, we have taken steps to mitigate adverse
    impacts. We saw two major risks to the industrial base as a result of
    the decision to not modernize the Counterattack Corps. Both of these
    risks involved maintaining viable armor system production capabilities
    at two production facilities: the Lima Army Tank Plant in Ohio and the
    United Defense combat vehicle production facility in York,
    Pennsylvania.
        The first risk involves the General Dynamics' combat vehicle
    fabrication capability at the Lima Army Tank Plant. We judged that risk
    as unacceptable since Lima initially had an insufficient workload to
    remain viable as a production facility for the fabrication of the
    Marine Corps' Advanced Amphibious Assault Vehicle and the Army's FCS
    ground vehicles. To mitigate this risk, the Army has restructured some
    programs and now has sufficient work to sustain Lima in active
    production until these new programs are brought into production.
        The second risk involved maintaining the United Defense's combat
    vehicle production facility in Pennsylvania. We recognize that this
    facility would also be a likely candidate to manufacture FCS ground
    vehicles in the future. We expect that the production facilities in
    Pennsylvania will remain viable and open through calendar year 2004
    because of a continuation of their current fiscal year 2003 Bradley
    upgrade work. With this expectation and acceptance of risk, we did not
    program fiscal year 2004 funding for Bradley upgrades to protect that
    portion of the industrial base.
        While we cannot guarantee additional work from support for fielded
    systems, foreign sales, and reprocessing vehicles from operations in
    Iraq, the Army is looking hard at workload projections after calendar
    year 2004 and identifying fiscal year 2005 options which might be
    needed to protect any United Defense combat vehicle fabrication
    capability determined essential for future production. Those options
    will consider United Defense work on development of manned FCS non-line
    of sight gun system, unmanned ground systems, foreign sales, and other
    new non-traditional business. All of the other industrial base risks
    from not funding the Counterattack Corps are judged acceptable.
        We expect fiscal year 2003 funding and other work to keep essential
    skills active through the end of calendar year 2004, given that final
    vehicle deliveries are scheduled for June 2005. The program funding for
    system sustainment and technical support will transition in fiscal year
    2006 from procurement to the Operation and Maintenance, Army account.
    We believe United Defense's engineering staff and the Army's own in-
    house staff will be able to sustain the vehicles made by United
    Defense.
        The shortage of Bradley upgrade funding is manageable, but there
    are two key issues we must address. The first issue is how we will fund
    the required technical support to the fielded fleet. For fiscal year
    2003, the Army will have to fund the technical support from operations
    and maintenance accounts. That will present a problem for us because we
    will be addressing not only peacetime requirements but also operational
    requirements associated with the global war on terrorism and operations
    in Iraq. Obviously, we will finance the highest priority operational
    requirements first and defer those which are lower priority. A second
    issue is whether key suppliers will abandon the supplier network as we
    reduce requirements. This is a continuing problem, and we will do more
    tradeoff analysis to support decisions, for example, to either
    stockpile components or find alternate suppliers.

                                     ______

                  Questions Submitted by Senator Thad Cochran

                            UNMANNED AERIAL VEHICLES

        Question. Unmanned Aerial Vehicles are proving to be extremely
    valuable to our operations. Are we moving fast enough to procure UAV
    systems that you believe are necessary to perform your missions?
        Answer. The Army is proud to achieve the goal of bringing the first
    Department of Defense UAV program into full-rate production in fiscal
    year 2003 in the Shadow 200 Tactical UAV. The Army is meeting
    deliveries associated with the fiscal year 2003 full-rate production
    contract and is on schedule to complete the procurement of 41 systems
    by fiscal year 2008 to meet the Army acquisition objective. We are
    actively fielding the Shadow UAV systems and their soldiers to the
    Army's divisions and Stryker Brigade Combat Teams. The Army is also
    stationing several additional Hunter UAV units at the corps level and
    as recently as November 2002, stationed its second Hunter company with
    the XVIII Airborne Corps. By the end of this year, a third Hunter
    company will be stationed with the V Corps in Germany. We anticipate
    that Army UAVs will experience a high operational tempo as a key system
    in any operations in Iraq.
        Enlisted soldiers trained at Fort Huachuca, Arizona, operate our
    UAVs. We approach UAV system acquisition as a total package to include
    training, logistics, system design and performance, science and
    technology transition, and life-cycle support. The Army budget for UAVs
    ranges as part of the DOD UAV budget from about 17 percent in fiscal
    year 2003 to an average of about 9 percent in fiscal year 2005-fiscal
    year 2009, demonstrating a highly efficient and productive use of DOD
    funds for UAVs. Use and demand for UAVs from combatant commanders,
    trainers, and soldiers continues to remain high on all counts.
        Question. Is the Army taking advantage of UAV work being undertaken
    by the other Services, such as the Navy's work on Fire Scout, which is
    based on a small, commercially available helicopter?
        Answer. The Navy's Fire Scout program is in the research and
    development phase of program maturity. Senior Army personnel have
    observed the demonstration flights and are encouraged by the system
    developments being undertaken this year, such as conversion of the
    rotor system. The Army is considering various rotor wing technologies
    to fill UAV roles. Programs ranging from the Defense Advanced Research
    Programs Agency A-160 Hummingbird and the unmanned combat armed
    rotorcraft programs, the Fire Scout, and the U.S. Coast Guard Eagle Eye
    tilt rotor system are some of the potential candidates.
        To further support inter-Service cooperation, the UAV program
    office is developing a cooperative development memorandum of
    understanding with the Navy and Air Force to share UAV program
    information. The prime contractor for the Fire Scout, Northrop-Grumman,
    is also the prime for the Global Hawk and the Army Hunter UAV system.
    As the Army is actively converting the Hunter ground control stations
    to the Army's standard production one-system ground control station in
    fiscal year 2003 and fiscal year 2004, a similar conversion for the
    Fire Scout should be affordable and feasible. AAI is the prime
    contractor for the Army's TUAV Shadow system, which entered full rate
    production in fiscal year 2003, and is the prime contractor for the
    USMC Pioneer Improvement Program.

                         OIL CLEANING/FILTERING SYSTEMS

        Question. It is my understanding that the Army changes oil in the
    engines of tanks, personnel carriers and helicopters at fixed
    intervals. There are documented cases of large-scale diesel equipment
    with over 1,000,000 miles of use on unchanged, but filtered, oil. Some
    state National Guard units and state transportation agencies have
    started to adopt this filter technology. Can you comment on the
    applications in the Army that might benefit from an oil cleaning and
    filtering system by Gulf Coast Filters of Gulfport, Mississippi, that
    reduces and may completely eliminate the need for oil changes?
        Answer. Gulf Coast Filters, Inc., has briefed the Army on their
    bypass filter system, and we are conducting a study at Camp Shelby on
    30 five-ton trucks belonging to the Mississippi National Guard. Gulf
    Coast has briefed that their system can reduce services by five fold
    and reduce maintenance failure by supplementing the primary filter and
    using a finer filtration capability. This fine filtration will reduce
    larger physical contaminants such as debris and dirt, but does not
    detect or reduce other contaminants such as fuel, coolant, and water,
    nor will it determine the status of the specified physical property of
    the oil such as viscosity and additives.
        Bypass filters do not detect the source of contamination or wear
    metals caught in the filter. The Army oil change policy eliminates the
    requirement for frequent oil changing based on hours/miles/calendar
    days as specified by many technical manuals and lubrication orders. The
    Army is interested in lubricants and what happens to them in extra
    filtration systems such as Gulf Coast Filters. We are monitoring the
    test at Camp Shelby to capture field data to continue our analysis.

                                     ______

                  Questions Submitted by Senator Arlen Specter

                                  FCS VEHICLES

        Question. Secretary White, the Army's FCS acquisition concept calls
    for competitive and complementary production capabilities of the two
    U.S. ground vehicle producers--General Dynamics and United Defense.
    Both companies are needed to meet the Army's schedule for fielding the
    manned ground variants of the Future Combat System (FCS).
        Preservation of United Defense to produce these vehicles is
    dependent upon whether or not fiscal year 2004 funding is provided to
    it. Currently, no production funding is requested for combat vehicles
    produced by UDLP. Without such funding, United Defense's production
    facilities will shut down two years before FCS low-rate initial
    production begins.
        According to recent press reports, the Under Secretary of Defense
    for Acquisition, Technology, and Logistics was quoted as saying, ``We
    must be able to protect at least two competent, cost-effective
    competitors on every weapon system we have. It's our job to ensure our
    industrial base supports that kind of philosophy.''
        Given this situation, how does the Army intend to ensure that
    United Defense is maintained as a competent, cost-effective competitor
    to General Dynamics as well as a co-producer of the FCS manned ground
    variants, given that almost none of the fiscal year 2004 budget request
    for combat vehicles will go to United Defense and the same is true in
    the out years?
        Answer. Army Transformation required cancellation of certain
    programs to fund a variety of transformational initiatives to achieve
    greater war fighting capability over the long term. We assessed the
    risks to the industrial base from these program cancellations and,
    where we judged necessary, we have taken steps to mitigate adverse
    impacts. We saw two major risks to the industrial base as a result of
    the decision to not modernize the Counterattack Corps. Both of these
    risks involved maintaining viable armor system production capabilities
    at two production facilities: the Lima Army Tank Plant at Lima, Ohio,
    and the United Defense combat vehicle production facility at York,
    Pennsylvania.
        The first risk involves the General Dynamics' combat vehicle
    fabrication capability at the Lima Army Tank Plant. We judged that risk
    as unacceptable since Lima initially had an insufficient workload to
    remain viable as a production facility for the fabrication of the
    Marine Corps' Advanced Amphibious Assault Vehicle and the Army's FCS
    ground vehicles. To mitigate this risk, the Army has restructured some
    programs and now has sufficient work to sustain Lima in active
    production until these new programs are brought into production.
        The second risk involved maintaining the United Defense's combat
    vehicle production facility in Pennsylvania. We recognize that this
    facility would also be a likely candidate to manufacture FCS ground
    vehicles in the future. We expect that the production facilities in
    Pennsylvania will remain viable and open through calendar year 2004
    because of a continuation of their current fiscal year 2003 Bradley
    upgrade work. With this expectation and acceptance of risk, we did not
    program fiscal year 2004 funding for Bradley upgrades to protect that
    portion of the industrial base.
        While we cannot guarantee additional work from support for fielded
    systems, foreign sales, and reprocessing vehicles from operations in
    Iraq, the Army is looking hard at workload projections after calendar
    year 2004 and identifying fiscal year 2005 options which might be
    needed to protect any United Defense combat vehicle fabrication
    capability determined essential for future production. Those options
    will consider United Defense work on development of manned FCS non-line
    of sight gun system, unmanned ground systems, foreign sales, and other
    new non-traditional business. All of the other industrial base risks
    from not funding the Counterattack Corps are judged acceptable.
        Question. If the Army intends to let United Defense shutter its
    combat vehicle manufacturing plant, how does it propose to cost-
    effectively support/upgrade the many vehicles manufactured by United
    Defense--Bradley Fighting Vehicles, tank recovery vehicles, self-
    propelled howitzers--that are forecast to be in the inventory for many
    years to come?
        Answer. We do not expect that United Defense will close its combat
    vehicle manufacturing plant. We expect fiscal year 2003 funding and
    other work to keep essential skills active through the end of calendar
    year 2004, given that final vehicle deliveries are scheduled for June
    2005.
        The program funding for Bradley system sustainment and technical
    support will transition in fiscal year 2006 from procurement to the
    Operation and Maintenance, Army account. We believe United Defense's
    engineering staff and the Army's own in-house staff will be able to
    sustain the vehicles made by United Defense.
        The shortage of Bradley upgrade funding is manageable, but there
    are two key issues we must address. The first issue is how we will fund
    the required technical support to the fielded fleet. For fiscal year
    2003, the Army will have to fund the technical support from operations
    and maintenance accounts. That will present a problem for us because we
    will be addressing not only peacetime requirements but operational
    requirements associated with the global war on terrorism and operations
    in Iraq. Obviously, we will finance the highest priority operational
    requirements first and defer those which are lower priority. A second
    issue is whether key suppliers will abandon the supplier network as we
    reduce requirements. This is a continuing problem, and we will do more
    tradeoff analysis to support decisions, for example, to either
    stockpile components or find alternate suppliers.
        Question. Doesn't it make sense to preserve United Defense's combat
    vehicle manufacturing capabilities when doing so would simultaneously
    meet equipment modernization requirements of the Army National Guard or
    maintain previously planned upgrades to an additional division of the
    heavy counterattack force?
        Answer. The Army recognizes the industrial base capability and
    contributions of both United Defense and government-owned depot
    facilities. In respect to United Defense, the Army recognizes the
    potential contribution that they could make in support of FCS
    production, projected to begin in the fiscal year 2007 timeframe. The
    Army leadership is currently considering a 3rd Armored Cavalry Regiment
    modernization strategy that encompasses both the Abrams Tank and
    Bradley Fighting Vehicles and intends to provide requested information
    to Congress as soon as possible. As a total force, the Army will
    continue to support Congressional funding focused on Army National
    Guard heavy force modernization.
        Question. Secretary White, in the Army's fiscal year 2004 Posture
    Statement, General Shinseki and yourself noted: ``In general, the Army
    increased funding for programs that are clearly transformational and
    support the Defense transformational goals, sustained funding for high
    priority systems that will transition to the Objective Force, and
    reduced funding for systems not essential to Army Transformation. The
    operational risk associated with the decreased funding for certain
    current programs is acceptable as long as we field Stryker Brigades on
    schedule and accelerate the fielding of the Objective Force for arrival
    this decade.''
        Given the Army's job to preserve competition in the industrial base
    and the risk to the FCS program costs if it is not, is the risk to the
    armored vehicle sector acceptable as long as the Army fields Stryker
    Brigades on schedule and accelerates the initial fielding of the
    Objective Force?
        Answer. The Army judges the risk acceptable. I have asked the Army
    to look hard at those workload projections for current producers and
    identify alternatives which might be needed to protect any combat
    vehicle fabrication capability we determine essential for future
    production. Those options will consider United Defense work on
    development of manned FCS non-line of sight gun system, unmanned ground
    systems, foreign sales, and other new non-traditional business. All of
    the other industrial base risks from not funding the Counterattack
    Corps are judged acceptable.

                       ARMY HERITAGE AND EDUCATION CENTER

        Question. Secretary White, in 2000 the Army leadership made a
    commitment to staff the Army Heritage and Education Center at Carlisle
    Barracks with 79 people when it was completed. In light of that
    commitment, the Cumberland County Commissioners granted 54 acres of
    land for the project and the Commonwealth of Pennsylvania provided $10
    million. At present, the facility is suffering because it is
    understaffed.
        What are the Army's plans for staffing the Army Heritage and
    Education Center?
        Answer. The Army Heritage and Education Center (AHEC) will move
    into their new facility in the spring/summer of fiscal year 2004. There
    is still much work to be done in the meantime. AHEC is hiring 21 new
    employees this year that will bring them up to 54. AHEC has funding for
    54 this year and fiscal year 2004. A U.S. Army Manpower Analysis Agency
    study recommended they hire 18 additional employees for fiscal year
    2004, which will give them 72. The study also recommend AHEC add two
    more positions in fiscal year 2005 and another five in fiscal year
    2006, which would bring AHEC to their recommended total of 79 staff
    members.

                                     ______

                Questions Submitted by Senator Pete V. Domenici

                    WHITE SANDS/THIRD WAVE OUTSOURCING PLAN

        Question. Mr. Secretary, I have reviewed your testimony regarding
    the Army's Third Wave initiative. And I strongly agree with your
    objective of seeking the best value for our taxpayers' dollar. We all
    want that. But I do have some questions about the process the Army has
    put in place to implement competitive outsourcing.
        First, it seems to me that determining what jobs are core and what
    jobs are non-core is a very difficult thing. Clearly, certain routine
    maintenance duties are not fundamental to the Army's warfighting
    mission. But other activities that are not part of the warfighting
    mission per se have a very close relationship to how the warfighter
    performs.
        For example, many of the engineers and skilled DOD personnel in the
    test and evaluation field provide critical performance data about the
    systems used on the battlefield. To me, this is clearly connected to
    warfighting.
        Would you provide your assessment of where test and evaluation
    activities fit into the Third Wave proposal?
        Answer. The test and evaluation function is exempt from the A-76
    competitive sourcing process. Congress has, in fact, in Section 802 of
    Public Law 96-107, 10 U.S. Code, Section 114, note, barred the use of
    A-76 procedures in connection with the obligation or expenditure of
    research, development, test or evaluation funds, except for the
    operation or support of installations or equipment used for research
    and development (including maintenance support of laboratories,
    operation and maintenance of test ranges, and maintenance of test
    aircraft and ships). OMB Circular A-76 incorporates this statutory
    restriction. These restrictions do not foreclose alternatives to the A-
    76 process, and such alternatives may merit further consideration in
    these functional areas. The Department will not pursue those
    alternatives, however, without consulting with Congress and seeking
    enabling legislation where appropriate. At this stage, the decision-
    making is still pre-decisional with regard to the test and evaluation
    function with regard to alternatives to A-76.
        Question. Has the Army completed its study of non-core functions
    that are to be exempted from outsourcing? If not, when will these
    exemptions be determined?
        Answer. The Army recently completed the exemption phase of its
    study of non-core functions that are to be exempted from outsourcing.
    The Assistant Secretary of the Army for Manpower and Reserve Affairs
    made 24 exemption decisions. The exemption decisions will be provided
    to the Defense oversight committees as soon as those meetings can be
    scheduled.
        Question. The issue of security is also very important. It is my
    understanding that security personnel and firefighters are exempted
    from the Third Wave plan by law. Can you confirm that guards and fire
    personnel will remain within DOD?
        Answer. Yes, security guards and firefighters are exempted from the
    Third Wave plan by law. Title 10, U.S. Code, Section 2465, generally
    requires government employees to perform security guard and firefighter
    functions at installations located in the United States unless the
    installation becomes a contractor-operated facility. The issue of
    adequate force protection, since 9/11, is a paramount concern. We
    appreciate the limited Congressional relief mitigating somewhat the
    restrictions of title 10, U.S. Code, Section 2465. Section 332 of the
    Bob Stump National Defense Authorization Act for Fiscal Year 2003,
    Public Law 107-314, provides a basis in some circumstances for
    arranging for performance by local municipalities of increased
    security-guard functions since September 11, 2001. The Department will
    comply with these statutes unless Congress provides further relief.

                                     ______

                   Questions Submitted by Senator Tom Harkin

                           IOWA ARMY AMMUNITION PLANT

        Question. The Iowa Army Ammunition Plant (IAAP) is currently
    undergoing cleanup as a Superfund site due mostly to contamination by
    high explosives from the ammunition. Secretary White, would the Defense
    Department proposals for changes to CERCLA and other environmental laws
    remove IAAP from the Superfund program? If not, please explain why IAAP
    would not be covered by the exemption. If so, please explain why it
    would be beneficial to IAAP and the surrounding community for the site
    to be removed from CERCLA protections.
        Answer. The Defense Department proposals for Readiness and Range
    Preservation would not remove IAAP from the Superfund program. DOD's
    Resource Conservation and Recovery Act (RCRA), and Comprehensive
    Environmental Response, Compensation, and Liabilities Act (CERCLA)
    legislative proposals clarify when RCRA and CERCLA apply at military
    ranges. IAAP is addressing contamination from ammunition assembling
    operations, which is distinct from military range activities.
        Question. The Army is currently conducting health studies of the
    workers and former workers at the IAAP site, alongside similar DOE
    studies of former workers at the nuclear weapons facility at the site.
        Please update me on the status of the studies, of the contracting
    the work, and of release of appropriated funds.
        Answer. In response to 2000 and 2001 legislation, DOD is
    identifying past and current IAAP DOD workers and notifying them of
    possible exposures. The workers have been provided DOD guidance to
    facilitate discussions with appropriate officials and health care
    providers. As directed, a health study of the IAAP workers has been
    developed. The U.S. Army Center for Health Promotion and Preventive
    Medicine (USACHPPM) has contracted with the College of Public Health at
    the University of Iowa (UI) to perform the study. As part of Phase I of
    the DOD study, UI has identified over 38,000 current and former IAAP
    workers. The health study protocol has received Human Subjects
    Institutional Review Board (IRB) approval from UI. In January 2003,
    USACHPPM received the revised health study protocol from UI. As part of
    USACHPPM's contract approval process, USACHPPM reviewed UI's health
    study protocol to ensure it is ethically and scientifically sound, and
    that the research complies with the Health Insurance Portability and
    Accountability Act (HIPAA). USACHPPM also arranged for peer review of
    the health study protocol by the Armed Forces Epidemiology Board and
    the DOE Central Beryllium IRB Committee. The final recommendations of
    the peer review groups are expected by the end of April 2003. USACHPPM
    will then share the recommendations with UI, and incorporate changes
    with the UI researchers. An additional $1 million of Congressional
    funds for fiscal year 2003 has been received by USACHPPM. Modifications
    to the existing contract are underway to incorporate this additional
    funding.
        Question. Congress directed that testing of workers for chronic
    beryllium disease be part of this study. Please update me on the status
    of and plans for conducting this testing.
        Answer. The DOD IAAP study will contain a complete exposure health
    history. Testing for chronic beryllium disease is complex and is under
    evaluation through additional expert peer review. Specific beryllium
    testing will be performed pending the recommendations of this expert
    review.

                              ROCK ISLAND ARSENAL

        Question. Industrial Mobilization Capacity (IMC, formerly UPC)
    funds are critical to the arsenals to pay for capacity that is
    maintained for national wartime requirements, not for current
    contracts, and thus to keep overhead rates reasonable. Last year
    Congress approved full funding of IMC, including $14.8 million for Rock
    Island Arsenal. Section 8109 of the Defense Appropriations bill did cut
    the working capital funds by 8 percent, but with the proviso ``that
    these reductions shall be applied proportionally to each budget
    activity, activity group, and subactivity group and each program,
    project, and activity within each appropriation account.'' Yet I
    understand that based on this cut, IMC funding for each of the arsenals
    was cut by more than 50 percent.
        Were the reductions in Section 8109 applied proportionally to each
    budget activity, activity group, and subactivity group and each
    program, project, and activity within each appropriation account? If
    not, please explain how the distribution of the cuts meets
    Congressional direction.
        Answer. Section 8109 of the conference report reduced the amount of
    the budget request by $400 million ``to reduce cost growth in
    information technology development.'' The report allocated $148.6
    million of the decrement to Defense Working Capital Fund (DWCF) and
    this reduction was enacted.
        The DWCF appropriation of $1,784.956 million was reduced by $148.6
    million. After protecting the Defense Commissary Agency ($969 million),
    the remaining reduction was spread to all activities. The Army's
    portion of the DWCF funding request was $316 million, which consisted
    of $89 million for war reserves, $100 million for spare parts
    augmentation, and $127 million for IMC funding. Army's share of the
    reduction was $67 million.
        It wasn't feasible for the Army to apply the reduction to the war
    reserves or to the spares augmentation. The war reserve funds had
    already been obligated, and the Army was already experiencing
    shortfalls in spares funding. The Army's only viable alternative was to
    take the reduction in the IMC requirement. The funding reduction was
    allocated pro rata to the IMC requirements of the eight ordnance and
    five depot maintenance activities.
        Question. Does the Army have any plans to restore the IMC funding
    for fiscal year 2003?
        Answer. The fiscal year 2003 DWCF included full funding for the IMC
    requirement, which was $119.7 million for the ordnance activities and
    $7.3 million for the depot maintenance activities. The DWCF
    appropriation was decremented $148 million, in the conference report
    (H.R. 107-732) for the Fiscal Year 2003 Defense Appropriations Act
    (Public Law 107-248, Title V). The Army's share, $67 million, was
    applied to the IMC funding. Given the competing demands for limited
    funds, it is unlikely the Army will be able to restore the reduction.
        The losses from this reduction could be recovered in future
    appropriations; otherwise, the loss will be recovered in the ordnance
    and depot maintenance customer rates for fiscal year 2005.
        Question. Can you ensure us that if Congress approves funding for
    IMC in fiscal year 2004, it will actually be used for that purpose?
        Answer. If Congress appropriates money to the Army Working Capital
    Fund in fiscal year 2004 for IMC, that money will be used for that
    purpose.

               GROUND SERVICES INDUSTRIAL ENTERPRISE (GSIE) PLAN

        Question. In recent weeks the arsenals have been moving to
    implement the GSIE plan to rationalize their workload and make them
    more efficient, while keeping them as part of the federal organic base.
    Yet at the same time they have been buffeted by a RAND study that
    reportedly recommended formation of a government corporation, by Third
    Wave plans for privatization, and of course by rumors about the
    impending base closure round. I am concerned that the GSIE initiative
    will not be given time to work before some other privatization or
    reorganization plan is approved. Do you plan to give the arsenals time
    to implement the GSIE plan without making other major changes that
    could interfere with that effort?
        Answer. Formation of the Ground Systems Industrial Enterprise has
    been approved, and the Army leadership will be updated regularly on the
    progress toward operating efficiently without the need for subsidies.
    We are also responding to the Office of the Secretary of Defense on
    this. We do not anticipate that any action will be taken to change the
    GSIE operating structure before the Army has had a chance to assess the
    progress towards this objective.

                        HIGH MOBILITY TRAILERS AND WASTE

        Question. One of the programs I have followed with great interest
    is the purchase of high mobility trailers for the humvees. After many
    years, these trailers have supposedly been fixed. How many of these
    trailers are now in use in the field? How many humvees have been
    modified to pull them?
        Answer. The High Mobility Trailer has been renamed the Light
    Tactical Trailer. Approximately 5,200 trailers have been fielded to
    date, and over 10,500 humvees have been modified to pull them.
        Question. Have there been any problems with the trailers that are
    in use?
        Answer. No. They are operating quite well, as we expected.
        Question. What are your current plans for purchase of additional
    trailers that I understand are still needed?
        Answer. The Army plans to procure 5,094 trailers beginning in
    fiscal year 2004 through fiscal year 2009. In fiscal year 2004, we plan
    to procure 576 for $9.5 million; in fiscal year 2005, 713 for $11.1
    million; in fiscal year 2006, 550 for $8.7 million; in fiscal year
    2007, 1,510 for $22.1 million; in fiscal year 2008, 888 for $13.7
    million; and in fiscal year 2009, 857 for $13.5 million. The contract
    will be a competitive, firm fixed-price contract. The fiscal year 2004
    contract is scheduled for award in March 2004.

                              SUBCOMMITTEE RECESS

        Senator Inouye. And I would like to thank you on behalf of
    all of us for your appearance this morning, and thank you for
    your testimony, and General Shinseki, I think everyone here
    expressed the sentiment that I would say is felt by the Senate.
    We thank you for your service, sir.
        General Shinseki. Thank you, Senator. Obviously, without
    saying, the service in this position has been the high point of
    anyone's service in uniform, but along with that, working with
    the members of this committee and patriots in the Congress on
    other committees has certainly been a very special privilege
    for this soldier, and I thank you all for your support.
        Senator Inouye. In a few weeks I hope to travel to Hawaii,
    where we will have the 60th anniversary of the formation of my
    combat team, the one that I served in, made up of Japanese
    Americans, and I can assure you that the men in the regiment
    are very proud of you, sir.
        General Shinseki. Thank you, sir.
        Senator Inouye. Our next hearing of the Defense
    Subcommittee is scheduled for Wednesday, March 26, at 10 a.m.
    in Dirksen 192. With that, the hearing is recessed. Thank you
    very much.
        Mr. White. Thank you, sir.
        [Whereupon, at 11:43 a.m., Wednesday, March 19, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    March 26.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                           WEDNESDAY, MARCH 26, 2003

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

                             DEPARTMENT OF DEFENSE

                          Department of the Air Force

    STATEMENT OF HON. JAMES G. ROCHE, SECRETARY OF THE AIR
                FORCE
    ACCOMPANIED BY GENERAL JOHN P. JUMPER, AIR FORCE, CHIEF OF STAFF

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Secretary Roche, General Jumper, truly the
    eyes of the world are upon you, and we have witnessed with awe
    the professionalism of the Air Force and the planning that you
    have done. All Americans I think are very proud of you; some
    may disagree with the decision to go there, but I don't think
    there is anyone that is not proud of our men and women in
    uniform and those working with them in civilian life in the
    Department of Defense.
        These combat missions in Iraq are really telling an amazing
    story of the times that you and your predecessors have been
    before this committee asking for taxpayers' money to make
    certain that you had the type of equipment that you could use
    if and when the Commander in Chief asked you to perform the
    duties that you are now performing.
        I think the whole country is proud of you as I've said, but
    I think we are very proud that you are where you are now,
    because we know you all and we've worked with you and we know
    that you really have in mind the safety of those men and women
    that are under your command.
        We now begin the review of the fiscal year 2004 budget,
    that's what we're talking about today. There is now pending
    before us a supplemental request for fiscal year 2003 for the
    operations in Iraq and the war on terrorism. That will not be
    the subject of the discussion here today. We do believe that
    the missions that you are performing today might change this
    budget as we go down the line, as far as what's needed in
    fiscal year 2004, and we will listen respectfully to any
    changes that you might wish to make now or later in your fiscal
    year 2004 request.
        We personally look forward, I do, to hearing your
    statements today and knowing the priorities in the budget
    request for fiscal year 2004. I do expect and hope we will hear
    your urgent plea for action on the supplemental, which I hope
    to get passed before we leave on the Easter recess. And as you
    may know, I have made the statement to our Commander in Chief
    that if we don't finish by the time for our recess, I don't
    think we should leave Washington until we do finish the
    supplemental. It's that important, I believe, to the men and
    women wearing our uniform around the world.
        We will make your statements part of the record in full, I
    look forward to your statements today, and before you proceed,
    let me call on my good friend from Hawaii, my co-chairman.
        Senator Inouye. I want to thank you very much, Mr.
    Chairman. Mr. Secretary, General Jumper, I join my chairman in
    welcoming you once again to testify before this committee.
        Let me join my chairman in saying how proud and supportive
    we are of the work done by the men and women of the Air Force
    in support of the global war on terrorism and the current
    mission in Iraq. I can join my chairman in assuring you that
    this committee will do all it can to support the Department's
    effort.
        Senator Stevens. Senator Burns, do you have a statement?

                       STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. Mr. Chairman, I just want to echo our
    feelings, I think I, along with the rest of my colleagues and
    you, try to offer our men and women who are wearing the uniform
    right now, especially the Air Force, not only have the training
    and the equipment to complete the mission that we have, and
    also get them home safely. We are very supportive of your
    organization, your leadership, and of course the role that all
    people are playing right now who wear the uniform of this
    country and believe in the same precepts that we do.
        Mr. Chairman, thank you very much.
        Senator Stevens. Senator Dorgan.

                      STATEMENT OF SENATOR BYRON L. DORGAN

        Senator Dorgan. Mr. Chairman, let me echo the comments you
    have made and my other two colleagues, Mr. Secretary, and
    especially to the men and women who serve under you for your
    service to our country. I'm going to have to go to the floor of
    the Senate for about 15 to 20 minutes at 10:30, but I want to
    come back. I do have a series of questions I want to ask. And
    again, it's always a great opportunity to hear from General
    Jumper, and thank you for your service.
        Senator Stevens. Let me remind the committee that we have
    these high tech microphones now, and you have to push the
    button, but the light shows underneath it rather than on top.
    Be sure you turn it on when you're going to speak.
        Secretary Roche, we should all have a moment of silent
    prayer for the souls of those who have already lost their lives
    in this endeavor, and I do hope you will agree that we should
    just stand here in a moment of silence before we begin this
    testimony.
        Secretary Roche. I would be honored, Mr. Chairman.
        [A moment of silence was observed.]
        Senator Stevens. Thank you very much.
        Those visions on the television bring back memories to
    Senator Inouye and myself, and I think others on this
    committee, so we do welcome you today and look forward to your
    testimony.
        Secretary Roche. Thank you very much, Mr. Chairman. I think
    I've got the button pushed correctly and it's working.
        Thank you, sir, and thank you, Senator Inouye and members
    of the committee for this opportunity. It is my great honor to
    join my colleague General John Jumper today, to represent the
    700,000 active, guard, reserve and civilian airmen who are
    engaged in defending our nation and serving our interests
    around the globe. We are very proud of their honorable service
    and unshakable dedication, from combat operations and homeland
    defense to the daily efforts that guarantee the readiness,
    health, security and morale of our force.
        In our travels around the Air Force, as you have traveled
    around to many of our bases, we have been impressed and humbled
    by the creativity of our airmen, their commitment and their
    professionalism.
        As we appear before you today, we have close to 50,000
    airmen serving at some 50 expeditionary bases in more than 35
    countries, plus another 60,000 airmen currently assigned
    overseas. We have over 43,000 airmen in the area of operations
    as of today. They are fighting the war on terrorism and
    defending our Nation's interests even as we speak.

                            OPERATION IRAQI FREEDOM

        In Operation Iraqi Freedom, the Air Force has fully
    integrated into a joint and coalition force conducting combat
    operations in support of our strategic and campaign objectives.
    The combined forces' air component commander, Air Force
    Lieutenant General Buzz Moseley, who many of you in the Senate
    know, commands almost 2,000 Air Force, Navy, Marine Corps and
    coalition aircraft in a single combined air operation center in
    Southwest Asia.

                                   AIR POWER

        The air picture in this operation center shows the dense
    presence of air power over the entire country of Iraq. If we
    could have a camera looking down from far far overhead, with a
    blue dot for every American airplane over Iraq, I think you
    would be pleased to see the incredible coverage of air power
    over that country supporting the forces on the ground and
    supporting key objectives. We are targeting the Iraqi regime,
    Saddam's command and control systems, weapons of mass
    destruction, security apparatus in the regular forces, who have
    often used brutal oppression and treachery to sustain the
    regime, and the Iraqi military forces engaged against our
    marines, soldiers and airmen on the ground.
        Our first and parallel campaign, to support the suppression
    of enemy air defenses, Scud hunting, and information operations
    have and will continue to enable the maneuver of maritime and
    special operations forces to operate under the umbrella of air
    dominance throughout the theater.
        Our extended preparation of battle space since last summer,
    consisting of nearly 4,000 combat sorties and year of planning
    has resulted in unprecedented flexibility in achieving decisive
    effects. The 10 years that we've been in Operation Northern
    Watch and Operation Southern Watch have provided us with crews,
    about 70 to 75 percent of whom are combat experienced as they
    enter into this conflict.
        Mr. Chairman, I would like to note that to date, the Iraqi
    Air Force has not flown a single sortie against coalition
    forces or the Iraqi people. This is airspace dominance. This is
    what General Jumper has been working on for his whole life,
    this is what he promised, and we are delivering. This is what
    we pledged to deliver to our combatant commanders and to our
    Nation, should the President call upon us to do so. Mr.
    Chairman, you are quite right, they have performed superbly,
    along with their colleagues on the ground and at sea.

                                 TRANSFORMATION

        As we prepare for future uncertainty, we fully support the
    Department's continuing efforts to balance near-term readiness
    and operational requirements with long-term transformation of
    our Armed Forces. Our challenge is to fight the global war on
    terrorism while simultaneously transforming, and we must do
    both.
        Now while we face near-term budget pressures, we
    nevertheless must invest for the future. Otherwise, we may be
    forced to pay more later in dollars and perhaps even in lives.
    Of utmost importance to us is our continued focus on
    warfighting and delivering a full spectrum of air and space
    capabilities to combatant commanders. Through the efforts of
    this committee, your colleagues in the Congress, and Secretary
    Rumsfeld, I am proud to report that we are currently meeting
    these objectives.

                                HOMELAND DEFENSE

        We have some good news to report on calendar year 2002, Mr.
    Chairman. It was a year of challenging operations. In calendar
    year 2002 we continued our expanded homeland defense mission,
    providing 25,000 fighter, tanker and airborne warning sorties.
    This was made possible only through the mobilization of over
    30,000 airmen in the Air Force Reserve and Air National Guard.
    They have conducted over 75 percent of all the Noble Eagle
    missions and they have done it superbly.
        Today we continue this effort, in fact it's a heightened
    effort, with more than 200 military aircraft dedicated to
    providing combat air patrols, for on-call support to high risk
    areas, cities and key facilities in the United States. In
    Operation Enduring Freedom, we made joint operations on a
    landlocked nation possible. We flew more than 40,000 sorties,
    over 70 percent of the coalition air operations, in 2002 alone,
    and of our 8,000 refueling missions we are proud to point out
    that 55 percent were to Navy and Marine Corps, and coalition
    aircraft.

                                  AFGHANISTAN

        In Afghanistan, our special operations teams developed new
    ways to bring air and space power to bear in a variety of
    engagements. Our combat controllers integrated new technologies
    and precision weapons to do close air support from 39,000 feet,
    using B-1 and B-52 bombers, and at lower altitudes for our Air
    Force, Navy and Marine Corps fighter bombers. And we're now
    developing better processes to target and engage time-critical
    moving targets.

                                      IRAQ

        Yesterday, Mr. Chairman, we flew 648 Air Force missions in
    Iraq, over Iraq. Our colleagues in the Navy and Marine Corps
    also flew many hundred missions. To date, in the last 5 days of
    this conflict, sir, we have flown over 4,800 sorties over Iraq.
    That includes bombers, fighters, our Combat Search and Rescue
    (CSAR) and special operators, and our Command, Control,
    Intelligence Surveillance and Reconnaissance (C\2\ISR), as well
    as tankers and cargo aircraft. So we have been working quite
    hard.

                                      B-1

        Continuous improvements in readiness and technology made
    these successes possible. With your support we successfully
    consolidated our B-1 bomber fleet and improved overall
    readiness. Its mission-capable rate was up 10 percent last year
    and is now over 71 percent, the highest in history, and we are
    proud to point out, Mr. Chairman, that the B-1 has flown over
    Baghdad with 24 weapons on each sortie, 24 highly precise
    weapons on each sortie.

                                      C-5

        The increases funded by this committee and the Congress
    that you have supported is paying off well. Sixteen of 20
    weapons systems improved mission-capable rates last year. The
    C-5B achieved its highest mission-capable rate since 1994, it's
    now at 73 percent. The B-2 improved over 50 percent.

                             A-10 AND F-15 AIRCRAFT

        The A-10, a workhorse working with our Army ground forces
    right now, is up 8 percent, and our F-15s are up over 5
    percent. These are the best mission-capable rates we have
    experienced in 5 years and the best annual increases we've
    achieved since the mid-1980s.
        Mr. Chairman, while we are making great progress in
    adapting the Air Force, we face many challenges to our
    continued superiority as you are well aware. The increasing
    proliferation of advanced surface-to-air missile systems
    threatens our ability to gain and maintain air superiority in
    potential conflicts. Manned portable surface-to-air missiles
    have proliferated extensively, and in fact new ballistic
    missile and cruise missile technologies are spreading.

                                 RUSSIAN SU-37

        An advanced fighter has already been produced, specifically
    the Russian SU-37, that is superior to our best fighter, a
    prototype that has not yet been explored.
        We are also now facing the undeniable reality that other
    nations are investing in American military technologies and
    fielding the best our aerospace industry has to offer in their
    air forces. While the investment of our good friends and allies
    is a great value to our alliances and industrial base, superior
    capabilities are now or shortly will be present in American-
    produced airplanes that don't fly the American flag. And I
    remind you, sir, that in the late 1930s, the aerospace industry
    of America, 38 percent of its sales were overseas sales,
    because they did not have enough of a market here in the United
    States, and some of the best technology was in fact being
    exported to other countries in the late 1930s, and some of that
    technology, regrettably, we had to face in combat.

                                 AGING AIRCRAFT

        Now while other nations are modernizing, we continue to
    employ aging systems that are becoming more difficult to
    operate and more expensive to maintain. The average age of the
    operational Air Force fleet is over 22 years per aircraft. Even
    with planned aircraft procurements, the total fleet average age
    is expected to increase to 27 years by the year 2020.
        We benchmark this by noting how many of existing aircraft
    that are flying, Mr. Chairman, were flying prior to my being
    commissioned as an Ensign in the United States Navy, or prior
    to General Jumper being commissioned a Second Lieutenant in the
    United States Air Force. And you should know, all of our tanker
    aircraft that are flying today were flying before General
    Jumper was commissioned a Second Lieutenant, and a goodly
    number of the E models were flying when I was commissioned an
    Ensign. I'm old, but these planes are older.
        In the way ahead, our proposed fiscal year 2004 budget
    addresses a number of our challenges and supports the
    Department's priorities. It accelerates our modernization and
    joint capabilities and maintains the gains in readiness and
    people programs that we achieved last year. Most importantly,
    it gets money into our procurement programs and funds essential
    capabilities our warfighters need.
        I strongly request that you support these major programs so
    that we can get our costs out and we can get reliability up.

                                    MANPOWER

        Our number one investment priority remains our people. The
    budget fully supports our authorized total force end strength,
    funds our education and force development initiatives, puts us
    on track to eliminate inadequate housing, and reduces out-of-
    pocket housing expenses on schedule with Secretary Rumsfeld's
    objectives.
        We appreciate your continued support of pay raises for our
    uniformed and civilian airmen, and they truly, truly appreciate
    the way this has been done, with the disproportionate amounts
    going to our most senior enlisted.

                                   READINESS

        Our readiness budget increases by 6 percent. It funds an
    expanded $6 billion flying hours program, and sustains the
    positive trends we've achieved in our readiness rates.
        Our proposal increases our infrastructure investment
    compared to the fiscal year 2003 requested level and keeps us
    on track to meet the Department's goal of a 67 year
    recapitalization rate by fiscal year 2008.

                                     F/A-22

        Finally, I'm proud to report our proposed budget increases
    investment in new technologies by 5 percent over last year.
    Next year we will fund 20 F/A-22s with new crew, continuing our
    move to sustained production rate. The program is improving and
    the Raptor is currently meeting or exceeding all key
    performance related requirements. We have a structure to do
    upgrade spirals to focus on developing systems with inherent
    air-to-ground capabilities, and have recently delivered our
    initial production aircraft to Nellis Air Force Base.
        Now we are experiencing some difficulties with the new
    program, and this is one that is dramatically dependent on
    software, one of the greatest advances in aviation in our
    history. The software integration and test is an issue that we
    are battling through. Mr. Chairman, General Jumper and I
    personally got involved in this program in July of last year,
    and in the course of those 8 months we have airplanes now
    either being delivered on time or early. We have taken care of
    all foreign object damage production techniques that were
    happening with the contractor, we have fixed the problem of fin
    buffet, we are making test forms across the board, both in
    terms of flying test points, logistic test points.
        We have basically narrowed down what needs to be done to
    push this aircraft through to completion, and the software
    stability is something we're working on very, very hard. It
    represents the classic challenge of transitioning from
    development to production, and when something is this software-
    dependent, it is very difficult to bring everything together,
    and then when we bring it together, we try and make it work.
        What is different about the program, Mr. Chairman, is we
    now have a more realistic cost-estimating regime and a far
    better management team in place to anticipate the likely
    challenges we will face.
        We remain committed to our F/A-22 buy-to-budget strategy,
    and will maximize the number of aircraft we procure within the
    pre-established budget caps. This serves as an insurance policy
    for the taxpayer and an incentive for the Air Force and our
    industry suppliers to get it done right. With your support, we
    will continue to deliver the only operational system we will
    field this decade that puts iron on the enemy.
        And if I may add, Mr. Chairman, we are dedicated to
    bringing the system on line because it will alter how we fight.
    If we can't, John Jumper and I will be the first to recommend
    to Secretary Rumsfeld that this program be terminated. We ask
    you to give us a chance to deliver the system, a system about
    which you would be very proud, a system that will parallel the
    C-17, a program that almost died, almost died, and almost died,
    and is now being the absolute workhorse of this battle.
        More cuts and restrictions at this juncture will only
    increase inefficiencies and costs. We need a blessed year or
    two of stability to be able to bring this home.
        Mr. Chairman, we are also working with Secretary Rumsfeld
    and our colleagues to implement a range of sensible management
    practices that we believe will help minimize obstacles to a
    path of effective future administration of the Department. In
    particular, we are looking at measures to transform our
    personnel, acquisition, administrative and range management
    practices.

                          SUPPLEMENTAL APPROPRIATIONS

        And yes, Mr. Chairman, we absolutely support your point on
    the supplemental. Sixty two point some billion dollars is
    something that we can't take out of hide, clearly. We see
    ourselves going broke sometime in the early summer. We believe
    that this is a reasonable estimate of what we need to go
    forward, and we certainly agree with you that having the
    supplemental dealt with by Easter would be a dramatic boon to
    our forces because we would be able to deal with the problem
    that we have been cash flowing expenditures because of the war,
    leaving us with a number of gaps, and adjusting those gaps with
    a supplemental would be a major issue.
        We thank you for the investments you've made in our future,
    for the trust that you have placed in our concerted effort to
    provide America with aerospace dominance.
        Mr. Chairman, if I may, it is my distinct pleasure to come
    to work every day and work with the finest colleague I have
    ever worked with, John Jumper. Thank you.
        Senator Stevens. General Jumper.
        General Jumper. Thank you, Mr. Chairman, Senator Inouye, it
    is a pleasure to be before this distinguished committee again
    this year and to be able to talk about our great United States
    Air Force. And your airmen, Mr. Chairman, are proud to stand
    beside the soldiers, sailors and marines engaged in the
    conflict that commands all of our attention today.
        Let me add also what a pleasure it is for our United States
    Air Force to have this veteran sailor who sits beside me here
    today, a graduate of the United States Navy after 23 years and
    a commander of a ship, it's a pleasure to have someone who
    brings command responsibility and the understanding of command
    and warfare to our United States Air Force. He has graduated
    from an ancient mariner to an elder airman, and he has made
    that transition very well, sir, and I am very proud to serve
    with him.

                             MISSION CAPABLE RATES

        Sir, I would say in the present operations, we are seeing
    mission-capable rates on our platforms over there between 80
    and 90 percent. This has been enabled by the attention this
    committee has paid over the last few years to get the parts and
    the assets to the people out there who fix these airplanes.

                                      C-17

        The secondary effect is the effect it has on retention and
    recruiting. When you get the part to the airman on the flight
    line to fix the airplane, you have just given that airman our
    vote that we care about what he does, and that translates
    directly into retention rates and we are enjoying some of the
    highest retention rates in the Air Force that we've seen for a
    very long time for our experienced airmen. So, I thank you for
    all the attention over the years you have paid to that and as
    the Secretary pointed out, the C-17 example, we have seen that
    great program mature into an aircraft that we just could not do
    without in this current conflict.
        We have also seen support from this committee on a new
    series of weapons like the Joint Direct Attack Munitions
    (JDAM), and I'm happy to report that having found the Global
    Positioning System (GPS) jammers in and around Baghdad, we were
    able to take those jammers out with GPS-aided bombs, the JDAM,
    the very bomb the jammer was designed to defeat, because it was
    such a great weapon.

                             OPERATION NOBLE EAGLE

        As the Secretary pointed out, we don't do this alone. In
    Operation Noble Eagle, over 80 percent of the effort that goes
    in to patrolling the skies over America is done by our National
    Guard and Reserve. Although today we have the 388th Fighter
    Wing from Hill Air Force Base flying Combat Air Patrols (CAPs)
    as we speak over Washington D.C., over 80 percent of those on a
    day-to-day basis are performed by the Guard and Reserve, and
    most of those over the United States today are in fact done by
    the Guard and Reserve.

                                     KC-135

        As my boss pointed out, we're also dealing with the effects
    of an aging force and all you have to do is go out to Tinker
    Air Force Base and see the corrosion that is eating away at our
    KC-135 fleet to be convinced that you cannot fly airplanes
    forever. And we will continue to try to do our best to replace
    the worst of those airplanes as soon as we can.

                                     F/A-22

        I would also add, sir, to my boss's description of the F/A-
    22, in addition to the data he has provided, we also have
    talked to the pilots on a day-to-day basis, and the pilots who
    are out flying the airplane come back with stories of the most
    magnificent increase in combat capability that they have
    imagined. The airplane is performing superbly all of the things
    that we need the most, the super cruise, the stealth qualities,
    and as the boss pointed out, we still have to work on the
    software integration problem, but we have devoted our full
    attention to this, the Secretary and I, and we see a way
    through this. And again, I add my plea for program stability as
    we go into the future.
        There are many other things that are transformational that
    are ongoing with regard to space and other weapons developments
    that we're excited about, but the thing that we're most excited
    about is our people. And you all get to travel around, you get
    to see our people in action out there on the flight lines and
    in operation, and I think we can all be very proud of the young
    Americans we're putting out there.

                            LACKLAND AIR FORCE BASE

        One of the things I like to do is go to Lackland Air Force
    Base on Fridays. Every Friday we bring in a thousand new airmen
    into our Air Force, and they parade by and it's a wonderful
    ceremony. But a fun thing to do is to go sit in a dark corner
    somewhere and watch the youngsters get back with their parents
    after their parents haven't seen them for several weeks. And if
    you look hard enough, after every ceremony, you will see some
    young airman standing in front of his or her mother or father
    saying yes, mom, it is me, because the parents don't even
    recognize the kid they dropped off just a few short weeks ago.
    And the dad's standing back saying this ain't my kid, this kid
    is standing up straight, saying ma'am and sir, but it is.

                                 SOUTHWEST ASIA

        And you go out there and you see them in action. I was
    recently at a base in Southwest Asia and I was approached by a
    young captain combat engineer with his chief master sergeant,
    who came up and saluted, and said, sir, I'm building this
    runway. And he's over there building a runway, not a minor
    project by any standard. And he says, sir, I started this
    runway a while ago, they're trying to send me home in a couple
    of weeks because I'm due to rotate. I'm here to tell you, the
    chief and I are here to tell you that we're not leaving until
    this runway is done, this is my runway. And that's the way they
    feel and operate, and we see it out there all the time. It is
    something for us all to be proud of.
        I love to talk to World War II veterans, you all know this,
    but some of them don't know that this generation when properly
    motivated are every bit as dedicated and patriotic as any
    generation that ever served, and I'm proud to be a part of
    that.

                               AIR FORCE ACADEMY

        Finally, Mr. Chairman, let me just make one note about the
    United States (U.S.) Air Force Academy. The Secretary and I
    have devoted personal attention--you notice that there have
    been no spokesmen on this issue. This is an issue we're taking
    on personally. Your constituents out there who come to you and
    ask for nominations to the United States Air Force Academy need
    to know that it's a safe place to go, that it's a place where
    we devote our full energy to developing officers of high
    character and high moral standards.

                               PREPARED STATEMENT

        We will implement a set of corrections at the Air Force
    Academy that will return us to those high standards, and again,
    the Secretary and I will personally oversee their
    implementation and returning the United States Air Force
    Academy to the superb institution that it really is.
        Thank you, Mr. Chairman, I look forward to your questions.
        [The statement follows:]
        Prepared Statement of James G. Roche and General John P. Jumper
        Mr. Chairman and members of the committee, the Air Force has an
    unlimited horizon for air and space capabilities. Our Service was borne
    of innovation, and we remain focused on identifying and developing the
    concepts of operations, advanced technologies, and integrated
    operations required to provide the joint force with unprecedented
    capabilities and to remain the world's dominant air and space force.
        The Wright brothers' historic flight in 1903 ushered in the dawn of
    a dramatic era of scientific, cultural, and technological advances. As
    the Air Force celebrates this centennial of powered flight, we do so
    with the recognition that, despite the daunting challenges of a more
    dynamic security environment, the next hundred years will witness
    equally fantastic achievements. The 2003 Air Force Posture Statement
    reflects this optimism. In this report, we relate some of our
    accomplishments of 2002 as well as our vision of an innovative and
    adaptive force capable of guaranteeing American air and space dominance
    for the decades to come. Our successes are America's successes; they
    are the direct result of the selfless and unconditional service by men
    and women of the Total Air Force and their families.
        During the past year, and in the midst of combat and a variety of
    contingency operations, we evaluated, implemented, and validated a host
    of technological advances, organizational changes, and concepts of
    operations. These enabled us to deliver desired effects faster and with
    greater precision than at any time in the history of warfare. Such
    adaptation is characteristic of our Service, as airmen continually
    strive to push innovation ever forward en route to unprecedented air
    and space capabilities for combatant commanders, the joint force, and
    our Nation. In the year ahead, we will move our expeditionary Air Force
    closer to realizing the transformational imperatives of this new era,
    machine-to-machine digital integration of manned, unmanned and space
    assets, and joint command and control. Our concepts of operations
    leverage this integration, and expand our asymmetric advantages in air
    and space--advantages that are fundamental to defending America's
    interests, assuring our allies and coalition partners, and winning the
    Nation's wars.
        We recognize the responsibility for America's security is not one
    we shoulder alone. We work tirelessly toward developing and training
    professional airmen, transitioning new technologies into warfighting,
    and integrating the capabilities of our sister services, other
    government agencies, and those of our friends abroad to act in the most
    efficient and effective manner across all operations--from humanitarian
    to combat missions. At the same time, we pay special attention to the
    consolidating aerospace industry, our acquisition processes, and our
    critical modernization challenges, to ensure we will be able to draw
    upon our core competencies for decades to come.
        Blessed with full endorsement from the American people, the
    Congress, and the President, we will remain the world's dominant Air
    Force. We are honored to serve with America's airmen, and we sincerely
    appreciate the confidence in our commitment and capability to provide
    our great nation with superiority in air and space.

                                  INTRODUCTION

        As America approaches the 100th anniversary of powered flight, the
    Air Force realizes that the nation is only in the adolescence of air
    and space capabilities. Yet we envision a future that will manifest
    dramatic advances in propulsion, operational employment, weapons
    systems, information technology, education, and training for our air
    and space forces. It is a future of unprecedented, seamless integration
    of air and space capabilities with joint command and control at the
    operational level of war, and machine-to-machine integration at the
    tactical level. We are pursuing these changes--some elementary, others
    revolutionary--which will dramatically escalate the capabilities
    available to the joint forces of the United States, perpetuate American
    air and space dominance, and redefine the nature of warfare.
        If there was any ambiguity about the nature of the security
    environment in this new century, the attacks of September 11, 2001
    crystallized the setting. Just as the turmoil of the previous decade
    eluded prediction, the dynamic setting of the decades ahead poses even
    greater predictive challenges as centers of power and sources of
    conflict migrate from traditional origins. No longer will it suffice to
    prepare for real and perceived threats from nation-states. Instead,
    America must apply the sum of our operational experiences and
    experimentation to develop dynamic, flexible, and adaptable forces,
    capable of dissuading, deterring, and defeating a much wider range of
    potential adversaries, while still assuring our friends and allies.
        This fluid setting underscores the need for doctrinal agility, and
    expeditious and responsive acquisition, planning, and execution across
    the spectrum of capabilities in support of homeland security--from the
    most difficult anti-access scenario to humanitarian relief. As new
    generations of technology proliferate among potential adversaries, we
    also are reminded of the need to keep pushing technology forward. In
    less than one hundred years, we elevated from a Kitty Hawk biplane
    flying 100 feet on a 12-second flight, to a host of sophisticated,
    stealthy aerial vehicles capable of reaching any place in the world,
    and an array of satellites that circle the globe continuously. We do
    not rest on these achievements, but instead engage a new generation of
    innovation. Therefore, our mission is to make calculated research,
    development, and procurement decisions with the resolve to integrate
    all of our combat, information, and support systems into an enterprise
    architecture that contributes joint air and space capabilities to help
    win the Nation's wars.
        Meeting these requirements also warrants our continued
    transformation into an expeditionary force with the culture,
    composition, and capabilities to fulfill our evolving operational
    tasks. As the scope of global contingencies requiring American
    involvement has multiplied, we have witnessed the substantial value of
    agility, rapid response, and integration. Thus, we are becoming ever
    more responsive in time, technology, and training, and in the process,
    we are elevating Air Force contributions to joint capabilities, while
    developing our airmen as joint warfighters.
        A year ago, Secretary Rumsfeld laid out a number of key priorities
    for the Department of Defense (DOD). All of these--from pursuing the
    global war on terrorism and strengthening joint warfighting
    capabilities, to streamlining the DOD processes and improving
    interagency integration--demand across-the-board changes in the way the
    Defense Department operates. The Air Force has taken advantage of this
    opportunity to evaluate and strengthen our capabilities, and to
    fundamentally drive our investment strategy.
        As we contemplate more than a decade of unprecedented success using
    air and space power, we recognize that we never fight alone. The
    emerging interdependence of joint, coalition, and alliance partnerships
    throughout a decade of contingency warfare has been a profound lesson
    learned. Through cooperative planning, we will realize the full
    potential of our Service--bringing to bear fully integrated air and
    space capabilities.
        It is our imperative to approach this planning and integration with
    innovation and vision, fundamentally focused on capabilities. All of
    the armed forces are focusing on meeting the Quadrennial Defense
    Review's ``1-4-2-1'' force-shaping construct, by defining the
    fundamental capabilities required to meet the challenges of a changing
    world. These are: to defend the United States through Homeland
    Security; to deter aggression and coercion in the four critical regions
    of Europe, Northeast Asia, Southwest Asia and the Asian littorals; to
    swiftly defeat aggression in overlapping major conflicts while being
    capable of decisive victory in one of those conflicts; and to conduct a
    number of smaller scale contingencies. A revitalized, capabilities-
    focused approach to operational military requirements will allow us to
    meet these missions.
        Our focus on capabilities for an uncertain future has inspired us
    to adapt a new the way we organize, train, and equip our forces. We
    have begun by developing Task Force Concepts of Operations (TF CONOPS),
    which will define how we will fight and integrate our air and space
    capabilities with joint, coalition, and alliance forces. The
    requirements that emerge from these operational concepts will guide a
    reformed acquisition process that will include more active, continuous
    partnerships among requirement, development, operational, test, and
    industry communities working side-by-side at the program level.
        This process can only be successful with the help of a vibrant
    defense industry. Yet today the aerospace industry is consolidating to
    a point that threatens to diminish the advantages of competition. This,
    in turn, can lead to loss of innovation, diminished technical skill
    base, lower cost efficiencies, and other challenges. We must foster
    increased competition to ensure the long-term health of an industrial
    sector critical to our national security. While the Air Force will
    continue to advance the vision and associated capabilities for air and
    space, we also must challenge industry in order for it to stay on the
    cutting edge of technology and efficient management practices.
        Finally, transforming our force will not be possible without a
    process to educate, train, and offer experience to the right mix of
    Active Duty, Air National Guard, Air Force Reserve, and civilian airmen
    who understand the nature of our changing security environment. To
    achieve this, we will evolve what we have traditionally called the
    ``personnel'' function in new ways so as to blend Professional Military
    Education, advanced academic degrees, and assignment policies under the
    auspices of ``Force Development.''
        This is the United States Air Force in 2003--inherently innovative,
    tirelessly dedicated, and comprised of the very best airmen and
    capabilities in the world to ensure American security and defend her
    interests. This is what our nation expects, and we will continually
    meet that expectation.

                                   WHAT WE DO

        The United States armed forces exist to fight and win our Nation's
    wars, which no service can accomplish alone. The Air Force's pivotal
    role is to deliver fully capable and integrated air and space power to
    the Joint Force Commander (JFC). By dominating the media of elevation,
    the Air Force offers unique warfighting capabilities that leverage the
    strengths of surface forces and expand the range of potential effects.
        Air and space are realms with unlimited horizons for discovery and
    development. While the Air Force has made tremendous strides in
    realizing the visions of early airmen and exploiting the operational
    potential in each medium, we know there is an array of capabilities as
    yet undiscovered. As the Air Force strives to realize these
    possibilities, we deliver a multitude of air and space achievements for
    joint warfighting.
        Although relatively short, Air Force history reveals fundamental
    competencies that are core to developing and delivering air and space
    power--those unique institutional qualities that set the Air Force
    apart from the other services and any other military force in the
    world. By identifying and keeping these competencies foremost in our
    vision, we are able to more effectively advance the unique
    capabilities, as well as the ultimate effects, the Air Force provides
    to the joint force and the Nation.
        The Air Force continually develops areas of expertise that make us
    the preeminent air and space force in the world. Previously, we
    distilled these into six distinctive capabilities which we referred to
    as our ``core competencies''--Air and Space Superiority, Global Attack,
    Rapid Global Mobility, Precision Engagement, Information Superiority,
    and Agile Combat Support. However, just as our concepts of operations
    and capabilities continuously evolve, so also does the way in which we
    articulate Air Force competencies. With deeper refinement, we learned
    there are more fundamental elements to what we are as an Air Force and
    how we develop our capabilities for joint warfighting. These are our
    underlying institutional air and space core competencies--those that,
    in fact, make the six distinctive capabilities possible: Developing
    Airmen, Technology-to-Warfighting, and Integrating Operations. These
    three air and space core competencies form the basis through which we
    organize, train, and equip and from which we derive our strengths as a
    service.

    (1) Developing Airmen--The heart of combat capability
        The ultimate source of air and space combat capability resides in
    the men and women of the Air Force. The potential of technology,
    organization, and strategy are diminished without professional airmen
    to leverage their value. Our Total Force of Active Duty, Guard,
    Reserve, and civilian personnel are our largest investment and most
    critical asset. They are airmen, steeped in our expeditionary Service
    ethos. Therefore, from the moment they step into the Air Force through
    their last day of service, we are dedicated to ensuring they receive
    the precise education, training, and professional development necessary
    to provide a quality edge second to none. The full spectrum
    capabilities of our Air Force stem from the collective abilities of our
    personnel; and the abilities of our people stem from career-long
    development of professional airmen.

    (2) Technology-to-Warfighting--The tools of combat capability
        The vision of airmen in employing air and space power fundamentally
    altered how we address conflict. As the leader in military application
    of air and space technology, the Air Force is committed to innovation
    and possesses a vision to guide research, development, and fielding of
    unsurpassed capabilities. Just as the advent of aircraft revolutionized
    joint warfighting, recent advances in low observable technologies,
    space-based systems, manipulation of information, precision, and small,
    smart weapons offer no less dramatic advantages for combatant
    commanders. The Air Force nurtures and promotes its ability to
    translate vision into operational capability in order to produce
    desired effects. Our innovative operational concepts illuminate the
    capabilities we need, allowing us to develop unsurpassed capabilities
    to prevail in conflict and avert technological surprise.
        The F/A-22 is demonstrative of this ability to adapt technology to
    warfighting capabilities. Originally envisioned as an air superiority
    fighter, it has been transformed into a multi-role system. The F/A-22
    not only brings to bear warfighting capabilities without equal for
    decades to come, but also includes those we did not foresee at its
    inception. Collectively, the platform's supercruise, stealth,
    maneuverability, and novel avionics will deliver the ability to create
    crucial battlefield effects to the hands of the warfighter, and allow
    access to revolutionary concepts of operations.

    (3) Integrating Operations--Maximizing combat capabilities
        Effectively integrating the diverse capabilities found in all four
    services remains pivotal to successful joint warfighting. The Air Force
    contributes to this enduring objective as each element of air and space
    power brings unique and essential capabilities to the joint force. Our
    inherent ability to envision, experiment, and ultimately execute the
    union of a myriad of platforms and people into a greater, synergistic
    whole is the key to maximizing these capabilities. In so doing, we are
    able to focus acquisition and force planning on systems that enable
    specific, effects-based capabilities, rather than on individual
    platforms.
        Embedded in our exploration of innovative operational concepts is
    the efficient integration of all military systems--air, land, maritime,
    space, and information--to ensure maximum flexibility in the joint
    delivery of desired effects across the spectrum of conflict, from war
    to operations short of war. However, effective integration involves
    more than smart technology investment--it also requires investigation
    of efficient joint and service organization and innovative operational
    thinking. Thus, investments in our people to foster intellectual
    flexibility and critical analysis are equally as important as our
    technology investments.
        Collectively, our air and space core competencies reflect the
    visions of the earliest airmen and serve to realize the potential of
    air and space forces. We foster ingenuity and adventure in the
    development of the world's most professional airmen. We seek to
    translate new technologies into practical systems while we encourage
    intellectual innovation at every level of war. And, we drive
    relentlessly toward integration in order to realize the potential and
    maturation of air and space capabilities.
        Our proficiency in the three institutional air and space core
    competencies underpins our ability to deliver the Air Force's six
    distinctive capabilities in joint warfighting. In turn, our
    capabilities enable desired effects across the spectrum of joint
    operations through our task forces drawn from our air and space
    expeditionary forces. The results of this relationship between core
    competencies, distinctive capabilities, and operational effects are
    manifest in the array of successful missions the Air Force accomplished
    in the past year and those we continue to execute.

    Expeditionary Construct
        Our core competencies reflect a legacy of innovation and adaptation
    to accomplish our mission. This point is underscored by the fact that,
    in spite of over a 30 percent reduction in manpower in the past twelve
    years, we have faced an exponential increase in worldwide taskings.
    Intensifying operations tempo (OPSTEMPO) requires significant changes
    in the way our force trains, organizes, and deploys to support JFC
    requirements. We are a truly expeditionary force--the nature of our
    ``business'' is deployed operations.
        The Air Force meets JFC requirements by presenting forces and
    capabilities through our Air and Space Expeditionary Force (AEF)
    construct. This divides our combat forces into ten equivalent AEFs,
    each possessing air and space warfighting and associated mobility and
    support capabilities. A key element of our ability to deliver these
    tailored and ready expeditionary forces is our development of Task
    Force Concepts of Operations. Our TF CONOPS describe how we fight and
    how we integrate with our sister services and outside agencies. They
    are the fundamental blueprints for how we go to war. Combined with our
    AEF construct--the principal tool we use to present expeditionary
    wings, groups, and squadrons--TF CONOPS will guide our decisions in
    operational planning, enable us to provide scalable, quick-reacting,
    tasked-organized units from the ten standing AEFs; and sustain our
    ability to ensure trained and ready forces are available to satisfy
    operational plans and contingency requirements.
        The AEF construct incorporates a 15-month cycle during which two
    AEFs are designated as lead for a 90-day ``eligibility'' period. During
    this period, the two are either deployed or on alert for daily,
    worldwide expeditionary taskings, for which they are tailored and
    presented to the JFC as expeditionary squadrons, groups, and wings
    (depending on the specific requirement.) Meanwhile, the remaining eight
    AEFs are in various stages of reconstituting, training, or preparatory
    spin-up. It is during this preparatory time (approximately two months)
    that we integrate the training-to-task of AEF squadrons immediately
    prior to their on-call window.
        Yet, it is important to note that while our combat forces cycle
    through deployment vulnerability periods, they sustain wartime
    readiness throughout the 15-month training and preparation cycle--a
    critical driver of our 90-day eligibility window. Our AEF cycle thus
    precludes the need for ``tiered'' readiness by allowing our combat
    forces to remain current and capable for any contingency or operational
    plan.
        While ensuring necessary capabilities for the JFC, AEF cycles allow
    us to provide our airmen with a more stable and predictable environment
    in which to train, re-fit, and equip. In addition, AEF scheduling makes
    it easier and more practicable for the Air Reserve Component (ARC)
    forces--Air Force Reserve Command (AFRC) and Air National Guard (ANG)--
    to bring their essential contributions to bear by allowing them to plan
    definitive absences from their civilian employment. This is a critical
    advantage of the AEF construct, as ARC forces comprise nearly half of
    the forces assigned to AEFs and contribute the majority of forces for
    some mission areas.

    Operations in 2002
        Confident in our air and space capabilities, and committed to
    meeting any mission tasked, the Air Force completed an unprecedented
    array of operations and exercises in 2002. From the mountain ranges in
    Afghanistan and the jungles of the Philippines to the deserts of the
    Middle East, and across every continent and body of water, the Air
    Force joined with land and naval forces to secure America's national
    objectives. With each mission, the joint force grows more capable as it
    applies vision, experimentation, and integration to every undertaking.
    We do not act as individual services, but in concert as joint
    warfighters, as we prevail in the war on terrorism and in all
    undertakings.
        Assuring our Nation's citizens, the Air Force conducts a range of
    alert postures involving more than 200 military aircraft at over 20
    airbases for Operation NOBLE EAGLE (ONE). In conjunction with
    unprecedented NATO airborne warning support and other U.S. assets, we
    have provided continuous combat air patrols over sensitive/high risk
    areas, and random patrols over other metropolitan areas and key
    infrastructure. Last year, we flew over 25,000 ONE fighter, tanker,
    airlift, and airborne warning sorties, made possible only through the
    mobilization of over 30,000 reserve component airmen. In fact, the ANG
    and AFRC have effected over 75 percent of the total ONE missions. We
    will continue this critical mission, as we execute our most fundamental
    responsibility--homeland defense.
        Throughout Operation ENDURING FREEDOM (OEF), the USAF has
    maintained a continuous, steady-force presence in Afghanistan and the
    rest of the area of responsibility with more than 14,000 airmen. Air
    Force assets provide crucial intelligence and situation awareness,
    combat power, and support capabilities for the combatant commander. A
    key reason for American military success in the region is the
    performance of Air Force special operations airmen. Working in teams
    with other special forces, ground units, and coalition elements, airmen
    special operators heroically bring to bear the full weight of air and
    space capabilities--from the ground. They introduce our adversaries to
    the full lethality of our airmen, fully integrated on the ground, in
    the air, and from space.
        Fully engaged in all aspects of the war on terrorism, from mobility
    to close air support, our aircraft and crews flew more than 40,000 OEF
    sorties in 2002--over 70 percent of all coalition sorties. Over 8,000
    refueling missions marked the linchpin capability for the joint fight--
    the tanker force--while the magnificent achievements of airlift assets
    rounded out overwhelming mobility efforts. Simply put, Air Force
    mobility forces made operations in a distant, land-locked nation
    possible.
        Beyond air operations, we operated and maintained several
    constellations of earth-orbiting satellites, and in 2002 we launched 18
    missions with a 100 percent success rate--including the first space
    launches using Evolved Expendable Launch Vehicles. These activities
    bolstered America's assured access to space and ensured vigorous,
    global intelligence, surveillance and reconnaissance (ISR), missile
    warning, precision navigation and timing, communications, and weather
    systems. In addition, manned, unmanned, and space ISR assets not only
    delivered unprecedented battlefield awareness, but with the Predator
    unmanned aerial vehicle (UAV), also introduced transformational combat
    capabilities.
        ONE and OEF levied particularly heavy demands on our security
    forces. In CONUS and forward locations, increased alert postures
    warranted significant increases in security personnel who constitute a
    critical element of our force protection capabilities. These demands
    have raised our force protection posture worldwide and have forced us
    to adjust to a new ``steady state'' condition. Security forces bear the
    brunt of the adjustment effort despite a resultant baseline shortfall
    of approximately 8,000 personnel to meet the alert postures. In the
    near term, we involuntarily extended for a second year nearly 9,500 ARC
    security forces. However, in order to relieve these ARC forces, we
    concluded a two-year agreement with the Army for short-term support,
    and initiated several ongoing efforts to combine technology, new
    processes, and some manpower shifts to achieve a long-term adjustment
    to this new era.
        As we adjust, we continue to deliver force protection through the
    integrated application of counter and antiterrorism operations, and
    preparedness for chemical, biological, radiological, nuclear, and
    explosive (CBRNE) incidents. We employ a tailored selection and
    application of multi-layered active and passive, offensive and
    defensive measures. Intelligence and counterintelligence programs
    support this integrated effort and remain critical to our success. In
    this regard, we continued to develop and employ all-source intelligence
    systems; cross-functional intelligence analysis procedures; and an
    operational planning process to implement Force Protection operations
    that deter, detect, deny, and destroy threats. Our goal is to see
    first, understand first, and act first.
        Though engaged in these security enhancements and the global war on
    terrorism, our combat operations were not limited to OEF in 2002. Iraqi
    forces fired on coalition aircraft over 400 times during 14,000 sorties
    supporting Operations NORTHERN WATCH (ONW) and SOUTHERN WATCH (OSW).
    The Air Force maintained a continuous, regional presence of more than
    9,000 airmen, while air and space assets provided vital intelligence,
    situation awareness, and indications and warning to monitor Iraq's
    compliance with United Nations' directives.
        Whether on the ground or in the skies, our airmen also conducted a
    host of other missions above-and-beyond standing security requirements
    around the globe. Even though the war on terrorism is our national
    military focus, airmen joined soldiers, sailors, and marines in the
    Balkans, South America, Europe, Asia, and around the world to assure
    our friends and allies, while deterring and dissuading our adversaries.
        Worldwide humanitarian and non-combat evacuation operations
    missions remain other key tasks for Air Force personnel. In 2002, for
    example, airlift crews exceeded 2.4 million airdropped daily ration
    deliveries in Afghanistan, evacuated allied personnel at threatened
    locations around the world, and flew typhoon relief missions to Guam,
    while our explosive ordnance specialists removed unexploded munitions
    in Africa. Yet, while conducting unprecedented food, medical, civil
    engineering, and evacuation relief efforts in warring regions, we were
    also on call to perform critical, quick-response missions during
    natural or man-made crises at home. Through explosive ordnance
    disposal, firefighting, law enforcement support, and rapid medical
    response expertise, we conducted daily operations in support of local,
    state, and federal agencies. During the wildfire season, ANG and AFRC
    C-130s equipped with modular airborne fire fighting systems flew nearly
    200 sorties while assisting U.S. Forest Service firefighting efforts in
    numerous states. In addition, when Hurricane Lili endangered Louisiana,
    Air Force aeromedical and critical care forces rolled in with C-9
    aircraft to transport and safeguard 40 patients from threatened
    hospitals.

    Training Transformation
        Training is a unique American military strength. As potential
    adversaries work to overcome our technological superiority, it is
    imperative we enhance this strength through improved proficiency at the
    tactical level and integration at the joint level. Training is integral
    to our core competencies and the critical enabler for military
    capabilities, so we are engaged with the other services, unified
    commands, and the Office of the Secretary of Defense (OSD) in
    developing and implementing a training transformation plan. Our
    objective is to train as we will fight, and increase the joint context
    of our exercises through live, virtual, distributed, and constructive
    environments. It is the realism of this training that gives us the edge
    in combat. This involves not only modernizing the integration of space
    and information operations on our ranges, but also planning for their
    sustainment to meet future test and training missions while
    implementing environmentally sound use and management to ensure long
    term availability. Additionally, to expand range support for current
    and emerging missions, we are embarking on a new effort to identify and
    procure environmental, airspace, and spectrum resources at home and
    abroad. Balancing competing economic and environmental needs for these
    resources is a growing challenge we face with our regulatory and
    community partners. To support this effort, DOD developed the Range and
    Readiness Preservation Initiative. This legislation recommends
    clarification to environmental laws that, as currently written and
    interpreted, can adversely affect resources available to support
    training activities at ranges.

    Joint Chiefs of Staff (JCS) Exercises, Interoperability Training, and
            Experimentation
        We advanced joint and combined interoperability skills with our
    sister services and those of 104 nations throughout 111 JCS exercises
    and Joint Task Force (JTF) experimentation, conducted in 40 foreign
    countries. Exercises ranged from large field training such as BRIGHT
    STAR, to command post exercises like POSITIVE RESPONSE, to smaller, but
    equally valuable, humanitarian exercises, as in the school
    construction, well drilling, and medical clinic visits of NEW
    HORIZONS--JAMAICA. These activities provided realistic training and
    enhanced the effectiveness of all participating nations' forces.

    Task Force Enduring Look
        Success in future operations hinges upon our ability to learn from
    previous operations and exercises. To ensure we learn from ongoing
    operations and adapt accordingly, we established Task Force Enduring
    Look (TFEL). TFEL is responsible for Air Force-wide data collection,
    exploitation, documentation, and reporting for our efforts in ONE/OEF.
    The objective for TFEL is clear--provide superior support to the
    warfighter, and properly recognize and apply lessons learned during
    rather than only at the conclusion of these operations.
        Through extensive investigation and analysis, TFEL examines joint
    warfighting effectiveness, determines implications, and shapes future
    Air Force transformation of expeditionary air and space power. The task
    force documents lessons learned in a variety of products that cover
    every conceivable subject matter. As derivative campaigns unfold, TFEL
    will broaden its assessments in follow-on reports. Applying the lessons
    in these reports and adapting from our past experiences will help
    ensure we prevail in future operations.
        We are able to accomplish the full spectrum of air and space
    missions and improve our capabilities through lessons learned, by
    focusing on the best way to organize, train, and equip. Creativity,
    ingenuity, and innovation are the hallmarks of all that we do, all of
    which begins with our people.

                                   WHO WE ARE

        ``No arsenal and no weapon in the arsenals of the world is so
    formidable as the will and moral courage of free men and women. It is a
    weapon our adversaries in today's world do not have. It is a weapon
    that we as Americans do have.''    President Ronald Reagan, 20 January
    1981
        America is blessed with vast resources, and chief among these is
    her people. In the same way, the Air Force relies on the officers,
    enlisted, civilians, and contractors that comprise our Total Force--
    Active Duty, Guard and Reserve--for cultural strength and unbridled
    skill. Air Force strength will never reside in systems alone, but in
    the airmen operating them. Nor will our capabilities improve solely
    through technology, but instead through the adaptive insight of our
    creative and selfless professionals.
        Therefore, we recruit and retain a remarkably diverse group to
    ensure we reach the fullest potential of air and space forces. Their
    backgrounds reflect the cross-section of American culture--all races,
    religions, economic and educational backgrounds, skill and management
    levels, men and women--and make this Air Force the tremendous
    organization it is today. Just as diverse individual citizens find
    unity in the term American, our personnel embrace an identity and
    fundamental perspective as Airmen.
        The underlying qualities found in all airmen emanate from our core
    values--integrity first, service before self, and excellence in all
    that we do. Embedded in these core values are the inherent
    characteristics of our confident, capable airmen--courage, tenacity,
    professionalism, vision, pride, and, when faced with seemingly
    insurmountable obstacles, heroism. Indeed, today's airmen carry on the
    traditions and visions of the earliest generation of airmen while
    preparing for the challenges of the future.
        The diversity of our airmen energizes the advancement of America's
    air and space power. Airmen embrace transformational ideas and seek to
    apply them to every aspect of the Air Force, from organizational
    constructs to concepts of operations and employment. They are able
    stewards of the nation's space programs, advancing ideas and
    technologies for national security, as well as for the environmental
    and economic benefit of our Nation and the world. And yet, ultimately
    our standout advantage is our warrior airmen themselves, who
    demonstrate skills and dedication in combat unsurpassed by any in
    history. Whether maintaining safe skies across the United Nations'
    sanctioned no-fly zone in Iraq, hunting down terrorists in the jungles
    of the Philippines, or paying the ultimate price while rescuing fellow
    Americans in a battle on an Afghan ridge, our airmen are proven combat
    veterans. Their selflessness resonates the very best of our Service.
        Airmen are expeditionary--our natural state of operations is not
    ``home station,'' but rather, deployed. After two successful cycles,
    our AEF construct has been validated as an effective means of meeting
    our Nation's expeditionary requirements. Yet we continue to enhance the
    construct, by initiating significant organizational change to ensure
    nearly every airman belongs to one of the ten AEFs. The effect has been
    a change to our airmen's mindset and culture, where an individual's AEF
    association cultivates an expeditionary perspective and a clearer
    appreciation for joint warfighting requirements and capabilities.

    Force Development--A New Leadership Development Paradigm
        In the past, we addressed aspects of career development, education,
    and assignments individually, but not necessarily in a coordinated,
    connected approach. Recognizing this, and to prepare for the future
    more ably, we introduced a systemic, deliberate force development
    construct that evolves professional airmen into joint force warriors.
    This construct coordinates doctrine and policies, concentrated to
    provide the right level, timing, and focus of education, training, and
    experience for all airmen, while encompassing personal, team, and
    institutional leadership skills across tactical, operational, and
    strategic levels.
        In the 21st Century, we need air and space warriors with mastery of
    their primary skills and others who possess competency beyond their own
    specialty. However, this diversity must be deliberate to ensure the
    correct skills are paired according to institutional requirements.
    Force development encourages many to obtain a deep perspective in their
    functional area, but at the same time offers the broader perspective we
    need to complement our leadership team. We begin this transformation
    with the Active Duty officer corps and will eventually encompass the
    civilian, enlisted, and Reserve component to better meet the expanding
    challenges of tomorrow.

    Education and Technical Training--Emphasis on Joint Leadership/Warfare
        As opportunities resident in advancing technologies unfold, it is
    imperative that the Air Force be able to draw upon a vibrant collection
    of educated, technically skilled, and technologically savvy airmen--
    both uniformed and civilian alike. We are answering this fundamental
    need in fiscal year 2003 with aggressive and innovative initiatives to
    enhance the abilities and breadth of our force. Agile, flexible
    training is an essential investment in human capital, and our
    initiatives will ensure our investment delivers the right training to
    the right people at the right time.
        In August 2002, we began our groundbreaking Enlisted-to-Air Force
    Institute of Technology (AFIT) Program. An initial cadre of senior NCOs
    began receiving world-class, graduate education to optimize them for
    greater responsibilities and challenging follow-on assignments. We will
    also provide a major influx of officers into AFIT, Naval Postgraduate
    School (NPS), and civilian institutions. In addition, because more than
    42 percent of our civilian force will be eligible for retirement in the
    next five years, we are committing significant resources to pay for
    advanced education as well as cross-functional career broadening.
        Future military missions and contingencies will require greater
    sophistication and understanding of the security environment, and our
    expeditionary force requires airmen with international insight, foreign
    language proficiency, and cultural understanding. We are working
    diligently to expand the cadre of professionals with such skill sets
    and experiences. Our education initiatives will contribute to a major
    corporate culture shift that fosters appropriate development throughout
    our airmen's careers to meet evolving force requirements.

    Diversity
        Foremost among our efforts to enhance the capabilities of our
    airmen is a passionate drive for diversity. Diversity is a warfighting
    issue; it is a readiness issue. We must attract people from all
    segments of American society and tap into the limitless talents and
    advantages resident in our diverse population if we hope to reach our
    fullest potential as a fighting force. Nurturing rich representation
    from all demographics opens the door to creativity and ingenuity,
    offering an unparalleled competitive edge for air and space
    development. Today's multi-threat world also mandates that we
    invigorate in our airmen the ability to effectively think across
    cultural boundaries and functional paradigms (or stovepipes). We will
    thus recruit, train, and retain airmen without intellectual boundaries,
    uniquely capable of integrating people, weapons, ideas, and systems to
    achieve air and space dominance.

    Recruiting
        It takes tremendous effort to identify and develop such airmen, yet
    the return for the nation is immeasurable. Increased advertising, an
    expanded recruiting force with broader access to secondary school
    students, and competitive compensation prepare us to meet recruiting
    goals. Despite the challenge of mustering such a diverse and skilled
    collection of Americans, we exceeded our fiscal year 2002 enlisted
    recruiting goals and expect to surpass fiscal year 2003 objectives. We
    will adapt our goals to meet new force objectives; however, the
    capacity limitations of Basic Military Training and Technical Training
    School quotas will continue to challenge Total Force recruiting
    efforts.
        Officer recruitment presents similar challenges, yet we continue to
    attract America's best and brightest. However, we are particularly
    concerned with military and civilian scientists and engineers. We fell
    short of our accession goal for this group and have begun all-out
    recruitment and retention efforts for these critical specialties. For
    example, in fiscal year 2003 we plan to begin a college sponsorship
    program to attract scientists and engineers from universities lacking
    ROTC programs. In addition, we continue to find recruiting health care
    professionals especially difficult, so we are making adjustments to
    ensure improvement.
        We will also closely monitor ARC recruitment. Historically, the ANG
    and AFRC access close to 25 percent of eligible, separating Active Duty
    Air Force members (i.e. no break in service.) Continued high OPSTEMPO
    may negatively impact our efforts in attracting Air National Guardsmen,
    as well as drawing separating Active Duty airmen to the Air Force
    Reserve. As a result, recruiting will have to ``make up'' a substantial
    portion of accessions from that market by developing alternatives.
    Retention
        The Air Force is a retention-based force. The critical skill sets
    we develop in our airmen are not easily replaced, so we expend every
    effort to retain our people--the impetus for our ``re-recruiting''
    efforts. Overall retention plans include robust compensation packages
    that reward service, provide for a suitable standard of living, ensure
    a high quality of life, and retain the caliber of professionals we need
    to decisively win America's wars.
        For fiscal year 2002, it was difficult to calculate accurate
    retention results due to Air Force implementation of Stop Loss.
    Nonetheless, we continue to reap the benefits of an aggressive
    retention program, aided by bonuses, targeted pay raises, and quality
    of life improvements. Introducing the Critical Skills Retention Bonus
    for select officer specialties reinforces our commitment to target
    specific skills suffering significant retention challenges. However,
    many airmen retained under Stop Loss will separate throughout fiscal
    year 2003--a fact of particular concern for our rated force.
        Bonuses and special pay programs continue to be effective tools in
    retaining our members. The ANG has placed particular emphasis on
    aircraft maintenance fields, security forces, and communication and
    intelligence specialists, among others, by offering enlistment and
    reenlistment bonuses, Student Loan Repayment Program, and the
    Montgomery GI Bill Kicker Program. Another example is the flexible
    Aviation Continuation Pay (ACP) program--an important part of our
    multi-faceted plan to retain pilots. In conjunction with our rated
    recall program, our fiscal year 2002 plan resulted in a substantial
    increase in committed personnel. We have a similarly designed ACP
    program in fiscal year 2003, and developed extensions to include
    navigators and air battle managers.

    Summary
        Regardless of AEF deployment or home station missions, our airmen
    accomplish their duties with firm commitment and resolute action. It's
    what we do. It's who we are: a practical, technically sound, ingenious
    force of uniformed and civilian airmen derived from this richly diverse
    nation to create the world's premier air and space power.

                               WHERE WE'RE GOING

        The first hundred years of powered flight witnessed tremendous and
    enduring innovation. We commemorate this centennial during 2003 with
    the theme, Born of Dreams, Inspired by Freedom, which recognizes the
    remarkable accomplishments of generations of airmen. Today's airmen are
    equally impassioned to bring dreams to reality as we pursue our vision
    of tomorrow's Air Force, Unlimited Horizon. Through this vision, we
    build a bridge from today's existing capabilities to those required to
    win tomorrow's wars.
        Ultimately our success will be measured by our ability to provide
    our forces with assured freedom to attack and freedom from attack.
    Achieving such victory in tomorrow's battlespace will demand our full
    integration with fellow services, allies, and coalition partners--an
    essential part of the expeditionary construct. Through our security
    cooperation efforts, we build these international defense relationships
    and allied capabilities to ensure we have the access, interoperability,
    and international support for our worldwide commitments. Toward this
    requirement, we are working with our sister services to develop truly
    joint concepts of operations that integrate the full spectrum of land,
    sea, air, space, and information warfighting capabilities. When America
    places its men and women in uniform into harm's way, we owe them
    preeminent resources, planning, and organization to achieve victory
    over any adversary.

    Capabilities-Based CONOPS
        While adapting to the new strategic environment, our principal
    focus has been transitioning from a platform-based garrison force to a
    capabilities-based expeditionary force. No longer platform-centric, we
    are committed to making warfighting effects, and the capabilities we
    need to achieve them, the driving force behind our ongoing
    transformation. From this point forward, all of our operational,
    programming, and budget decisions will be supported by a predefined
    capability.
        Our emerging TF CONOPS will help make this essential shift by
    providing solutions to a variety of problems warfighters can expect to
    encounter in the future. Whether detailing our plans for operating in
    an anti-access environment or identifying how to deliver humanitarian
    rations to refugees, TF CONOPS lend focus on the essential elements
    required to accomplish the mission. They cover the complete spectrum of
    warfighting capabilities (deep strike, information, urban,
    psychological operations, etc.) and enable us to tailor forces
    (expeditionary wings, groups, or squadrons) from existing AEFs to meet
    JFC's requirements. Responsibility for CONOPS development falls to the
    Major Commands, with a senior officer on the HQ USAF Air Staff assigned
    to each CONOPS to serve as their ``Champion,'' facilitating the
    process.
        TF CONOPS directly support Secretary Rumsfeld's efforts to free
    scarce resources trapped in bureaucracy and push them to the
    warfighter. They will also be the focal point for a capabilities-based
    Program Objective Memorandum (POM). In support of this effort, our
    Capabilities Review and Risk Assessment analyzes and assesses
    shortfalls, health, risks, and opportunities, while prioritizing
    required future capabilities. This helps CONOPS developers articulate
    any disconnects between required capabilities and developing programs,
    while providing senior Air Force leadership an operational,
    capabilities-based focus for acquisition program decision-making. TF
    CONOPS include:
      --Global Strike Task Force (GSTF) employs joint power-projection
            capabilities to engage anti-access and high-value targets, gain
            access to denied battlespace, and maintain battlespace access
            for all required joint/coalition follow-on operations.
      --Global Response Task Force (GRTF) combines intelligence and strike
            systems to attack fleeting or emergent, high-value, or high-
            risk targets by surgically applying air and space power in a
            narrow window of opportunity, anywhere on the globe, within
            hours.
      --Homeland Security Task Force (HLSTF) leverages Air Force
            capabilities with joint and interagency efforts to prevent,
            protect, and respond to threats against our homeland--whether
            within or beyond U.S. territories.
      --Space and Command, Control, Communications, Computers, Intelligence
            Surveillance, and Reconnaissance (Space & C\4\ISR) Task Force
            harnesses horizontal integration of manned, unmanned, and space
            systems to provide persistent situation awareness and
            executable decision-quality information to the JFC.
      --Global Mobility Task Force (GMTF) provides regional combatant
            commanders with the planning, command and control (C\2\), and
            operations capabilities to enable rapid, timely, and effective
            projection, employment, and sustainment of U.S. power in
            support of U.S. global interests--precision delivery for
            operational effects.
      --Nuclear Response Task Force (NRTF) provides the deterrent
            ``umbrella'' under which conventional forces operate, and, if
            deterrence fails, avails a rapid scalable response.
      --Air and Space Expeditionary CONOPS is the overarching context,
            which identifies and sequences distinctive capabilities and
            broad-based functions that air and space power provide the JFC
            to generate desired effects for national military objectives.
        The Air Force is transforming around these Task Force Concepts of
    Operations. In addition to serving as a roadmap for operators, the TF
    construct will form the basis for resource allocation, future system
    acquisitions, and POM submissions in order to find capabilities-based
    solutions to warfighter problems.

    Science and Technology (S&T)--Wellspring of Air and Space Capabilities
        Reaching these warfighter solutions rests in large measure with
    research and development. Through robust investment and deliberate
    focus in science and technology, the Air Force invigorates our core
    competency of technology-to-warfighting. Combined with innovative
    vision, S&T opens the direct route towards transforming air and space
    capabilities. Therefore we continue long-term, stable investment in S&T
    to ensure we realize future capabilities, as well as those that may
    immediately affect existing systems.
        We are improving our S&T planning and collaboration with other
    services and agencies to ensure: we: (1) encourage an operational pull
    that conveys to the S&T community a clear vision of the capabilities we
    need for the future; (2) address the full spectrum of future needs in a
    balanced and well-thought out manner; and (3) enhance our ability to
    demonstrate and integrate promising technologies. Some of these new
    technologies--UAV systems, laser-based communications, space-based
    radar, and others--show clear promise for near-term, joint warfighting
    applications. Others present opportunities we can only begin to
    imagine. We are exploring each of these technologies, and our
    investment will deliver the required capabilities of our CONOPS.

    Executive Agent for Space
        Embedded in all of our TF CONOPS, and indeed within most military
    operations, is an extensive reliance on systems resident in space. The
    Air Force proudly fulfills the role of Department of Defense Executive
    Agent for Space with confidence and enthusiasm. Our ability to execute
    this tremendous responsibility stems from a natural outflow of our core
    competencies and distinctive capabilities. Accordingly, and in
    conjunction with the other services and agencies, we are shaping a new
    and comprehensive approach to national security space management and
    organization.
        Our capstone objective is to realize the enormous potential in the
    high ground of space, and to employ the full spectrum of space-based
    capabilities to enable joint warfighting and to protect our national
    security. The key to achieving this end is wholesale integration:
    through air, land, space, and sea; across legacy and future systems;
    among existing and evolving concepts of operations; and between
    organizations across all sectors of government. We will continue to
    deliver unity of vision, effort, and execution to fulfill our mission
    of delivering the most advanced space capabilities for America.

    Drawing Effects from Space
        Our horizon is truly unlimited, extending beyond the atmospheric
    environs of airpower to the reaches of outer space. Our proud Air Force
    tradition of airpower is joined by an equally proud and continually
    developing tradition of space power.
        In the early days of the space age, only those at the strategic
    level received and exploited the benefits of space capabilities. The
    current state of affairs, however, is decidedly different. The former
    distinctions between classified and unclassified programs among
    military, civil, and commercial applications are growing increasingly
    blurred--in some cases, they are virtually seamless. In short, space
    capabilities now are woven deeply into the fabric of modern society,
    and they have altered forever the way we fight wars, defend our
    homeland, and live our lives.
        It is in this context and this understanding of the widespread and
    increasing importance of space systems that we strive to meet present
    and future national security challenges by providing dominant space
    capabilities that will:
      --Exploit Space for Joint Warfighting.--Space capabilities are
            integral to modern warfighting forces, providing critical
            surveillance and reconnaissance information, especially over
            areas of high risk or denied access for airborne platforms.
            They provide weather and other earth-observation data, global
            communications, precision navigation and guidance to troops on
            the ground, ships at sea, aircraft in flight, and weapons en
            route to targets. All of these capabilities, and more, make
            possible the tremendous success our joint warfighters achieve
            during combat operations.
          We will enhance these existing capabilities and, where it makes
            sense, pursue new ones such as the Transformational
            Communications System (TCS), which will strive to dramatically
            increase bandwidth and access for warfighters; and Space Based
            Radar, which will complement the airborne Joint Surveillance
            Target and Attack Radar System (JSTARS) while migrating Ground
            Moving Target Indicators (GMTI) into space. We will also
            develop methods and technologies to enhance our nation's
            ability to conduct rapid and accurate global strike operations
            anywhere in pursuit of U.S. interests.
      --Pursue Assured Access to Space.--We cannot effectively exploit
            space for joint warfighting if we do not have responsive,
            reliable, and assured access to space. In August 2002, the new
            Evolved Expendable Launch Vehicle got off to a strong start
            with the successful launch of Lockheed Martin's Atlas V
            booster. Boeing's Delta IV program added to the Nation's quiver
            of modern launch vehicles with liftoff in November 2002. We
            will also pursue advanced and highly versatile reusable
            launchers and small expendables with extremely short response
            times to achieve long-term assured access, while taking the
            necessary steps to maintain and improve our space launch
            infrastructure.
      --Preserve our Freedom to Act in Space.--We must be able to act
            freely in space, or risk losing those capabilities essential to
            joint warfighting. We initiated efforts to increase our space
            situation awareness, beginning with the new Space Situation
            Awareness Integration Office at Air Force Space Command, and a
            similar program at the Space and Missile Systems Center. Future
            efforts are planned to develop strategy, doctrine, and programs
            to improve the protection of our own space capabilities while
            denying the benefits of joint space capabilities to our
            adversaries.
        As it is with all Air Force capabilities, the most important
    resource for national space capabilities is neither technological nor
    fiscal--it is human. Our Space Professional Strategy fulfills a Space
    Commission recommendation to develop space professionals and nurture a
    cadre to lead our national security space endeavors at all levels in
    the decades ahead. These space-expert airmen will be the core stewards
    of space operations, and shoulder the responsibility for aggressively
    advancing joint warfighting capabilities into the high ground frontier.

    Horizontal Integration of Manned, Unmanned, and Space Assets
        The essence of transformation is found in leveraging the nation's
    technological dominance to create maximum asymmetrical advantage.
    Airmen seek unrestricted boundaries when looking at war planning from a
    theater-wide perspective, or talking about national elements of power.
    Simply stated, it is in the way we think--we must take advantage of it.
        Our foremost objective is to develop the capability to conduct
    rapid and precise operations to achieve desired effects and shape the
    battlespace for the joint force. This requires interfacing numerous DOD
    and national assets--the seamless, horizontal integration of manned,
    unmanned, and space-based systems. An essential element is designing
    systems that use digital-level, machine-to-machine conversations to
    expedite data flow and ensure the JFC receives timely, decision-quality
    information. Such integration will dramatically shorten the find, fix,
    track, target, engage, and assess (F\2\T\2\EA) cycle. In the end, we
    know that neither JFC's guiding operations, nor special operators
    putting iron on targets, care what source provides the target data. It
    is an effect they seek, and what we will provide.
        Key to the warfighter's success is Predictive Battlespace Awareness
    (PBA). PBA requires in-depth study of an adversary well before
    hostilities begin. Ultimately we want to be able to anticipate his
    actions to the maximum extent possible. PBA-derived insights allow us
    to utilize critical ISR assets for confirmation rather than pure
    discovery once hostilities begin. We are then able to analyze
    information to assess current conditions, exploit emerging
    opportunities, anticipate future actions, and act with a degree of
    speed and certainty unmatched by our adversaries.
        Along this path, we are transitioning from collecting data through
    a myriad of independent systems (Rivet Joint, AWACS, JSTARS, space-
    based assets, etc) to a Multi-sensor Command and Control Constellation
    (MC\2\C) capable of providing the JFC with real-time, enhanced
    battlespace awareness. Today, this transition is restricted by the
    necessity to rely on Low Density/High Demand (LD/HD) C\4\ISR assets.
    The limitation inherent in LD/HD platforms forces us to shift their
    exploitation capabilities between theaters to cover emerging global
    threats and events. This sub-optimizes overall battlespace awareness
    and limits our efforts at predictive analysis. In the interim,
    responsive space-based ISR assets will help mitigate our over-stressed
    LD/HD systems. Yet ultimately, we need a synergistic combination of
    military and commercial assets, advanced data processing capabilities,
    and assured reachback to achieve true battlespace awareness.
        In the future, a single wide-body platform employing tunable
    antennas and sensors--Multi-sensor Command and Control Aircraft
    (MC\2\A)--will replace many of the C\4\ISR functions of today's
    specialized, but independent assets. Air, ground, and space assets will
    comprise the MC\2\C, which will elevate Joint Forces Air Component
    Commanders' ability to command and control air assets. Additionally,
    every platform will be a sensor on the integrated network. Regardless
    of mission function (C\2\, ISR, shooters, tankers, etc), any data
    collected by a sensor will be passed to all network recipients. This
    requires networking all air, space, ground, and sea-based ISR systems,
    command and control (C\2\) nodes, and strike platforms, to achieve
    shared battlespace awareness and a synergy to maximize our ability to
    achieve the JFC's desired effects.
        Uniting joint and coalition information presents the most difficult
    challenge in providing one common operational picture for key decision
    makers. We are working closely with our sister services to eliminate
    the seams between existing systems and taking the necessary steps to
    ensure all future acquisitions are planned and funded to meet the
    interoperability requirements of future joint CONOPS.
        A critical element of successful information merging is
    communications, as bandwidth is finite and requires careful management.
    Long-range or penetrating systems must communicate beyond the horizon
    despite adversaries' attempts to exploit or interrupt these links. To
    counter disruption, all systems must be reliable, secure, and
    bandwidth-efficient. The PBA construct facilitates this objective by
    eliminating constrictive, stove-piped communications systems while
    emphasizing networked operations.
        We will realize the vision of horizontal integration in our TF
    CONOPS. GSTF, for example, will deliver the right-sized mix of assets
    with appropriate sensors capable of penetrating into enemy airspace.
    Such sensors may be low observable and/or expendable, mounted on either
    ISR platforms or imbedded into strike platforms. Sensors may consist of
    special operations forces, inserted before the commencement of
    hostilities, who communicate with attack platforms during combat via
    secure electronic writing tablets, annotating targets and threats on
    the imagery display with a stylus. As technology progresses, and where
    it makes sense, a significant portion of ISR functionality will likely
    migrate to space, affording 24/7 persistence and penetration. Likewise,
    advanced defensive counterspace capabilities will afford these systems
    protection from enemy actions.
        Combining manned, unmanned, and space-based assets with dynamic
    C\2\ and PBA transforms disparate collection and analysis activities
    into a coherent process, allowing the warfighter to make timely,
    confident, and capable combat decisions. This is what the Air Force
    brings to the joint fight. It is what air and space warriors are all
    about. We unlock the intellectual potential of airmen who think across
    the dimensions of mediums and systems capabilities, for the joint
    warfighter.

    Addressing the Recapitalization Challenges
        Despite new CONOPS and visions for future capabilities, we cannot
    rely on intellectual flexibility to eradicate the challenge of old
    systems and technologies. Though creativity may temporarily reduce the
    negative impacts of aging systems on our operational options,
    ultimately there are impassable limits created by air and space system
    hardware issues.
        We have made tremendous strides in modernizing and improving
    maintenance plans for our aircraft; however, the tyranny of age has
    introduced new problems for old aircraft. Reality dictates that if we
    completely enhance the avionics and add new engines to 40-year old
    tankers and bombers, they are still 40-year old aircraft, and subject
    to fleet-threatening problems such as corrosion and structural failure.
        This is equally true for our fighter aircraft, where once cutting-
    edge F-117s now average over 15-years of age, and mainstay air-
    dominance F-15Cs are averaging nearly 20-years of service. With double-
    digit surface-to-air missile systems, next-generation aircraft, and
    advanced cruise missile threats proliferating, merely maintaining our
    aging fighter and attack aircraft will be insufficient. In fact, the
    dramatic advances offered in many of our TF CONOPs cannot be realized
    without the addition of the unique capabilities incorporated in the F/
    A-22. Simply stated, our legacy systems cannot ensure air dominance in
    future engagements--the fundamental element for joint force access and
    operations. We will thus continue executive oversight of F/A-22
    acquisition in order to ensure program success. While keeping our
    funding promises, we will procure the only system in this decade that
    puts munitions on targets, and which is unequally capable of detecting
    and intercepting aircraft and cruise missiles.
        Although ultimately solving these recapitalization challenges
    requires acquisition of new systems, we will continue to find
    innovative means to keep current systems operationally effective in the
    near term. We know that just as new problems develop with old systems,
    so too do new opportunities for employment, such as our employment of
    B-1s and B-52s in a close air support role during OEF. We will also
    pursue new options for these long-range strike assets in a standoff
    attack role for future operations.
        Unlike with the aforementioned air-breathing assets, we cannot make
    service life extensions or other modifications to our orbiting space
    systems. Satellites must be replaced regularly to account for hardware
    failures, upgrade their capabilities, and avoid significant coverage
    gaps. Additionally, we must improve outmoded ground control stations,
    enhance protective measures, continue to address new space launch
    avenues, and address bandwidth limitations in order to continue
    leveraging space capabilities for the joint warfighter. We are
    exploring alternatives for assuring access to space, and a key aspect
    of this effort will be invigorating the space industrial base.
        Finally, it is imperative that we address the growing deficiencies
    in our infrastructure. Any improvements we may secure for our air and
    space systems will be limited without a commensurate address of
    essential support systems. Deteriorated roofs, waterlines, electrical
    networks, and airfields are just some of the infrastructure elements
    warranting immediate attention. Our ability to generate air and space
    capabilities preeminently rests with the ingenuity of visionary ideas,
    yet intellectual versatility must be supported by viable systems and
    structures to realize our Service potential.

    Organizational Adaptations
        Commensurate with our drive to enhance air and space capabilities
    is our identification and development of organizational structures to
    aid these advances. In 2002, we initiated numerous adaptations to more
    efficiently and effectively exploit Air Force advantages for the joint
    warfighter.

    Warfighting Integration Deputate
        Comprehensive integration of the Air Force's extensive C\4\ISR
    systems is paramount for our future capabilities. This requires an
    enterprise approach of total information-cycle activities including
    people, processes, and technology. To achieve this, we created a new
    Deputy Chief of Staff for Warfighting Integration (AF/XI), which brings
    together the operational experience and the technical expertise of
    diverse elements (C\4\ISR, systems integration, modeling and
    simulation, and enterprise architecture specialties.)
        This new directorate will close the seams in the F\2\T\2\EA kill
    chain by guiding the integration of manned, unmanned, and space C\4\ISR
    systems. AF/XI's leadership, policy, and resource prioritization will
    capitalize on the technologies, concepts of operations, and
    organizational changes necessary to achieve horizontal integration and
    interoperability.
        Success has been immediate. AF/XI worked with the Deputy Chief of
    Staff for Air and Space Operations to champion increased Air Operations
    Center weapon system funding in the fiscal year 2004 POM, which
    accelerated the stabilization and standardization of the weapon system.
    Subsequently, the base-lined weapon system now has a modernization
    plan, which is both viable and affordable. AF/XI also led analysis that
    highlighted imbalances among collection and exploitation capabilities.
    As a result, we plan to accelerate ground processing and exploitation
    capabilities within the Future Years Defense Program to close the gap.
    Major contributions in management of the complex information
    environment will continue, as AF/XI makes better use of scarce
    resources, allowing the Air Force to provide the joint warfighter the
    capabilities to dominate the battlespace.

    Chief Information Officer (AF/CIO)
        Partnered with AF/XI, the AF/CIO shares responsibility to spearhead
    the transformation to an information-driven, network-centric Air Force.
    These two organizations orchestrate the integration within our
    information enterprise, and establish processes and standards to
    accelerate funding and ensure priorities match our integrated
    information vision.
        The AF/CIO's specific mission is to promote the most effective and
    efficient application, acquisition, and management of information
    technology resources under an enterprise architecture. The goal is to
    provide the roadmap for innovation and to function as a blueprint for
    the overall leverage of valuable information technology. Enterprise
    architecture will use models and processes to capture the complex
    interrelationships between the Air Force's systems and platforms. A
    resultant example is basing Information Technology (IT) investment
    decisions on sound business cases, approved Air Force standards, and,
    ultimately, how a particular technology contributes to specific
    capabilities. Additionally, we are institutionalizing enterprise
    architecting as a key construct in defining mission information
    requirements and promoting interoperability.
        Currently, the wide variety of IT standards limits C\2\ processes
    and information and decision support to our warfighters. The AF/CIO-AF/
    XI team is tackling this and all other integration challenges as they
    develop an enterprise architecture that spans the entire Air Force,
    while also staying in harmony with other services' efforts.

    Blended Wing
        We do nothing in today's Air Force without Guard, Reserve and
    civilian personnel working alongside Active Duty airmen. A fundamental
    initiative of Air Force transformation is formalizing this integration
    under the Future Total Force (FTF). As part of the FTF, we are pursuing
    innovative organizational constructs and personnel policies to meld the
    components into a single, more homogenous force. FTF integration will
    create efficiencies, cut costs, ensure stability, retain invaluable
    human capital, and, above all, increase our combat capabilities.
        A key effort is to ``blend,'' where sensible, units from two or
    more components into a single wing with a single commander. This level
    of integration is unprecedented in any of the services, where Active
    Duty, Guard, and Reserve personnel share the same facilities and
    equipment, and together, execute the same mission. In essence, blending
    provides two resource pools within a single wing--one, a highly
    experienced, semi-permanent Reserve component workforce, offering
    stability and continuity; the other, a force of primarily Active Duty
    personnel able to rotate to other locations as needs dictate.
        The first blended wing opportunity arose with the consolidation of
    the B1-B fleet. The move left behind an experienced but underutilized
    pool of Guard personnel at Robins AFB, GA. Meanwhile, the collocated
    93rd Air Control Wing (ACW) (Active Duty E-8 Joint STARS), suffered
    from high tempo and low retention. Hence, Secretary Roche directed that
    the two units merge, and on 1 October 2002, the blended wing concept
    became a reality with the activation of the 116th ACW.
        The 116th ACW tackled many pioneering challenges: from legal
    questions surrounding the command of combined Active-Reserve component
    units, to programmatic issues with funding the program from two
    separate accounts, to integrating different personnel systems used by
    each component. Airmen from both components are working through these
    issues successfully, making the 116th an example for future FTF
    blending. Yet, some additional Title 10 and Title 32 provisions still
    need to be changed to make the FTF a reality. Meanwhile, parallel
    efforts, such as placing Reserve pilots and maintenance personnel
    directly into Active Duty flying organizations under the Fighter
    Associate Program, add to this leveraging of highly experienced
    Reservists to promote a more stable, experienced workforce.
        As organizational constructs, blending and associate programs lay
    an important foundation for a capabilities-based, expeditionary air and
    space force, which are inherently flexible and ideal to meet rotational
    AEF requirements. In a resource-constrained environment, blending
    promotes efficiencies and synergies by leveraging each component's
    comparative strengths, freeing funds for modernization while sustaining
    combat effectiveness, and effecting warfighting capabilities greater
    than the sum of its parts.

    Combat Wing
        The comprehensive evaluations in our ongoing transformation include
    examining our wing structure. Given all of the lessons gleaned from
    expeditionary operations over the past decades, we asked, ``Could we
    derive advantages in revised wing organization for both force
    development and combat capability?'' The answer was ``Yes,'' and we
    enacted changes to create the Combat Wing Organization (CWO).
        The central aspect of the CWO is the new Mission Support Group.
    This will merge former support and logistics readiness groups, and
    contracting and aerial port squadrons, as applicable. Within this
    group, we will hone expeditionary skills from crisis action planning,
    personnel readiness, and working with the joint system for load
    planning and deployment, to communications, contingency bed down, and
    force protection. Currently, all of these aspects exist in skill sets
    that none of our officers have in total. But the new expeditionary
    support discipline will address this, and provide our officers the
    expertise in all aspects of commanding expeditionary operations. With
    this reorganization, each wing will now have one individual responsible
    for the full range of deployment and employment tasks--the Mission
    Support Group Commander.
        The restructuring will retain the Operations Group; however, group
    commanders will become more active in the operational level of war.
    Squadron commanders will be role models for operators in the wings,
    ready to lead the first exercise and combat missions. Similarly, we
    will establish a maintenance group responsible for base-level weapons
    system maintenance and sortie production rates. Like their operator
    counterparts, maintenance squadron and group commanders will be role
    models for all wing maintainers. Meanwhile, medical groups will retain
    their current organization, although we are working changes to home and
    deployed medical operations for future implementation.
        Flying and fixing our weapons systems, as well as mission support,
    are essential skill sets. Each requires the highest expertise,
    proficiency and leadership. The new wing organization allows commanders
    to fully develop within specific functional areas to plan and execute
    air and space power as part of expeditionary units, while also giving
    maintenance and support personnel focused career progression. This re-
    organization does not fix something that is broken--it makes a great
    structure exceptional.

    Acquisition and Business Transformation
        To achieve our vision of an agile, flexible, responsive, and
    capabilities-based air and space force, we must transform the processes
    that provide combatant commanders with air and space capabilities. An
    example of this in action is the Air Force's efforts to carry out the
    responsibilities of DOD Space Milestone Decision Authority (MDA). The
    Secretary of the Air Force delegated those responsibilities to the
    Under Secretary of the Air Force, under whose leadership immediate
    benefit was realized. Adapting an effective process already in use at
    the National Reconnaissance Office (NRO), the Under Secretary
    instituted a new streamlined space acquisition program review and
    milestone decision-making process. This new process was used for the
    first time in August 2002 in developing a contract for the National
    Polar-orbiting Operational Environmental Satellite System. This effort
    creates an opportunity for the Air Force to apply performance and cost
    accountability to defense industrial firms through their chief
    financial officers and board of directors by linking executive
    compensation to contract performance.
        In addition to the major process changes for DOD space, the Air
    Force's Business Transformation Task Force directs and integrates
    further process improvement and adaptation. Core business and
    operations support processes--such as acquisition, logistics,
    maintenance, training, medical and dental, among others--are crucial,
    as they ultimately determine our overall enterprise effectiveness and
    directly sustain combat capabilities. An additional category of
    processes called ``enablers'' completes the Air Force enterprise.
    Examples of ``enablers'' include management of human resources,
    finances, contracts, property plant and equipment, and information. The
    enablers are important as they facilitate our core capabilities and
    determine the overall efficiency of our enterprise.
        The Air Force will enact business transformation from an integrated
    enterprise perspective, examining every process and associated link.
    Accordingly, we will employ industry best practices and identify
    management metrics to improve process efficiency without degrading our
    enterprise effectiveness; expand our customer's self-service management
    capability and free up needed resources for the operational
    communities; and provide real-time, accurate financial data for better
    decision making. Already, acquisition reform has effected notable
    improvements, including:
      --(1) Streamlined our acquisition and contracting regulations,
            replacing lengthy prescriptive sets of rules with brief
            documents that emphasize speed, innovation, sensible risk
            management, and elimination of time-consuming process steps
            that have little value. As previously mentioned, our new
            National Security Space acquisition process is an example of
            progress in this area.
      --(2) Created a Program Executive Office for Services to bring new
            efficiency to the growing area of services contracts. This key
            area, which accounts for nearly half of our procurement budget,
            had no prior centralized coordination and oversight.
      --(3) Developed and initiated System Metric and Reporting Tool
            (SMART), putting real-time program status information on
            everyone's desktop. This web-based application pulls data from
            dozens of legacy reporting systems to give everyone from
            program managers up to senior leadership direct visibility into
            the ``health'' of hundreds of acquisition and modernization
            programs. When fully deployed in fiscal year 2003, it will
            automate the tedious and laborious process of creating Monthly
            Acquisition Reports and possibly Defense Acquisition Executive
            Summary reporting to OSD.
      --(4) Empowered ``High Powered Teams'' of requirements and
            acquisition professionals to create spiral development plans to
            deliver initial capability to warfighters more quickly, and add
            capability increments in future spirals.
      --(5) Designed a Reformed Supply Support Program to improve the
            spares acquisition process by integrating the support
            contractor into the government supply system. Contractors now
            have the same capability as government inventory control points
            to manage parts, respond to base level requisitions, track
            spares levels, and monitor asset movement.
      --(6) Continued, with OSD support, expansion of the Reduction in
            Total Ownership Cost (R-TOC) program, to identify critical cost
            drivers, fund investments to address them, and generate cost
            savings and cost avoidance. We also created standard processes
            and a business case analysis model to use for initiatives
            within R-TOC. In fiscal year 2003, OSD allocated $24.9 million
            no-offset investments to R-TOC that will return $53.2 million
            through fiscal year 2008. A planned $37.1 million investment
            across the FYDP will save a projected $331 million in
            operations and maintenance through fiscal year 2009.
        These initiatives are only the beginning of a comprehensive and
    aggressive approach to reforming business practices. Our efforts today
    will have a direct effect on efficient and effective air and space
    capability acquisition, both immediately and in the future.

    Ensuring Readiness
        Integrating systems and expanding business practices will not only
    have dramatic effects on air and space capabilities, but also reduce
    readiness challenges. However, we still face daunting, but
    surmountable, obstacles. We must overcome a multitude of installations
    and logistical issues to secure flexible and timely execution of
    expeditionary requirements for joint warfighting.
        Reconstituting and reconfiguring our expeditionary basing systems
    and wartime stocks is a critical element of our force projection
    planning. While we made significant strides in funding, we require
    additional investments in bare base systems, vehicles, spares,
    munitions, and pre-positioning assets. Our infrastructure investment
    strategy focuses on three simultaneous steps. First, we must dispose of
    excess facilities. Second, we must fully sustain our facilities and
    systems so they remain combat effective throughout their expected life.
    Third, we must establish a steady investment program to restore and
    modernize our facilities and systems, while advancing our ability to
    protect our people and resources from the growing threat of terrorism
    at current, planned, and future operating locations--at home or abroad.
        We are making progress. Improved vehicle fleet funding allowed us
    to replace some aging vehicles with more reliable assets, including
    alternative fuel versions to help meet federal fuel reduction mandates.
    Targeted efficiencies in spares management and new fuels mobility
    support equipment will improve supply readiness. In addition, our
    spares campaign restructured Readiness Spares Packages and repositioned
    assets to contingency sites. Moreover, to increase munitions readiness,
    we expanded our Afloat Prepositioning Fleet capabilities, and continue
    acquiring a broad mix of effects-based munitions in line with the
    requirements of all TF CONOPS.
        Finally, our ``Depot Maintenance Strategy and Master Plan'' calls
    for major transformation in financial and infrastructure capitalization
    to ensure Air Force hardware is safe and ready to operate across the
    threat spectrum. To support this plan, we increased funding in fiscal
    year 2004 for depot facilities and equipment modernization. We also
    began a significant push to require weapon systems managers to
    establish their product support and depot maintenance programs early in
    the acquisition cycle and to plan and program the necessary investment
    dollars required for capacity and capability. Additionally, we are
    partnering with private industry to adopt technologies to meet
    capability requirements. The results from these efforts will be
    enhanced, more agile warfighter support through the critical enabler of
    infrastructure.

    Expanding AEF Personnel
        The attacks of 9/11 significantly increased workload and stress in
    a number of mission areas for our expeditionary forces. Manning for
    these operations is drawn from our existing AEF packages. In order to
    accommodate increased contingency requirements we are exploring options
    to augment the existing AEF construct. Recent and ongoing efforts to
    maximize the identification of deployable forces and align them with
    AEF cycle, assisted in meeting immediate critical warfighting
    requirements. However, some career fields remain seriously stressed by
    the war on terrorism. Accordingly, our efforts focus on changing
    processes that drive requirements not tuned to our AEF rhythm. We
    developed formulas to measure, and gathered quantitative data to
    evaluate, the relative stress amongst career fields to redirect
    resources to the most critical areas. We also began a critical review
    of blue-suit utilization, to ensure uniform airmen are used only where
    absolutely necessary, and maximize the use of the civilian and contract
    workforce for best service contribution and military essentiality.
        We are refocusing uniformed manpower allocation on our distinctive
    capabilities to reduce the stress on our active force. Additionally, we
    are carefully considering technologies to relieve the increased
    workload. These efforts exist within our longer-term work to
    reengineer, transform, and streamline Air Force operations and
    organizations, and have allowed us already to realign some new recruits
    into our most stressed career fields.

    Summary
        As the two mediums with the most undeveloped potential, air and
    space represent the largest growth areas for national security and the
    greatest frontiers for joint warfighting. As such, air and space
    operations will play an ever-increasing role in the security of America
    and her allies. The Air Force will exploit technology, innovative
    concepts of operations, organizational change, and our ability to
    embrace creative ideas and new ways of thinking. We will bring to bear
    the full suite of air and space capabilities for tomorrow's joint force
    commander--drawing from every resource, integrating closely with all
    services, and overcoming any obstacle to succeed.

                                  NEXT HORIZON

        The events of the last year have emphasized the dynamics of a new
    international security era. The decade of new states following the Cold
    War has been followed by the rise of non-state actors, many following a
    path of aggression and destruction. Yet, just as America adapted to new
    global dynamics in the past, we will again confront emerging challenges
    with confidence and faith in our ability to meet the demands of
    assuring freedom.
        The Air Force remains dedicated to drawing on its innovation,
    ingenuity, and resolve to develop far-reaching capabilities. The
    ability to deliver effects across the spectrum of national security
    requirements is the cornerstone of the vision and strategy of Air Force
    planning and programming. In conjunction, and increasingly in
    integration with ground, naval, marine, and other national agency
    systems, the Air Force will play a central role in elevating joint
    operations. We recognize the greatest potential for dominant American
    military capabilities lies in the integration of our air and space
    systems with those of other services and agencies, and our success in
    this objective will be evident in every mission to deter, dissuade, or
    decisively defeat any adversary.

        Senator Stevens. Thank you very much. General, you are
    right about our generation. Most of our members were drafted
    for that war, and this force is all volunteer, and it is a
    different generation, and we do stand in awe. I see those young
    men and women walking across that desert carrying those packs,
    which includes all that protection gear for chemical and
    biological warfare, and to see what they're doing, we have to
    marvel at them. You have done an excellent job in training them
    and they are demonstrating that training now, and I just can't
    tell you how proud we are of them.
        I am a little worried about what you said, though, Mr.
    Secretary, about the age of the equipment that our young people
    are flying. I don't know many people other than a few cracks,
    that are going to work in a 50-year old car.
        Senator Burns. Me.
        Senator Stevens. I already said cracks.
        But when we look at this, really the genius of the Air
    Force is not those who are pilots, with due respect. It's the
    mechanics. These people are doing an enormous job. I'm just
    amazed that we don't have 50 percent of our planes red-lined
    and not capable of flying. You're saying they were flying in
    the eighties and in wartime, that's simply an amazing record
    and I think somehow you ought to get a really outstanding kind
    of award for those people maintaining those airplanes and
    keeping them flying.

                                767 TANKER LEASE

        I am compelled to ask, Mr. Secretary, about the decision on
    the tankers, because as you know, those tankers now are
    averaging 44 years of age. Some of them were opposed by Harry
    Truman, they actually go back to those days, the fifties and
    late forties. To have an average of 44 you have to have a few
    out there of that age. Now what about the tanker decision in
    terms of leasing the tankers?
        Secretary Roche. Well, the Secretary of Defense has really
    gotten himself involved in this, and it's a different approach,
    as you know. The Air Force believed it had a good proposal, it
    did require a lease buildup that had a high peak and then came
    back down again. The things that he has sort of fed back to us
    is the sense that yes, there is a real need for tankers. The
    notion that planes can fly forever, I think we've dispelled.
    And by the way, we recognize that it was the Air Force that
    sent a study over a few years ago that said replacements would
    be required by 2030. That was a paper study done by analysts
    who unfortunately never lived with real objects like ships and
    airplanes, and understood corrosion and understood delaminating
    aluminum. So we're overcoming some of our own bad promotion.
        He fully agrees with that. He also recognizes that re-
    engining very old airplanes doesn't solve the problem and it's
    not the engines that are the problems, it is the corrosive
    effects to the main aircraft. And he has asked his staff to
    work with us to see if there is a way that we can satisfy the
    needs to begin tanker replacement early and at the same time
    not have such a big bump in the budget, and we are working with
    his staff.
        It is now a very congenial working relationship. It is no
    longer--it never was really adversarial, it was more gee, this
    is so odd, so different, this lease notion, but now we're
    taking a look at leases, combinations of things, we're working
    very much together, and I would hope we can have something back
    to him so that he can make a final decision within the next
    couple of weeks. But, the war is taking up a lot of his time,
    unfortunately.
        Senator Stevens. Well, it is a difficult issue to address
    during a war, but very clearly, we're going to get to the point
    where we have some capability of rotating some of those older
    assets out of this tanker fleet, we're going to have to get new
    ones in there, and I am disturbed about that.

                                 C-17 AIRCRAFT

        What about the C-17s? Are those the workhorse today of the
    Air Force? Last year we thought we authorized 15 new aircraft
    and there are only 11 in this budget.
        Secretary Roche. Sir, last year when we heard you
    authorized and directed us to put in money for 15 for this
    year, we were doing so, it was causing a budget difficulty that
    we discussed with the Office of the Secretary. We noticed that
    because of what you did last year, you put a lot of money up
    front, and that allowed for the fact that 15 airplanes had come
    off the production line every year very smoothly, to the
    position that if we were to buy the 15 this year, four of them
    would go into backlog. In other words, they wouldn't be built
    in 2004, they would really be built in 2005. And so we----
        Senator Stevens. Why? I don't understand that.
        Secretary Roche. Because 15 come out each year and because
    of prior funding, there are 15 about to come out. There are
    four already in backlog. If we would do 15 more, we only
    increase backlog. By ordering 11, they all get built in 2004
    and then we continue because of the fact that there is an
    existing line. But we ask that this only be considered, this
    proposal. We recognize that we did not do exactly what we were
    directed to do.
        The reason that you had the concerns last year was we were
    busting limits on advance procurement in a number of years.
    Because of the cash infusion that was made by the committee
    last year, you have set up a situation where we can in fact
    save the taxpayer a good bit of money by having this very
    smooth and still producing 15 a year, but not spending money a
    year earlier than necessary.
        Senator Stevens. How many total are you going to acquire
    under this new approach?
        Secretary Roche. It would be the same number of airplanes
    as before, sir. It would be 60 in this multiyear plus the
    others, for a total of 180.
        Senator Stevens. You're not reducing the number at all?
        Secretary Roche. No, sir.
        Senator Stevens. The final number remains the same?
        Secretary Roche. Yes, sir.
        Senator Stevens. Senator Inouye.

                        AIR FORCE ACADEMY INVESTIGATION

        Senator Inouye. Thank you very much. General Jumper, I
    would like to begin with your last item, the Academy. We have
    been told that the Air Force has rejected an outside review
    panel to look over the situation and make their own assessment.
    Some of my colleagues have been inquiring, why reject this
    proposal. Can you tell us why?
        General Jumper. Sir, first and foremost, we believe that
    this is the Air Force's problem to fix. We do have the
    Department of Defense Inspector General (DOD IG) in with us on
    this investigation and they are doing a portion of the
    investigation to look into the cases that have arisen, to help
    us with that part of it. The Secretary and I have been out
    there personally, we have had our team out there three times.
    We have gotten to the point now where the data that we're
    getting is repetitive data, and we think we have a good
    understanding of what the problems and issues are. We're being
    transparent on this, we're sharing what we have with the
    committee.
        But this I believe, sir, is the responsibility of the
    Secretary and myself to go fix this and we intend to do that.
    And we are sharing our data, but this is our responsibility.
    We're the ones that are accountable, sir, and for our own sake
    and the sake of our Air Force, we want to press on to this
    solution.
        Secretary Roche. May I comment, sir?
        Senator Inouye. Please.
        Secretary Roche. The interesting thing about the Academy,
    Senator, is it's not a university. We have 4,200 cadets,
    typically between the age of 18 to 23, and we don't have
    graduate students, married graduate students, and it is not a
    university. The only thing that is like it is West Point, the
    Naval Academy, the Coast Guard Academy, and possibly the
    Maritime Academy.
        When you have a gender distribution of 84 percent men and
    16 percent women, it is very different than at an American
    university which is now over 50 percent women and under 50
    percent men.
        It's in a military culture. We're taking young people from
    around the United States and putting them together. The thing
    that we looked at when we went at this is, if we were to have a
    safety problem or something else, we would want to learn about
    the problem and deal with it ourselves rather than sending it
    to some outsiders who may not understand the culture as well.
        The second thing we have going for us is we now have a
    cadre of women officers, spectacular officers, and the first
    graduates from 1980 are now Colonels or just about becoming
    Colonels. We have maintainers who are Major Generals, we have a
    number of women officers in place, and we felt that the experts
    on military life, the Academy life, problems of sexual assault,
    et cetera, we had the best experts in the world to deal with
    that, women who had attended our Air Force Academy, who
    understood it, who understood our Air Force, who could help us.
    And they have been wonderful in helping us.

                                    RESERVES

        Senator Inouye. Thank you very much. Mr. Secretary,
    according to the latest reports, 36,200 reservists are now
    deployed throughout the world, including a high portion of
    critical specialists. The law presently limits service to 24
    months, and there is some indication that we might be facing
    shortages. Do you have any plans to request extending the 24
    months?
        Secretary Roche. At this stage, Senator, what we have done
    is when those were mobilized, we put a program in to demobilize
    as rapidly as we could, taking into account the plans of the
    individual reservists. You have to give them some certainty. If
    they go to their employer and say they're going to be gone for
    6 months, sometimes it just causes a problem if you send them
    back in 3 months. So we try to work with them, we try to make
    the transition in, smooth, and transition out, smooth.
        We had gotten that number down to under 14,000. Of that,
    9,000 were in force protection, protecting bases, a number of
    bases here, plus all the new bases we have created overseas. We
    recognize that we have until July 2003 to address that problem
    and that's why you've seen us effectively hire 8,000 Army
    guardsmen to protect our bases. I believe if you go to Bolling
    Air Force Base now, you will find it's our Army colleagues
    protecting the base, and this was something that was worked out
    between General Jumper and General Shinseki, and it's a
    wonderful thing to do. That takes some of the pressure off that
    9,000.
        It's our hope this war will be over soon enough that we can
    once again keep our word to these men and women and get them
    back to their civilian jobs as soon as we can, so at this stage
    we don't see a request for extension. We would rather be
    motivated to find ways to get them back to their normal life.
    We are concerned, that if we overwork the Guard and Reserve,
    their ability to recruit will be very, very difficult.
        We are now operating with something like 1,800 volunteers,
    which is wonderful. These are men and women who see a chunk of
    time, they can give it to us, and they have been doing so.

                            PERSONNEL TRANSFORMATION

        General Jumper. Sir, if I might add, as part of Secretary
    Rumsfeld's personnel transformation, he has asked us to go out
    and find ways to make sure that people who are wearing the
    uniform are doing jobs that require people to be in uniform.
    This is another part of Secretary Roche's efforts, and in that
    effort we have gone out and found about 12,000 people in our
    Air Force who we think their job could be done in another way.
    We won't get all of those back, but I think we will get a
    goodly portion of those back. Also, technology can help us out
    with things like guarding bases. Those are the things we're
    looking at right now to see if we can make sure that the demand
    for people in uniform is done correctly.
        Senator Inouye. Mr. Secretary, we have been advised that as
    a result of the long period of deployment, some of your
    reservists are experiencing financial problems. Is the
    Department planning to do something about this?

                      GUARD AND RESERVE FINANCIAL PROBLEMS

        Secretary Roche. Not that I'm aware, Senator. In some cases
    that I have been able to get into personally, I've known
    employers and I've been able to call employers, but I don't
    know enough. We have a program borrowing from World War II
    where you recall, sir, that in World War II, the services
    honored employers who helped their employees get to war. We now
    have gone to our reserves and guardsmen--and by the way, we're
    not allowed to keep a list of their employers for some privacy
    reason--but we've asked them if they would give us the names of
    their employers, and to each of them we have sent a thank you
    letter and a special pin with the E.
        We will shortly do the same thing for parents, for parents
    being able to walk around and letting us know that their son or
    daughter is serving.
        With respect to financial conditions, both the Guard and
    Reserve try to take into account those members who have that
    problem, and it is a way to relieve them of volunteers, or if
    there's some other way to get them back to the jobs as soon as
    they can, they do. Right now, it's a very stressing thing and I
    don't know of any particular program that the Department is
    looking at to worry about the financial conditions when these
    men and women come on active duty and leave their jobs.
        General Jumper. Senator, if I might add, as you well know,
    there are a great number of employers out there that take the
    burden themselves to make up the difference between the salary
    that the member gets when he or she comes on active duty and
    the salary they had before. These are great Americans out there
    who are helping carry this burden. Not all of them can afford
    to do that, and it is a concern, sir.

                                 IRAQI AIRCRAFT

        Senator Inouye. Like most Americans, I have been following
    the events as they unfold in Iraq, and I have been very
    impressed by the efficiency and the accuracy of your personnel.
    It appears that possibly as a result of that, there are no
    Iraqi aircraft flying around. Does it mean that the Iraqis have
    no aircraft left?
        General Jumper. Sir, the Iraqis do have more than 100 very
    capable aircraft left. I mean, one could conclude by looking at
    the actions over there that they actually threw up their hands
    and gave up as the first order of business. I have been
    surprised at the lack of coordination that I have seen in their
    response both with their surface to air missiles and their
    airplanes. They do have capable airplanes.
        And as you know, Senator, as the Secretary mentioned,
    starting back in June or so, we started working away with a
    more aggressive enforcement of United Nations Security Council
    resolutions. In responding to violations that put command and
    control communications lines, surface-to-air missiles in the
    wrong areas, we were prompt about taking those out, and we
    think that possibly has had an effect on their ability to
    organize a responsive defense.
        I would hasten to add that you still don't know what you
    don't know. Although this is unexplained, they still have
    capability down there, and we have to certainly respect that,
    sir.
        Senator Inouye. May I ask one more? Mr. Secretary, you
    mentioned the GPS jammers. Are they the ones that the Russians
    provided the Iraqis?
        Secretary Roche. May I answer that off line to you, sir? I
    don't know if I can answer that in open session. But I would
    like to reemphasize that we find it wonderfully ironic that we
    use GPS bombs against GPS jammers, and the bombs worked just
    fine, Senator.
        Senator Inouye. There must be something wrong.
        Secretary Roche. Or something good about what you
    appropriated 4 years ago, sir.
        Senator Inouye. Thank you, Mr. Chairman.
        Senator Stevens. We do follow the early bird rule. Senator
    Durbin.

                               AIR FORCE ACADEMY

        Senator Durbin. Thank you very much, Mr. Chairman. I would
    like to return to this issue about the Air Force Academy for a
    moment. I've followed it and I've spoken to my colleague
    Senator Allard, who I think has really been a leader on this
    issue, and he first had one of the young women come forward. He
    has dealt with this responsibly and I think really drawn our
    attention to it as a national issue.
        It is a different issue from this side of the table than
    most, because for 20 years I have been sending young men and
    women from my congressional district in my State to the
    academies. They were anxious to be appointed, they wanted to go
    there, and I wanted to send them. And I really looked hard to
    find young women who would be part of our modern military,
    because I think that's an important element. And now we have
    this scandalous report which may result in some dramatic
    changes at the Academy.
        Mr. Secretary, I would say to you that I wish you would
    step back a moment from your earlier comment and think about
    what you told us. When Senator Inouye asked you about an
    outside review you said that these outsiders would not
    understand our culture. That is a troubling statement, because
    it is the culture of the last 10 years which has allowed this
    scandal to grow rather than to disappear, and that culture
    needs to be changed, clearly.
        When we are talking about bringing in the experts, I think
    you made a good point. We could bring in women who have served
    in the military, presently serve in the military, who could
    give excellent insight into how this culture could be changed.
    But I hope that you will concede to me that change is necessary
    in the culture and understand that the acceptance of it is just
    not acceptable.
        Secretary Roche. Senator, thank you very much for your
    question, because I clearly did not communicate. The culture at
    the Academy absolutely must change, and I could go on for a
    great length of time agreeing with you on point after point
    after point.
        I meant the culture of the United States Air Force. A young
    woman on one of our regular Air Force bases, an airman first
    class, is far better protected, far better dealt with when a
    problem emerges, the chain of command goes into action very
    quickly. That doesn't mean we don't have a problem now and
    then; it is, we are very confident when the chain of command is
    held responsible and accountable to all parties, and that we
    have crisis response teams, and we have first sergeants and
    senior enlisted. She is a lot better off than is a female today
    at the Air Force Academy.
        Our Air Force culture is very good. The Academy culture
    must change. And the reason the two of us have taken this
    personally is that we recognize that this is a culture issue.
    You can't just fire a couple of generals and think the problem
    is solved because you would have missed the issue.
        It goes back to, what struck us most in the cases we have
    over a 10-year period, there are cases there, some we
    prosecuted, some with insufficient evidence, there are three of
    the 23 rape allegations made over the last 10 years where the
    young women recanted and said it never happened. That's bad.
    But when we start having officers we know come up to us and say
    General, there is something you need to know, when I was at the
    Academy, this is what happened to me, that really hurts us,
    because it means that women have been victims in the United
    States Air Force.
        We want any assailant out of our Air Force. If there is
    someone out there attacking our young airmen, we want him out,
    and we want them out, and we want to help these young women
    help us cull these people out. The culture, you will see this
    when we release our initial set of directions, and we will
    still hold these individuals accountable, but we are going
    right at the culture. But we recognize that you don't change a
    culture with one member, it means starting from the top, which
    means it starts with us. It means we go back out there over and
    over and over.
        We both have been involved, we changed the honor system
    last year, we changed the recruiting athletics system, we
    changed the curriculum. This area we thought was handled, but
    it clearly was not, and it goes over a long period of time. In
    1993, this all occurred and we thought we had solved it, but
    those actions had secondary effects that made some of it worse,
    so we absolutely have to address it now as a cultural problem.
        It has to be addressed now, because in less than 90 days,
    Senator, including some people you have nominated, they will
    have a new class beginning, including 189 women, there will be
    a total of 714 women at the Academy in the fall. We have to
    make the first steps so that the families of these young women
    coming in June can believe that their daughters are okay and
    also the families of the cadets will believe that due process
    is going to be applied.
        Now having done the initial set of moves, we have the
    experts--for instance, the Federal task force on domestic
    violence, which looks at domestic violence against another in a
    family setting, which very much replicates it. We're going to
    change it, but we are going to make changes immediately and
    then start turning somewhere, as compared to if I need 10--
    which experts, this set of experts, that set, wait for 6
    months, and meanwhile have another class coming to the Academy.
        Senator Durbin. This is a very serious issue and I'm glad
    for your response, because I think it helped to explain what
    you said earlier.
        I hope that in the course of this, both you and the
    General, in your commitment to transparency, will bring in
    those credible parties who will help to restore the integrity
    and the reputation of a great institution, the U.S. Air Force
    Academy, and I hope that you will do that.

                           MEDICAL EVACUATION MISSION

        I have one other issue that I will raise if I have a minute
    here, Mr. Chairman, I see I have a very brief period of time,
    and that was our discovery that in the budget request, there is
    a proposal to discontinue the so-called Nightingale Mission,
    the aeromedical evacuation mission, and to privatize it, to
    contract it out, and to suggest that we would use available
    space on C-130s and C-17s to move people who are injured or
    ill, where at the present time we are using C-9s dedicated to
    that purpose.
        Despite my interest in it because of Scott Air Force Base
    and obvious reasons, it does raise a serious question to me as
    to whether or not we can privatize and contract out something
    so critically important as the movement of personnel who are
    ill or very sick or injured or in some way have been victimized
    by combat. And I wonder if we could have your response to that,
    and if we could expand the conversation to talk about some
    options that might be considered.
        Secretary Roche. Sir, let me let General Jumper start, and
    this is frankly the question we hoped you would ask us.
        General Jumper. Sir, I know of no effort out there to
    privatize the medical evacuation. I think the effort, first of
    all, starts with the C-9s and the age of the C-9s and the
    significant costs to either bring them up to current Federal
    Aviation Administration (FAA) standards--they don't meet any of
    those standards, or to replace them.
        When we have out there active in the circuit every day our
    whole fleet of strategic airlift capability, our C-17s, our C-
    5s and our C-130s, that are moving around at present more than
    100 countries every day, that provide the opportune lift to get
    patients from one place to another. That's the thing we hope to
    be able to take advantage of. As a matter of fact, we did not
    use the C-9 in any of the evacuations during Operation Allied
    Force in Kosovo, nor in Afghanistan, because of the limitations
    of that kind of an airplane.
        So, we have been successful in taking advantage of our air
    fleet. I will make sure that what I said to you about
    contracting out is correct, because that's the first I've heard
    of such a thing, but I have been surprised before.
        Senator Durbin. If I could mention one other thing, Mr.
    Secretary. I'll end here because my time is up. And that is,
    while I had an opportunity to go with the congressional
    delegation to Afghanistan and flew in a C-130, great crew,
    terrific performance, pretty old plane, but to put litters in
    the back of that plane for people who are sick, I don't think
    is an adequate response and I don't think it mirrors the
    quality of care we would ask from the Air Force and many
    others.
        Secretary Roche. If I may, Senator, we may every now and
    then inside the United States use an air ambulance service for
    a one-time situation, so that may be the contract, but
    generally we are not. The C-130Js are much newer. The preferred
    plane is the C-17, which we can in fact, and we have these
    modular systems for the medical pallets. We've both talked to
    the Surgeon General's people who we're dealing on the aircraft,
    and with the Air Mobility Command (AMC) commander and United
    States Transportation Command (USTRANSCOM) at Scott Air Force
    Base. C-9s are old, these other planes are far more viable in
    getting around, and it is the judgment of the Air Mobility
    Command that we can do this with the other aircraft.
        The one area that we are working on together is in the
    Pacific, the bases are so far apart for our own active duty and
    dependents, getting them to specialized hospitals, let's say
    Kadena or someplace else, that may require us having to convene
    with some other aircraft.
        Senator Durbin. Thank you, Mr. Chairman.
        Senator Stevens. Senator Domenici.
        Senator Domenici. Thank you very much, Mr. Chairman.
    General, it's good to see you, and Mr. Secretary, it's great to
    see you again.
        Obviously this is a day when we have talked about parochial
    issues and important issues in our home State, and we wonder
    whether it's even the right forum because our troops are at war
    overseas, it seems almost insignificant that we talk about
    local issues such as Holloman or Cannon or Kirtland.
        I want to join in complimenting both of you as the leaders
    of our Air Force. The performance of our troops in Iraq is so
    spectacular, it is difficult to comprehend. I never thought
    we'd see our forces have such an advantage. I've been here 30
    years and I get to follow development and evolution of our
    Military Forces, but I frankly never believed that we could
    move so exponentially in 10 years with reference to quality and
    technology. It's obvious that you're doing it right and we are
    proud to be part of it, at least in paying attention and doing
    what you ask us to do.

                                   PROMOTIONS

        And Mr. Secretary, I'm extremely pleased that we have
    somebody as competent as you there. I have only one observation
    about the makeup of the hierarchy of the Air Force. I'm a real
    sucker for big science, I love big science, and we have a lot
    of it in New Mexico. We have the directed energy activities at
    Kirkland Air Force Base and it's the headquarters for laser
    research, and I went out there recently for a visit, and you
    know what I would like to see? I would like to see a couple or
    more two-star or three-star generals that are not just pilots
    but are Ph.D.s in chemistry, physics and engineering.
        Secretary Roche. Oh, I agree with you.
        Senator Domenici. I believe you ought to do that.
        Secretary Roche. As a Ph.D. myself, I think it's a great
    idea.
        Senator Domenici. I think you ought to just promote the
    brightest Air Force people and send them to Massachusetts
    Institute of Technology (MIT), give them whatever they need to
    get a Ph.D., and then let them come. What confidence we'd have
    if they were walking around the laser facility instead of a
    colonel. He's great, but he has to relate to an engineering
    Ph.D. from a school, and the few times I have seen a one-star
    general, I've thought how magnificent that is. I urge that you
    start a program to encourage them, give them extra incentives,
    get 8 or 10 of them graduated from California Institute of
    Technology, get the best and get them out to our Air Force lab,
    that's what we ought to do.

                       AIR FORCE INSTITUTE OF TECHNOLOGY

        Secretary Roche. Thank you for your support, Senator. We
    have reinvigorated our Air Force Institute of Technology
    (AFIT). We have ended the notion that you had to go get a paper
    master's program in order to be promoted. We have a program now
    that will send every one of our officers either to a graduate
    school or to a similar experience. We are trying to take our
    scientists and engineers, with your help, we're giving them
    bonuses. We're trying to make their careers more exciting.
        We have had a whole rerecruiting campaign of these young
    people, because when you go to one of our labs, the Air Force
    Research Laboratory (AFRL), or go to the laser facility at
    Kirtland, as we've both done and did together, you see some of
    these young officers who have all of the brights in the world,
    they love what they're doing, they love the fact that their
    work is going to be meaningful to somebody in combat, and
    somehow we lose them, and we can't lose them.
        And I'm proud to say that even though my partner is a
    fighter pilot, he was the first to say well, for heaven's sake,
    why don't we get them their doctorates and keep them.
        Senator Domenici. Mr. Secretary, you wouldn't lose those
    scientists, those military guys if they had two stars on them
    and they were scientists. You're losing them because they are
    only colonels and they don't want to stay there very long, and
    they're masters, they're not Ph.D.s. If you get them up there,
    they will stay there, and if you have them in that hierarchy,
    they will be glad to stay.
        Secretary Roche. We need more.
        Senator Domenici. I want to ask about the Predator.
        Senator Stevens. Would the Senator yield for a second?
        Senator Domenici. Yes.
        Senator Stevens. Why don't we pay them the equivalent of
    being generals instead of paying them as colonels? Why don't
    you jump their rates of pay as opposed to their grade in
    service?
        Secretary Roche. It's not a bad idea. We're talking about
    bonuses in the system for the younger ones. We take science and
    engineering seriously. Can we take that to study, sir?
        There is also a point, though, in making them leaders and
    showing the young officers that there are role models ahead. We
    have a couple. We could do more because we are so highly
    dependent on technology for our service.
        Senator Domenici. If you did that, you would have the
    pilots wondering why they are being discriminated against, so
    you don't want to do that. In any event, it seems to me that
    this is an idea whose time has come.

                                    PREDATOR

        In any event, let me talk about the Predator. First of all,
    when do you expect the selection process to be completed, and
    can you give us an update on the environmental assessment
    that's being performed and for bases recommended for the
    Predator squadrons, either of you?
        General Jumper. Sir, there is an ongoing environmental
    assessment right now for where we might go with the Predator.
    Our plan right now as we're continuing to build Predator at a
    rate of about two per month, to maintain Indian Springs as our
    center of excellence for the Predator Unmanned Aerial Vehicle
    (UAV). When we start building the numbers up, we will make
    decisions for the future about where and how to expand out the
    criteria.
        As you well know, it has to do with being adjacent to
    uncontrolled airspace, the weather has to be decent, the winds
    have to be within a certain limit, et cetera, et cetera. So
    those things are ongoing, sir, but we don't have a timetable.
        Secretary Roche. They're also basing more of them overseas
    than they are at home right now, sir.
        Senator Domenici. Yes, I understand, but sooner or later we
    will have them based at home. And if we need weather plus all
    the rest, it looks like Holloman has an exciting future in
    terms of that.

                             MELROSE BOMBING RANGE

        Let's talk about the Melrose Bombing Range over on the east
    side of New Mexico and its supersonic testing capacity.
    Supersonic land facilities are very, very important. They're
    doing all that testing now over water. What's the status of the
    study with reference to Melrose and the possibility for it
    having supersonic capacity?
        Secretary Roche. Sir, I have just come upon this and I'm
    not up to speed on it. May I get back to you on that?
        Senator Domenici. Absolutely.
        [The information follows:]

                             Melrose Bombing Range

        Sir, my staff has worked this issue with Air Combat Command
    and has completed a draft of a study to determine the
    requirements to extend supersonic capability at Melrose Range.
    The study is now in the process of review to ensure accuracy;
    we will provide a copy within the next 30 days.

        Secretary Roche. And by the way, the issue you raised,
    however, is a critical one. Oftentimes we think we will have a
    range but then because of restrictions we can't go supersonic.
    As we move to an era of super cruise, it becomes terribly
    important to us to be able to do it over places other than
    water.
        Senator Domenici. Well, Melrose is over there by Cannon,
    but it has served the purpose of Holloman, Cannon, and some
    from Texas. It's a very big range. We acquired it so as to
    create diversity about 15 years ago, and I think it would be
    looked at for supersonic land testing, which people are more
    than willing to take a look and listen, but we have to do it
    right so we don't surprise them if in fact it's chosen.

                                     CV-22

        Now what about the CV-22, what's the current status of the
    testing and what is the latest schedule for training squadrons
    at Kirtland, if either of you know?
        Secretary Roche. The CV-22, sir, is in a position where
    it's having to prove itself, and the Navy and Marine Corps in
    fact have the lead. We have our own special op reader Air Force
    personnel associated with it. It's a testing program now that
    has been backed into test, it is encouraging them, but it still
    has a way to go. We believe that if it tests out well, we would
    like to have it in our Air Force Special Operating Command
    (AFSOC). Whether or not we would use it for combat search and
    rescue is still to be determined, because it has some issues
    about how it flies close to the ground and may not make it
    worthwhile. We put on hold what we would do to get them until
    we find whether or not this program is something that we in
    fact will buy, and is one where we and the Marine Corps and the
    Navy would be making a decision and making a recommendation to
    the Secretary on it after the test program is over. But as you
    know, it has had a very rough test program.
        Senator Domenici. General, did you have anything to add to
    that?
        General Jumper. No, sir, I can't add to that.
        Senator Domenici. Thank both of you very much. Thank you,
    Mr. Chairman.
        Senator Stevens. Thank you. Senator Shelby.
        Senator Shelby. Thank you, Mr. Chairman.

                            PREDATOR HELLFIRE SYSTEM

        General Jumper, could you talk a little bit, maybe not
    everything, about the significance of the joint coordination
    that took place between the Air Force and the Army to engineer
    and integrate the Predator Hellfire system?
        General Jumper. Yes, sir. We----
        Senator Shelby. I think that's a great accomplishment.
        General Jumper. It's a great story. The Predator story is a
    long and tortured one. It came to us in 1996 as a technology
    demonstration, and we took it over years and developed it into
    what it is, to include the first step of putting a laser
    designator on it so it actually designates targets on the
    ground, and then shortly thereafter by putting the Hellfire
    missile on it.
        Of course we had to go to the Army to work the integration
    of the Hellfire missile and we had superb cooperation.
        Senator Shelby. They worked that out at Redstone, didn't
    they?
        General Jumper. Absolutely, out at Redstone. And with the
    scientists at Redstone actually to do the warhead enhancements
    that we have done actually just over the last year or so. And
    the scientists actually at Redstone were the ones that helped
    us with that development. We are continuing to work with them
    for even future versions of the Hellfire that will overcome
    some of the limitations of shooting it from higher altitude,
    and that work continues, sir.
        Senator Shelby. What you're basically doing is utilizing an
    organic laboratory.
        General Jumper. Absolutely.
        Senator Shelby. Mr. Secretary?
        Secretary Roche. I was going to say, we were both just
    tickled pink. Our boss has told us, sometimes I see Hellfires
    going into buildings and people coming out, and you know, Don
    Rumsfeld says, why are they coming out? And we turned to
    Huntsville and asked for some help, and the speed with which
    they built the sleeve was just incredible.

                                 AIR UNIVERSITY

        Senator Shelby. Thank you. I want to switch over to the Air
    University, General, or to both of you. Both of you know that
    the Air University at Maxwell has seen a dramatic increase in
    their training responsibilities, particularly for Reserve
    Officer Training Corps (ROTC) scholarship recipients. I brought
    this issue up with you before last year and I want to get your
    thoughts again this year on how Maxwell is doing in meeting
    their training challenges and do they have the funds to
    continue this? I think it's very important to the Air Force.
        General Jumper. Sir, let me just say, and you know this
    very well, over the last few years at the Air University, we
    have added the doctrine center, we've added the air and space
    basic course, and we've increased the student flow through
    there, and in every school that's housed there, in addition to
    our law school, our chaplains, et cetera, et cetera, they all
    go through Maxwell Air Force Base and all of its magnificent
    history going back to the tactical school in the thirties.
        We believe that everything there is adequately funded. As a
    matter of fact, as we continue to find new ways to phase
    students into the Air University that are in line with our
    rotation cycles overseas, we have made accommodations for our
    entire Expeditionary Aerospace Force concept so that throughout
    the year we can phase students in there in modules, if you
    will. That work is ongoing there, and that will increase the
    student flow. We have looked at a whole new way to do the
    correspondence courses that we have. Again, technology and
    other things invested into the Air University. These things are
    ongoing, sir, and it's really tremendous out there.
        Senator Shelby. Thank you. Thank you, Mr. Chairman.
        Senator Stevens. Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you. We appreciate
    very much the leadership and outstanding service that our
    witnesses are providing to our country, particularly the
    leadership of the Air Force in this challenging time.

                                 C-17 AIRCRAFT

        When General Myers was here the other day, the Chairman of
    the Joint Chiefs of Staff, he talked about and commented on the
    unanticipated wear and tear on the C-17s and the aging of the
    C-5 fleet as a result of the high operating tempo during this
    war against terror. Do you believe the planned procurement of
    C-17s and upgrades to the C-5s are sufficient to meet our
    future airlift needs?
        Secretary Roche. Senator, I will start and then ask General
    Jumper to comment. The C-17 is one of those airplanes that you
    dream for. We accepted it one day and in 48 hours it's in the
    air and working. It has just been a workhorse, it has been
    terrific, and I have had the pleasure of flying on them. It has
    just proven what people said could be done was done, even
    though the program, as the chairman knows well, went from 220,
    cut to 110, cut to 40, almost zero, almost zero, almost zero,
    limped to 40, 80, boom, now 120 going to 180.

                                  C-5 AIRCRAFT

        We are going to take the C-5, the C-5Bs and modernize
    those. The question that we face is to what degree can we take
    the C-5As and fully extend their life usefully, as compared to
    just creating another maintenance stream for a long period of
    time that becomes too costly. We will take and diagnose two of
    the Bs, then take a look at an A or two, we are creating an
    air-worthiness board which parallels what the Navy does in its
    board of inspection survey, because we now have so many old
    airplanes we need to put together teams of real experts on
    materials, structures, to be able to advise us, to say this
    aircraft by hull number has to be retired.
        If we cannot get a good answer by modernizing some of the
    C-5As, recognizing we do all 50 of the Bs, then we will have to
    determine how many more C-17s are required to make up the
    shortfall in the lift requirements that we have. That is our
    current plan. Meanwhile, the C-17s are on multiyear, going
    along fine. We will review those other studies, and we should
    be able to find out and understand what it requires to
    modernize the As and how many of them we could modernize, and
    then do all the Bs, and then make a decision between doing the
    As or more C-17s.
        General Jumper. Sir, if I might add, the objective out
    there from the mobility requirement study is 54.5 ton miles per
    day. It will be worth our while, especially following this
    conflict, to go back and take a look and see if that number
    remains adequate, because that number was established with a
    completely different set of assumptions. But in order to get to
    the 54.5 in the course that the Secretary described is the
    course that we are on right now.
        Secretary Roche. We wish we just had a problem of building,
    Senator, it would be easier. We have aging across the board and
    trying to have budget fit these different categories after,
    frankly, 10, or 8 to 12 years of not investing. We don't have a
    capital budget and we don't have a process to reinvest a
    depreciation rate. So we face you with these big bumps of
    modernization, which is a shame.

                                  GLOBAL HAWK

        Senator Cochran. Another point that I recall the chairman
    making when he was here before the committee was the importance
    of the capability of these unmanned aircraft to surveil and
    identify activity through intelligence gathering. The
    usefulness obviously is very important in a war like we are
    conducting in Iraq right now. My impression is that Global Hawk
    has proven to be very valuable to our operations.
        My question is, are we moving fast enough to procure
    systems such as Global Hawk and other necessary unmanned aerial
    vehicle variants that we see developing? I know Northrop
    Grumman is developing a Fire Scout as another option. What is
    your impression of these new systems and are we integrating
    them into the Air Force quickly enough?
        Secretary Roche. First of all, Senator, I think the Air
    Force integration is one where people keep wondering why
    fighter pilots are doing this, and we're past that. We are
    absolutely past that. When we have the chief fighter pilot of
    the Air Force as one of the greatest fans of unmanned vehicles,
    it's amazing that his leadership has made everyone recognize
    that there is a complementary nature of manned and unmanned
    aircraft.
        General Franks really did us an enormous favor when we both
    asked him if we could put some drones over Afghanistan that
    were not fully developed, not ready for prime time, in order to
    learn how these operated in war. We probably have saved the
    American taxpayer an enormous amount of money by having the
    chance to build something, play with it, use it, understand it,
    change it, go back.
        We're getting the same permission from General Franks here
    in the Iraqi war. That's allowed us to do things very quickly
    like the armed Predator, like the sleeve on the Hellfire, like
    looking at Global Hawk for multiple types of missions,
    including taking some of the bandwidth off of the satellites
    and having Global Hawks behave as lower altitude satellites.
    It's led us to take the multi-sensor command and control
    aircraft and to think about part of the back end controlling
    some drones.
        And then taking a leaf from history, in the late thirties
    at Maxwell Air Force Base and the Wright Patterson Air Force
    Base, the Army Air Corps procured small numbers of a number of
    different types of aircraft and allowed the young pilots to say
    here's how these are best used, here's how things go. We've
    been trying to replicate that. And in open session I can't tell
    you how many families, I can tell you it's more than you can
    count on one hand, the families of unattended vehicles plus
    remotely piloted aircraft, we have found in certain
    circumstances having a pilot who has to make an attack decision
    is very important, and also just how the pilot's instincts take
    over.
        You know, a pilot can see a black cloud and won't go into
    it. A drone will go exactly where you told it to go and then
    you may find you have a problem because you're in a black
    cloud. Or when an Iraqi Flogger is coming in at our Predators,
    our pilots use certain techniques to do that--alter what the
    Flogger could see. We, by playing and understanding these and
    getting our young people involved, it has made a huge
    difference.

                         UNMANNED AERIAL VEHICLE PILOTS

        Now we had a cultural problem when a number of our young
    pilots thought that somehow they had failed us and that's why
    they were being assigned to unmanned vehicles. We have both
    visited every operating unit, we've both spent time at Indian
    Springs. We've now found every one of their problems like gate
    time, they didn't get gate time, or they weren't eligible for
    medals because quite often they were not in the region,
    although some of them have killed more people than a heck of a
    lot of our other pilots. They can get medals now. They worried
    about where they would go on their next set of orders. We make
    it clear to them that they are pioneers and we just milk their
    brains, as well as the maintainers on these aircraft.

                                   PREDATOR B

        And from that we have developed the notion of a basic
    Predator closer to a razor blade as cheap as possible, and it's
    a killer scout. Predator B is going to be a hunter killer, fly
    higher, carry more. Global Hawk is equivalent to a low altitude
    satellite, it can do all kinds of things. And so we believe
    that our procurement program is much greater than it was a few
    years ago. And then there are others that I can't discuss in
    open. This will form a set of families that will let us
    replicate what happened prior to World War II where the United
    States was able to pick the best precisely because it
    experimented as well. General?
        General Jumper. Sir, if I could just add a few points. One
    is that we have to make sure that we understand the true value
    of these remotely piloted and unattended vehicles to the fight,
    and the main virtue that we see is this notion of persistence.
    We had a Predator here just a few days ago that flew a 33-hour
    mission. It's this persistence that enables you to stare and to
    predict, and to do it day and night that makes this small
    airplane so valuable to us. We've got to make sure that we
    understand the value of these things and that when we project
    out to where our capabilities need to go in the future that
    we're not just merely taking people out of airplanes.
        One of the issues that we discuss often is, would we be
    buying this vehicle if it were manned, because the vehicle does
    something unique that we can't do with anything else. That's
    one of the litmus tests that we have to make sure that we pass.
    And if we can't pass that test, then we have to make sure that
    we're not taking the judgment out of the airplane that is
    absolutely required to be there.
        That's why we make this distinction about remotely piloted
    aircraft. We're going to have a rated person at the controls of
    the Predator as long as there is a requirement to bear the
    burden of putting weapons on targets and being responsible for
    the lives of people on the ground, just the way we burden our
    people who fly in the airplanes. It's those kinds of things
    that we are thinking our way through in a deliberate way before
    we make big commitments out there for the future.
        But we understand the urgency, sir, and we are pressing on
    with it.
        Secretary Roche. In the notion of range of persistence, the
    third one that we have come upon is this notion of what we call
    digital acuity. It says that a drone in its 23rd hour of
    operation is just as sharp as it was in the second hour of
    operation, where a human being tires, a human being starts to
    lose interest, where a digital system does not. So we're
    looking for comparative advantage in each case and we have
    proven that drones or remotely piloted aircraft and piloted
    aircraft can operate in the same airspace very comfortably. A
    Navy F-18 in Afghanistan asked the Predator a question, and the
    Predator answered the question.
        Senator Cochran. Thank you.
        Senator Stevens. Senator Dorgan.
        Senator Dorgan. Mr. Chairman, thank you very much.
        I have had the opportunity to tour the Global Hawk, the
    Predator and F-22 programs, and I am very impressed.

                             IRAQ WAR NEWS COVERAGE

        I want to ask you about the Air Guard, their jet fighters,
    B-52s, but before I do that, let me ask a question that's been
    bothering me. With this 24-7 news coverage of the war and 500
    journalists embedded in our Armed Forces who are fighting that
    war and with all of the networks actually having begun
    advertising before the war began about their cast of characters
    for analysts and interpreters, in the mornings I have watched
    retired generals and admirals, many people who have served this
    country with great distinction standing on full-scale maps on
    the floors and walls with pointers, and they're describing
    where our troops are moving, where they're headed, what they
    think might or might not happen. Some have even been mildly
    critical, I believe.
        But I watch all that and I think, this is a wealth of
    information to me as an American citizen. I also have access to
    top secret briefings, as do my colleagues. What I see in the
    morning on television or at night by many of these analysts,
    former colleagues of yours, makes me wonder. Is there any cause
    for anxiety or concern inside the Pentagon about what's being
    disclosed with all these pointers? It's a wealth of information
    to me and to the American people. Is it also a wealth of
    information to the Iraqis, who I assume watch Cable News
    Network (CNN) and other news services? Do you have any anxiety
    or concerns about that, General?
        General Jumper. From time to time some of the things I have
    seen have actually caused me some anxiety, because it has
    appeared to me from time to time that some of these people, not
    necessarily former military people who have access to
    classified information, have actually talked about things that
    shouldn't be talked about.
        By and large what I see is a description of ongoing
    operations that are usually lagging in events and would be of
    little help. I can tell you that most, not all, most of the
    people who formerly wore a uniform are acutely aware of this
    and they take great care to make sure that what they are going
    to say does not divulge anything. Also, it's fascinating to see
    how captivating this notion of a camera going along in the back
    of a Bradley for hours and hours is to the American people out
    there, and of course that gets the American people right down
    to the tactical level, which I think is good for them, because
    they get to see our soldiers, sailors, airmen and marines at
    work.

                                  B-52 BOMBERS

        Senator Dorgan. Thank you, General, for your response.
        Let me ask about the B-52s. You talked about the KC-135s
    and the aging and corrosion. That same circumstance is not
    present with the B-52s, is it?
        Secretary Roche. No, sir, and there are a couple of
    reasons. One is, the design of the plane was such that it was
    overdesigned and in particular, if I can demonstrate--my
    colleague does it better than I do. B-52s have wings like this,
    and 135s have wings like that. In one case water flows into the
    fuselage and in the other case it flows out, so we have not had
    the problem of assembly metal and the cabin corrosion with B-
    52s. Also, over the course of time because they were nuclear
    bombers, there has been major structural rework done on those
    planes. And then lastly and most importantly, we don't fly the
    plane anywhere near the way it was intended to be flown. We
    have found that it serves a particularly wonderful mission if
    it goes up high, launches, stand off in defended areas, or over
    the top in areas where there is no air defense, so how we use
    the plane makes a big difference. And we kept 76 of the best
    from many hundreds.
        Senator Dorgan. And in fact when they talk about the age of
    the plane, in large respect they are not that old; much and
    most of that plane has been replaced and updated.
        Secretary Roche. Yes.
        Senator Dorgan. But I just wanted to make that point, that
    we don't have the same circumstance with the B-52 even though
    it's a very old system.
        General Jumper. Right.

                               AIR NATIONAL GUARD

        Senator Dorgan. Let me ask about the Air Guard and the F-
    22s that will come on line at some point, and I happen to share
    your view. I hope we can keep this schedule moving. I think
    it's an impressive airplane and I hope very much that we can
    continue to fund it and move it along. As we do that, planes
    have become available for the Reserve components and the Guard.
        As you know, one of the best Guard units are the Happy
    Hooligans from Fargo. In fact, they were the first up to
    protect the Capitol the day of the attack on 9/11, the first
    fighters scrambled from Langley. They have won the William Tell
    award twice, and I think the only Air Guard unit perhaps to
    ever win it, and certainly to win it twice against all the best
    pilots in the world. But the best pilots are now flying the
    oldest airplanes, which gives them some amount of angst and
    myself as well. And we're trying to evaluate what's the future
    here, when will they get their F-15s or modern F-16s? You and I
    have talked about that a great deal, General, and Mr.
    Secretary, we have as well. Any news on that front?
        Secretary Roche. Much depends on whether we can keep the F/
    A-22 schedule on. We are very aware of the Happy Hooligans'
    record and we also are aware that they have a strong interest
    in F-15s if not the F-16Cs, and that's something we have in our
    heads. We would like to flow these down when appropriate to the
    Hooligans and other members of the Guard to get some aircraft.
        The second thing we would wish to do, as you know, we have
    a group that's called blended wing at Warner Robins on the
    Joint Surveillance and Target Attack Radar System (JOINT STARS)
    aircraft, which was a radical experiment that General Jumper
    and I wanted to take, which was to have active and guardsmen in
    the identical wing with full-time missions. Right now the head
    of that wing is a guardsman. And other than some constitutional
    issues of someone empowered by a State giving orders to a
    Federal force, it has worked wonderfully, and this war is going
    to prove that we can do this. The only thing we would like to
    do different in the long run is to start to think of doing that
    more in the Guard, among other things to get F/A-22s into the
    Guard where we can blend wings.
        Senator Dorgan. I will come back and talk to both of you at
    other times on this issue.

                               ELECTRONIC WARFARE

        Let me just ask two additional very brief questions. One,
    B-52s and electronic warfare mission, I believe, General, you
    testified to that over in the House. And the second, I want to
    just ask, are you reasonably positive, do you feel generally
    positive about the decision the Secretary might make with
    respect to leasing 767s?
        So if you could address those two things, the B-52
    electronic warfare issue, and the 767.
        Secretary Roche. How do you want to handle this?
        General Jumper. I will take the B-52.
        Sir, as you well know, we are pursuing a program to take a
    very hard look at complementing the United States Navy and its
    desire to replace the EA-6B in a jamming world with something
    that can persist a little bit longer and can also help both the
    Navy and the Air Force and the Marine Corps with stand-off
    jamming that's persistent. And the platform we would like to
    take a look at, of course, is the B-52. Take advantage of that
    very large fuel tank that they have out on the wing tip----
        Senator Dorgan. You said that was the size of a
    condominium?
        General Jumper. It's the size of a small condominium. When
    you stand off it doesn't look that big, but when you walk it up
    next to it, you can figure out you can live in it. But we could
    take the work on the electronic jamming pods that has been done
    for the Navy in the EF-18 and we could take that same
    technology and leverage it for this pod, I think without
    disturbing the rest of the mission of the aircraft at all. So
    it can deploy long ranges, it can persist for long periods of
    time and complement the shorter range F-18.

                                   767 LEASE

        Secretary Roche. With respect to the 767 lease, I would not
    want to speak for Don Rumsfeld.
        Senator Dorgan. I'm just asking how you feel.
        Secretary Roche. I feel good about some variation of the
    lease, because the Secretary clearly understands and accepts
    and is probably, given his history as Secretary of Defense
    earlier, recognizes that all these tankers were flying then.
    And in fact, some of them were flying when he was still on
    active duty, or just about. And that we do need new tankers and
    this has to be done sensibly. The fact that we now have some
    collegiality between his staff and the Air Force trying to
    address this problem in a sensible manner, I must give special
    praise to Secretary Aldridge. He has tried mightily to make the
    points that need to be made and also to try to take into
    account concerns of controllers and others, as well as Zone B,
    and we are trying to come up with an alternative that's a
    variation that in fact the Secretary could approve us going
    forward, but we're working together for the first time.
        Senator Dorgan. Thank you for your responses.
        Senator Stevens. Thank you very much, gentlemen.
        Two things. I have asked the staff to take a look at the
    current GI bill, the Montgomery bill, to make certain that it's
    going to be available to those who have been involved in this
    effort. There is some question as to whether they had to have
    made the decision at the time they entered the service as to
    whether they wished to be eligible for that, and I think many
    of them after this experience might want to have a second look
    at that, and I would urge you to talk to the Department about
    that.

                                   COMBAT PAY

        Secondly, I asked the staff to look at the problem of what
    we called combat pay, we now call hostile fire and imminent
    danger pay. I'm informed that was $110 a month before the
    Persian Gulf War, during the Persian Gulf War it was raised
    about 27 percent to $150 a month. And we have had an increase
    in pay since for just general military pay since the Persian
    Gulf War of about 30 percent. Clearly, we ought to have a
    combat pay figure that is relevant to the current pay scales
    and to current problems, and I would urge you to also take this
    up with the Department.
        I don't think we ought to jump the gun. I think that was
    raised actually by executive action in the Persian Gulf War, it
    was made permanent in the 1993 Act, but the current rate of
    $150 was made permanent then. We seek your guidance. I should
    think that the Executive Order would be sufficient right now,
    but the permanent pay scale ought to be raised sometime in the
    future.
        Again, I thank you very much for your presence. Senator
    Inouye and I have been here now for over 30 years on this
    committee and watched the development of many of the systems
    that we're seeing used so effectively in this war, and we
    commend you as we did in the beginning for your efforts and
    your role. And I promise not to show your picture around, the
    one I talked to you about, General.

                         ADDITIONAL COMMITTEE QUESTIONS

        General Jumper. Thank you, Senator.
        Senator Stevens. He went to high school in Anchorage.
        Thank you very much.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                     Questions Submitted to James G. Roche
              Questions Submitted by Senator Kay Bailey Hutchison

             BASIC MILITARY TRAINING AND TECHNICAL TRAINING SCHOOL

        Question. Your submitted joint written statement addresses the
    importance of recruiting and retention to maintain a quality force. You
    said, ``Despite the challenge of mustering such a diverse and skilled
    collection of Americans, we exceeded our fiscal year 2002 enlisted
    recruiting goals and expect to surpass fiscal year 2003 objectives. We
    will adapt our goals to meet new force objectives; however the capacity
    limitations of Basic Military Training and Technical Training School
    quotas will continue to challenge Total Force recruiting efforts.''
    Since these missions are accomplished as a whole or in part at Lackland
    and Sheppard Air Force Bases, can you elaborate on what you mean by
    capacity limitations?
        Answer. The Air Force is in the process of reshaping the force in
    response to the current security environment. Basic Military Training
    (BMT) and most Air Force Speciality Code (AFSC) technical schools met
    past capacity requirements but are now feeling stressed because of
    meeting new or expanded mission demands. BMT capacity is currently
    tight because of increased Guard/Reserve numbers but capacity is
    sufficient to meet demand. Some of our most in-demand career fields are
    trained at technical training wings in Texas (e.g., CE Readiness at
    Sheppard; Security Forces at Lackland; Intelligence/Linguist at
    Goodfellow). As we transform, certain skills will be temporarily
    stressed; however, adequate resources will be moved to accommodate
    increases in throughput. As we work through this force reshaping,
    training requirements will be adjusted. Active and Reserve Component
    requirements will be re-evaluated and enough seats made available to
    meet new steady state current and future requirements.
        In the interim, timing of course dates may not be as convenient;
    however, sufficient seats will be available to accomplish Total Force
    mission requirements. Our focus is on making force-shaping adjustments
    while maintaining the most effective and efficient Total Force training
    pipeline possible. We expect to sustain adequate capacity given the
    size of the force we have today.

                  RANGE AND READINESS PRESERVATION INITIATIVE

        Question. Please provide some background information on the Range
    and Readiness Preservation Initiative that you mentioned in your
    written statement, intended to examine training range activity and
    current legislation's impact on these activities.
        Answer. The Readiness and Range Preservation Initiative (RRPI)
    provides clarification to specific statutes; it does not provide
    ``sweeping'' exemptions from environmental laws. Also, the RRPI is not
    a complete solution for every encroachment challenge. Changes in
    regulations and administrative practices are also being explored.
        Recently, courts have been interpreting environmental statutes and
    existing laws in new ways that are impacting military operations on
    ranges and in airspace. RRPI is one process used by the Air Force to
    address encroachment. The current RRPI seeks focused legislative
    changes to protect our readiness as we manage our resources. It does
    this by; (1) codifying Department of the Interior policy to use DOD's
    integrated natural resources management plans. These replace the need
    for critical habitat designations under the Endangered Species Act on
    DOD lands, (2) amending the Marine Mammal Protection Act to clarify
    that military readiness activities are not considered ``harassment'' of
    marine mammals unless they present a significant potential to injure
    the mammals or to disrupt natural behavior patterns, (3) codifying the
    Environmental Protection Agency rule that munitions used as intended on
    operational ranges, e.g., dropped on a range, are not ``solid waste,''
    (4) clarifying Comprehensive Environmental Response, Compensation, and
    Liability Act (CERCLA) definition that firing a weapon is not a
    ``release,'' and by (5) extending the timeframe to conform to State
    Implementation Plan requirements for air emissions.
        In summary, these modest changes to the current laws will maintain
    the current status of law and regulatory implementation policy while
    preventing judicial creep from changing well-established rules.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                                FORCE PROTECTION

        Question. Secretary Roche, I understand that the Army will be
    providing approximately 8,000 additional personnel to help the Air
    Force meet its increased force protection requirements. This support
    will last for two years, but is not included in the fiscal year 2003
    Budget or the proposed fiscal year 2004 budget. How does the Air Force
    plan on funding this increase and what plans are in the works for a
    permanent solution to the shortfall?
        Answer. The increases for Air Force force protection are a direct
    result of the attacks of September 11, 2001 and the Global War on
    Terrorism. These increases were initially fulfilled by the mobilization
    of over 90 percent of Air Reserve Component security forces. With the
    limit of 24 months of mobilization and the inability to replace those
    whose mobilizations will expire in 2003, the Air Force entered the
    agreement with the Army to provide replacement personnel. The timing of
    these requirements was such that the Air Force was unable to include it
    in the fiscal year 2003 or fiscal year 2004 budgets. For fiscal year
    2003, supplemental funding was provided. The fiscal year 2004
    requirement remains unfunded at this time.
        The Air Force plans to permanently resolve this shortfall with a
    combination of increasing the number of security forces by force
    structure adjustments, providing contract support where applicable, and
    exploiting technologies that will reduce the personnel requirement.

                                 F/A-22 RAPTOR

        Question. Secretary Roche, as you know, the GAO has recently
    released a report on the cost growth of the F/A-22 Raptor. It states
    that ``DOD has not fully informed Congress (1) about what the total
    cost of the production program could be if cost reduction plans do not
    offset cost growth as planned or (2) about the aircraft quantity that
    can be procured within the production cost limit.'' If the cost limit
    is maintained and estimated production costs continue to rise, will the
    Air Force have to procure fewer F/A-22s than currently planned?
        Answer. The program has experienced production cost increases that
    have reduced the number of jets that can be bought. Under the $36.8
    billion Congressional production cap, current estimate is that between
    220-230 aircraft can be procured. It is important to note that, though
    aircraft affordability is not matching initial expectations, the
    aircraft are getting cheaper. By promoting production stability and
    momentum, there is no reason the program can't continue, and even
    accelerate, towards the ultimate goal of delivering Air Dominance to
    the Combatant Commanders.
        With relief from the current Congressional production cap, the Air
    Force estimates it can procure at least 276 aircraft under the $42.2
    billion OSD-approved ``buy-to-budget'' strategy. This revised estimate
    accounts for actual negotiated lots through Lot 3, conservative
    assumptions for future efficiencies, and a 5 percent risk factor for
    production ``unknowns.'' In addition, the Air Force and Office of the
    Secretary of Defense (OSD) Cost Analysis Improvement Group (CAIG)
    quantity estimates now agree within 3 percent. For these reasons as
    well as the positive affordability trend mentioned above, the Air Force
    fully expects to buy more than 276 aircraft under the OSD-approved
    production limit.
        Question. Secretary Roche, at the annual Air Force Association's
    Air Warfare Symposium, you described problems with F/A-22 and contended
    that if those problems cannot be repaired you would recommend
    termination of the program. Can you please describe the problems you
    were referring to, and is it your plan to cancel the program is these
    problems continue?
        Answer. The problem I referred to at the Air Warfare Symposium is
    avionics software stability. The issue is not how well the avionics
    perform, but how long they run before a module in the avionics software
    suite requires a reset. The current average run-time between resets, as
    measured in the F/A-22 Avionics Integration Laboratory (AIL), decreased
    when the software was loaded on the aircraft. OSD chartered an
    independent team to study this problem and recommend ways for improving
    run-time in the jet and ways for translating stability from the AIL
    into the aircraft. The team's recommendations center on implementation
    of new software development tools and data capturing methods for
    finding and fixing the root causes of instability events. The team
    stated that, after implementing new tools, there is no reason software
    stability cannot be resolved.

                                  TANKER FLEET

        Question. Secretary Roche, General Myers stated in testimony before
    the Congress that replacing the 40-year old KC-135 air refueling fleet
    is an essential joint warfighting requirement. However, funds for
    replacing the tankers were not included in the fiscal year 2004 budget
    request. Is the tanker fleet ``relatively healthy'' or is the
    replacement of refueling tanks ``essential'' to support mission
    requirements?
        Answer. Recapitalization of the tanker fleet is ``essential'' and
    must begin now to continue to meet tanker requirements. The fiscal year
    2004 President's Budget does not include funding for the tanker
    replacement; however, there are two options under consideration by the
    Department of Defense to field a replacement aircraft within the future
    years defense plan. Pending departmental approval, the Air Force
    intends to bring the recommended plan forward and identify funding and
    delivery schedules at that time.

                          AIR FORCE INVESTMENT BUDGET

        Question. Secretary Roche, a Congressional Budget Office study of
    the long-term budget implications of current defense plans commissioned
    by this committee suggested that the Air Force's investment budget
    would need to grow to $59 billion by around 2012. The Air Force has
    made some cut backs to force size since CBO made that estimate but it
    seems likely that Air Force investment will require significant real
    increases in spending. Do you think those increases are likely to
    become available?
        Answer. As the CBO study illustrates, the Air Force faces a complex
    set of aging aircraft/system challenges. Since procurement of new
    U.S.A.F. aircraft/systems dropped to minimal levels during the 1990s,
    we now face a modernization bow wave that will take time and money to
    turn around. Moreover, the cost to maintain older systems could grow
    substantially and further erode the funding available for
    modernization.
        Though it is not appropriate for me to predict the level of
    funding, it is my role to examine the national security strategy and
    make recommendations to the Secretary and on how best to spend those
    funds available. We do this each year as part of the Future Years
    Defense Program build. The next comprehensive look at all this, to
    include the new security strategy and the post-Iraq-War environment,
    will be during the 2006 Quadrennial Defense Review. The Air Force will
    be a full and active partner in that process.

                                     ______

                 Questions Submitted to General John P. Jumper
                   Question Submitted by Senator Thad Cochran

                            AIR EXPEDITIONARY FORCE

        Question. General Jumper, I understand the Air Expeditionary Force
    construct you refer to on pages 11 and 12 of your written statement has
    been useful in managing deployment rotations and incorporation of the
    Guard and Reserves. Can you comment on the utility of this rotation
    methodology in the Afghanistan and Iraqi conflicts?
        Answer. The Air Expeditionary Force (AEF) has been very successful
    in allowing the Air Force to respond to the requirements of both
    Afghanistan and Iraq. Even under these stressing conditions the AEF
    allowed us to deploy and re-deploy forces in an orderly and thoughtful
    manner, thereby preserving the ability of the Air Force to meet
    national security imperatives.
        In January 2003, we made the decision to deviate from our normal 3-
    month rotations so the Air Force could meet combatant commander
    requirements. To do so we ``surged'' the AEF to build-up the level of
    available forces by freezing AEF seven and eight in place and reaching
    forward into future AEFs for additional forces. This allowed us to
    simultaneously support homeland security requirements, the global war
    on terrorism, Operation IRAQI FREEDOM, and an increased force posture
    in the Korean AOR proving the AEF's robustness and ability to respond
    to crisis situations; however, this deviation from the Air Force's
    normal AEF ``battle rhythm'' affected all Air Force personnel: Active
    Duty, Guard, and Reserve.
        As I noted in the U.S.A.F. Posture Statement, ``we do nothing
    without Guard, Reserve and civilian personnel working alongside Active
    Duty airmen.'' The AEF construct gives the Air Force the tools to
    select the Active Duty, Guard or Reserve capability best able to meet
    combatant commander's requirements and achieve national military
    objectives. Since September 11, 2001, we have seen a continued increase
    in baseline requirements for air and space expeditionary forces. This
    trend began after Desert Storm and has continued throughout Kosovo and
    Afghanistan. Until we are better able to judge the post Operation IRAQI
    FREEDOM requirements, we cannot specifically define the level of
    emerging sustained forces required. Regardless of the level of this
    requirement, the AEF construct allows us to maximize our sustainable
    deployed capability while giving us the flexibility to respond to
    additional contingency requirements.
        To understand this, one has to realize that the AEF construct is
    not just a way for the Air Force to manage deployment rotations. The
    AEF construct allows us to provide the greatest possible capability to
    the combatant commanders while preserving the readiness of the force to
    meet both rotational and crisis requirements. A crucial part of force
    readiness is achieved by retaining our most critical resource, the
    trained and motivated airman. The recent conflicts in Iraq and
    Afghanistan have once again highlighted the tremendous job these young
    professionals are doing for our country. To retain this crucial
    resource it is essential we give them the tools to manage their
    professional and personal lives by providing predictability and
    stability. The AEF construct has been fundamental to our ability to
    train and retain the best and brightest.
        Recent Operations operations have afforded the Air Force an
    opportunity to test the ability of the AEF to robust and respond to
    crisis situations. The AEF met this challenge head-on, seamlessly
    proving each combatant commander with the expeditionary air and space
    capabilities to prevail.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                                  TANKER FLEET

        Question. General Jumper, there is strong reason to believe that
    the need for aerial refueling operations to conduct current and future
    operations will continue to grow. Is the Air Force's current tanker
    fleet able to handle an increased pace of operations?
        Answer. We are confident that we can, and will, successfully
    execute missions as we did with Operations ENDURING FREEDOM and IRAQI
    FREEDOM. However, if simultaneous operations in other regions are
    added, tanker availability becomes more of a limiting factor, delaying
    deployment of forces, and extending the duration of the air war.
        The Air Force has an urgent and compelling need to begin replacing
    the 43-year-old KC-135E as soon as possible. Competing priorities and
    limited budget demand our leaders make decisions based on operational
    risk and investment choices. Today, our most pressing tanker risk is a
    delay to the replacement process. In the future, the Air Force will
    continue to assess its tanker requirements and make appropriate
    decisions regarding future force structure.

                                 SPACE PROGRAMS

        Question. General Jumper, the Space-Based InfraRed System-High has
    in the past suffered from schedule delays and significant cost growth.
    Can you please give the committee an update on progress in the Air
    Force's Space-Based InfraRed System-High in the fiscal year 2004 budget
    request and can you guarantee that this program is on schedule and
    within its budget?
        Answer. The fiscal year 2004 Research, Development, Test and
    Evaluation (RDT&E) request for Space-Based Infrared System-High (SBIRS
    High) will continue to fund the development contract for space and
    ground segment development, continue System Program Office support, and
    independent technical analysis by Aerospace corporation.
        The fiscal year 2004 Other Procurement, Air Force (OPAF) will fund
    procurement of equipment needed for Mission Control Station Backup
    (MCSB) site activation, systems engineering, integration, and test
    support; and hardware and software licenses and government furnished
    equipment (GFE). The MCSB at Schriever AFB, CO will be the backup to
    the SBIRS Mission control station (MCS) at Buckley AFB, CO, to meet
    full operational needs. The MCSB is currently under construction using
    the MILCON funded in fiscal year 2002 ($19 million) and is on schedule
    for completion by September 2003.
        The Interim Test Center (ITC) hardware installation in Boulder, CO,
    is scheduled to be completed in July. The Integrated Training Suite
    (ITS) is scheduled to be available in the fall of this year. The ITS is
    critical to maintain an experienced and effective crew force--ensuring
    personnel are trained when they arrive station and remain proficient
    throughout their assignment.
        SBIRS Highly Elliptical Orbit (HEO)-1 payload environmental
    testing, including thermal vacuum and acoustic tests, and several
    payload-to-host and -ground interface tests were successfully completed
    in 2002. Electromagnetic Interference (EMI) testing uncovered excessive
    radiated emissions levels in late December 2002. The HEO-1 test and
    certification program is designed to find and fix problems. The
    problems encountered are not unusual for first time payload integration
    of a new sensor. Resolution has required extended rework and parts
    fabrication, resulting in a schedule breach to the Acquisition Program
    Baseline for delivery of the HEO-1 payload (May 2003 threshold). The
    revised schedule details are still being worked; however, delivery
    should satisfy the Host's need date. Impacts to the schedules for
    subsequent deliveries, including HEO-2 payload and GEO spacecraft, are
    under review. The delivery of HEO-1 continues to receive the highest
    attention and priority among all stakeholders, contractor CEOs, and the
    Under Secretary of the Air Force.
        The recent delay in the delivery of the HEO-1 payload is being
    handled within the program's funding based on the cost estimate
    developed during the Nunn McCurdy certification review process. While
    HEO-1 payload delay is unfortunate, the lessons learned from this delay
    are being incorporated in the HEO-2 and GEO assembly, integration, and
    test.
        As a result of the schedule delays and significant cost growth that
    led to the SBIRS Nunn-McCurdy unit cost breach notification to Congress
    in December 2001, the Secretary of the Air Force directed an
    Independent Review Team (IRT), in concert with Lockheed Martin, to
    review the program and diagnose the root causes and contributing
    factors of the significant cost growth. Three root causes were
    identified.
        1. The program was too immature to enter the detailed System Design
    and Development phase.
        2. The system requirements and their flow-down into engineering
    solutions were not well understood.
        3. A significant breakdown in execution management occurred, both
    within the government and the contractor teams.
        These findings were addressed in the restructured program presented
    to the Under Secretary of Defense Acquisition, Technology, and
    Logistics USD(AT&L) for his review.
        The USD(AT&L) certified the SBIRS program to Congress as required
    by the Nunn-McCurdy Act on May 2, 2002. The Acquisition Decision
    Memorandum directed the Air Force to:
      --Fully fund the SBIRS-High program to the OSD estimate
      --Rebaseline program to OSD schedule
      --Approve a revised Acquisition Program Baseline and a revised
            Acquisition Strategy
      --Submit a quarterly Selected Acquisition Report with an as-of-date
            of June 30, 2002
      --By January 30, 2003, Under Secretary of the Air Force provide AT&L
            with assessment of the program status to meet the revised
            Acquisition Program Baseline--completed January 27, 2003.
        As part of the Nunn-McCurdy certification process, the Air Force
    restructured SBIRS High to make it executable and fully funded the
    program to the OSD estimate. The program established a realistic
    baseline and implemented management changes based on the Independent
    Review Team findings. The acquisition strategy was revised and the
    Total System Performance Responsibility (TSPR) clause removed from the
    contract. The comprehensive government Estimate at Complete (EAC)
    identified many shortfalls with the original technical baseline that
    are now corrected and funded. The schedule also provides for adequate
    testing timelines (based on historical data). The Earned Value
    Management System (EVMS) enhancements add industry best practices and
    more SPO surveillance. Both government and Aerospace staff dedicated to
    SBIRS have increased.
        The program is implementing only ``Urgent & Compelling'' needs via
    a disciplined change process controlled by the SBIRS Program Management
    Board. This Program Management Board is in place to prevent
    requirements creep. The revised contract defines quantifiable,
    objective performance criteria to reward positive behavior and penalize
    poor behavior--a Best practice recommendation of the Young Panel.
      --Program Execution Performance (PEP) incentivizes disciplined
            management/system engineering processes
      --Mission Success Incentive incentivizes timely delivery of military
            capability
      --Cost Plus Incentive Fee (CPIF) contract clause incentivizes cost
            performance
        Although challenges remain, the Department is reasonably confident
    that the SBIRS cost and schedule estimates are realistic and
    executable, based on both Air Force and OSD independent cost estimates.

                      EXPEDITIONARY AEROSPACE FORCE (EAF)

        Question. General Jumper, given the current world situation--with
    its large scale deployments for the war on terrorism and war with Iraq,
    and the possibility that these large scale deployments might continue
    for a number of years--is the EAF concept still viable?
        Answer. Yes, the Aerospace Expeditionary Force (AEF) concept is
    still viable. The AEF concept is not tied to a particular base or
    mission. It is the way the Air Force organizes and prepares for
    military operations abroad.
        The Air Force implemented the AEF structure in October 1999 as a
    force management and presentation tool designed to ensure fully trained
    and combat-capable airpower forces are always available to successfully
    support standing contingency operations.
        Sustaining on-going rotation requirements has become part of our
    Air Force culture. The AEF concept articulates the capability of the
    Air Force to support normal standing rotations and contingency
    operations. The Air Force can indefinitely support the deployment of up
    to two AEFs (aircraft and expeditionary combat support) worth of
    assets.
        When contingency requirements exceeded this maximum sustainable
    capability, we ``surged'' the AEF to meet those evolving requirements.
    During ``surge'' we are able to temporarily increase the amount of
    deployed capability up to four AEFs. Requirements beyond two AEFs force
    us to reach forward into successive AEFs for the required capabilities.
    This surge comes at a price. To enable the build-up of capability unit
    training cycles are curtailed and deployment durations are extended.
    The higher the level and the duration of surge the greater the
    reconstitution impact, in terms of training and recapitalization of
    equipment. The Air Force is prepared to transition back to a more
    normal rotation cycle when the combatant commanders no longer need the
    additional support for OPERATION IRAQI FREEDOM.
        It is important to stress that the ability of the Air Force to
    support deployment requirements is in no way limited by the AEF
    construct. The AEF structure allows the Air Force to meet the
    challenges head on. It provides the Air Force a methodology for
    managing force readiness to meet the growing demands for Air & Space
    Expeditionary Forces, while simultaneously supporting the Defense
    Strategy requirements such as: defend the homeland, deter forward,
    swiftly defeat and/or a limited number of lesser contingencies.
        Total force size, active to reserve component mix and overseas and
    CONUS base structure determine our total deployment capability. To
    maintain readiness and meet retention needs the Air Force, like the
    other services, needs to limit Temporary Duty (TDY)/deployments of this
    deployable capability to approximately one-third of the time. The AEF
    rotational construct does this.
        Air Force senior leadership is working to reshape the force in
    areas of concern highlighted by the recent stress on the system
    resulting from current operations. Where possible we are shifting
    resources from less stressed areas into stressed career fields and
    shifting military positions to make the maximum deployable capability
    available. We are also completely revamping our methodology for
    determining military and civilian manning requirements to focus the
    requirement process on deployable capability rather that home station
    requirements. These efforts have made over 270,000 active duty
    positions available to meet deployed requirements.
        The bottom line is that the AEF has been a tremendous success since
    its inception. The modifications we are pursuing, such as embedding the
    Air Expeditionary Wings (AEWs) have enhanced the capability of the AEF
    over the course of its evolution. The likely level of requirements will
    continue to stress the Air Force in the coming years as we reduce the
    numbers of mobilized forces, the AEF gives us the best possible tool to
    cope with these stresses.

                              SUBCOMMITTEE RECESS

        Senator Stevens. If there is nothing further, the
    subcommittee will stand in recess.
        [Whereupon, at 11:25 a.m., Wednesday, March 26, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                            WEDNESDAY, APRIL 2, 2003

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

                             DEPARTMENT OF DEFENSE

                             Department of the Navy

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

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

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

                       STATEMENT OF SENATOR THAD COCHRAN

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

                         STATEMENT OF SECRETARY JOHNSON

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

                               PREPARED STATEMENT

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

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

                                  INTRODUCTION

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

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

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

           FISCAL YEAR 2004 BUDGET: BUILDING FROM A SOLID FOUNDATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                      STATEMENT OF ADMIRAL VERNON E. CLARK

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

                               PREPARED STATEMENT

        I thank you again for your continued support and for your
    roles as leaders of America in helping us create today's Navy,
    and I look forward to your questions.
        [The statement follows:]
                 Prepared Statement of Admiral Vernon E. Clark
        Mr. Chairman and members of the Committee, I appreciate the
    opportunity to appear today. The investment you've made in America's
    Navy has been vital to the nation's security and your Navy's ability to
    project more power, more protection and more freedom to the far corners
    of the earth. I speak for the entire Fleet in thanking you for your
    exceptional and continuous support.

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

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

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

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

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

    III. Our Fiscal Year 2004 Budget Request
        This past year the Navy improved its current readiness by properly
    funding our current readiness accounts, deepening the growth and
    development of our people, and developing innovative operational
    concepts and capabilities.
        This year, we intend to:
      --Sustain our current readiness gains to support the war on terror;
      --Deepen the growth and development of our people into the 21st
            Century, high-technology personnel force that is our future;
            and
      --Invest in our bold new Navy vision--Sea Power 21--to recapitalize
            and transform our force and improve its ability to operate as
            an agile, lethal and effective member of our joint, networked
            warfighting team.
        At the same time, we will continue to actively harvest the
    efficiencies needed to fund and support these priorities in both fiscal
    year 2004 and beyond. Our Navy budget request for fiscal year 2004
    supports this intent and includes:
      --7 new construction ships, two more SSBN-to-SSGN conversions, one
            cruiser conversion and 100 new aircraft;
      --Investment in accelerated transformational capabilities, including
            the next-generation aircraft carrier (CVN-21), the
            transformational destroyer (DD(X)) and Littoral Combat Ship
            (LCS), the Joint Strike Fighter, the Advanced Hawkeye (E-2C
            RMP) Upgrade Program and the EA-18G Electronic Attack aircraft;
      --An 4.1 percent average pay increase in targeted and basic pay
            raises, and a reduction in average out-of-pocket housing costs
            from 7.5 percent to 3.5 percent;
      --Investment in housing and Public Private Venture that will help
            eliminate inadequate family housing by fiscal year 2007 and
            enable us to house shipboard Sailors ashore when their vessel
            is in homeport by fiscal year 2008;
      --Continued investment in key operational readiness accounts that
            includes an increase in aviation depot maintenance funding,
            improvement in our annual deferred maintenance backlog for our
            ships, submarines and aircraft carriers, and sustained funding
            for our ordnance, ship operations and flying hours accounts;
      --Navy-Marine Corps Tactical Aviation Integration, a process that
            will maximize our forward-deployed combat power, optimize the
            core capability of naval aviation forces, introduce 200 modern
            aircraft across the fiscal year 2004-fiscal year 2009 program
            and save billions of dollars;
      --Divestiture of aging, legacy ships, systems and aircraft, producing
            nearly $1.9 billion in fiscal year 2004 for reinvestment in
            recapitalization;
      --Improvements in the quality of our operational training through a
            Training Resource Strategy; and
      --Investment in transformational unmanned underwater vehicles (UUV),
            unmanned aviation vehicles (UAV), experimental hull forms and
            other technologies.
                A. Sustaining our Current Readiness
        Your investment last year produced the most ready force in our
    history. Training, maintenance, spare parts, ordnance, and fuel
    accounts enabled our Fleet to be ready earlier, deploy at a higher
    state of readiness, and as we are witnessing today, build a more
    responsive surge capability. These investments were vital to sustaining
    the war on terrorism, assuring friends and allies and leading the
    nation's global response to crisis.
      --Ship Operations and Flying Hours requests funds for ship operations
            OPTEMPO of 54.0 days per quarter for our deployed forces and 28
            days per quarter for our non-deployed forces. The flying hours
            request receives an additional $137 million this year to
            sustain the investment level we established in support of last
            year's budget. This level of steaming and flying hours will
            enable our ships and airwings to achieve required readiness six
            months prior to deployment, sustain readiness during deployment
            and increase our ability to surge in crisis. However, sustained
            OPTEMPO at levels above this force-wide target, as is beginning
            to occur during fiscal year 2003's time of accelerated and
            extended deployments, will cause our current year execution to
            run both ahead and in excess of the existing plan.
      --Ship and Aviation Maintenance. Last year, we reduced our major ship
            depot maintenance backlog by 27 percent and aircraft depot
            level repair back orders by 17 percent; provided 32 additional
            ships with depot availabilities; ramped up ordnance and spare
            parts production; maintained a steady ``mission capable'' rate
            in deployed aircraft; and fully funded aviation initial
            outfitting. Our request for fiscal year 2004 aviation
            maintenance funding adds over $210 million to fiscal year
            2003's investment and will increase the number of engine
            spares, improve the availability of non-deployed aircraft, and
            meet our 100 percent deployed airframe goals.
          Our ship maintenance request continues to ``buy-down'' the annual
            deferred maintenance backlog and sustains our overall ship
            maintenance requirement. The aggregate level of funding for
            ship maintenance actually declines from fiscal year 2003 to
            fiscal year 2004, due in part to the positive effects of the
            additional maintenance funding provided in supplemental
            appropriations in the previous year, in part to the accelerated
            retirement of the oldest and most maintenance-intensive surface
            ships, and as a result of scheduling and timing.
      --Shore Installations. The fiscal year 2004 request provides 93
            percent of the modeled sustainment cost for facilities, an
            increase from fiscal year 2003's 84 percent. Although the
            overall investment in facility recapitalization has reduced
            from last year, slowing the replacement rate of facilities, our
            increased investment in sustainment will better maintain
            existing facilities as we continue to pursue innovations to
            improve our base infrastructure. Our Base Operations Support
            funding request is based on sustaining the current level of
            common installation and important community and personnel
            support functions; we have factored in management and business
            efficiencies to reduce the cost of providing these services. We
            continue to support a Base Realignment and Closure effort in
            fiscal year 2005 to focus our future investment and improve our
            recapitalization rate in the years ahead.
      --Precision Guided Munitions receive continued investment in our
            fiscal year 2004 request with emphasis on increasing inventory
            levels for the Joint Stand-Off Weapon (JSOW), optimizing the
            Navy's Joint Direct Attack Munition (JDAM) production rate and
            commencing full rate production under multi-year procurement
            for the Tactical Tomahawk (TACTOM). Our partnership with the
            Air Force in several of our munitions programs will continue to
            help us optimize both our inventories and our research and
            development investment.
      --Training readiness. The Training Resource Strategy (TRS) has been
            developed to provide for more complex threat scenarios, improve
            the training of our deploying ships, aircraft, Sailors and
            Marines, and support the range and training technology
            improvements necessary to ensure the long-term combat readiness
            of deploying naval forces. The TRS has identified the training
            facilities necessary to provide this superior level of training
            as well. Their dispersed character is more like the battlefield
            environment our forces will face today and tomorrow and will
            better challenge our deploying forces--before they are
            challenged in combat. Our fiscal year 2004 request includes $61
            million to support the Training Resource Strategy.
          At the same time, encroachment and environmental issues continue
            to impact our ability to maintain an acceptable level of access
            to our valuable testing and training ranges and operating
            areas. As a result, we are looking for a balanced approach that
            would protect our environmental obligations and our ability to
            both train in realistic scenarios and develop transformational
            systems for our future. Our approach would be limited to only
            the most critical issues, such as the designation of critical
            habitat on military lands designated for military training, and
            the scientific measurements that achieve an appropriate balance
            between our environmental concerns and our obligation to ensure
            our Sailors are properly trained and our transformational
            systems are properly tested. We will focus the use of our
            ranges for these purposes while continuing to be an excellent
            steward of these environmental resources. We look forward to
            working with the Congress and the American people on this
            important and urgent issue impacting our Sailors and Marines.
                B. Deepening the Growth and Development of our People
        We are winning the battle for people. Thanks to superb leadership
    in the fleet and the full support of the American people and Congress,
    we are making solid progress in addressing long-standing manpower and
    quality of service issues vital to having what it takes to win the
    competition for talent today and tomorrow.
        We are enjoying now, the best manning I have witnessed in my
    career. With few exceptions, we achieved C-2 manning status for all
    deploying battle group units at least six months prior to deployment.
    These accomplishments enabled our Navy to develop a more responsive
    force--one that surged forward with the right people, at the right time
    to fulfill our national security requirements.

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

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

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

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

        At the top of my list is the surface combatant family of ships--
    centered on the next-generation multi-mission destroyer DD(X), the
    next-generation cruiser (CG(X)), and the Littoral Combat Ship (LCS)--
    this combination of ships will provide joint force commanders with a
    robust range of transformational capabilities across the spectrum of
    warfare. From the long-range precision strike and volume-fires of
    DD(X), to the overland, theater and strategic ballistic and cruise
    missile defensive reach of the CG(X), to the ability to clear the way
    for the joint force in the tough littoral environment with LCS, the
    Navy's future surface warships will be designed from their keels up to
    operate as critical elements of our dispersed, networked, joint force.
        At the heart of this family is DD(X). Our DD(X) research and
    development effort is the baseline that will enable us to keep pace
    with today's rapid technological advances; it will spiral promising
    technologies to both CG(X) and LCS, and hence, permit us to both lead
    the threat and leverage the capabilities needed for the 21st Century.
    It will also enable us to upgrade in-service Aegis cruisers and
    destroyers with selected leading-edge technologies to ensure this vital
    core of our legacy, multi-mission fleet will maintain operational
    effectiveness throughout their lifetimes and until the DD(X) and CG(X)
    program comes to fruition. Specific highlights include:
      --Littoral Combat Ship (LCS).--Our most transformational effort and
            number one budget priority, the Littoral Combat Ship will
            counter anti-access threats, namely small, fast surface craft
            carrying anti-ship missiles, torpedo-armed ultra-quiet diesel
            submarines, and large numbers of inexpensive mines. It will be
            the first Navy ship to separate capability from hull form and
            will provide a robust, affordable, focused-mission ship to
            enhance our ability to establish sea superiority not just for
            our Carrier Strike Groups and Expeditionary Strike Groups, but
            for all the joint logistics, command and control and pre-
            positioned ships that must transit the critical littoral threat
            area to move and support forces ashore. They will be dispersed
            and netted, both leveraging and enhancing the knowledge
            superiority and defense of the theater joint force. They will
            be the backbone of our organic battle group mine warfare
            capability.
          We will separate capability from platform by developing
            ``tailorable'' mission modules that can be rapidly changed in
            forward locations. This kind of ``forward fit and fight''
            capability will enable us to distribute these small, minimally
            manned, persistent, high-speed vessels across the globe and it
            will permit us to use innovative crewing techniques. By
            employing networked sensors, modular mission payloads, a
            variety of manned and unmanned vehicles, and an innovative hull
            design, they will also have the inherent capacity for further
            transformation. We will capitalize on DOD initiatives, spiral
            development, and new acquisition methods to streamline the
            acquisition process and begin construction of the first LCS by
            2005. The fiscal year 2004 budget accelerates development and
            construction of 9 LCS in the FYDP, key to ramping surface force
            structure to Global CONOPs levels outside the FYDP.
      --DD(X).--The DD(X) advanced multi-mission destroyer will be armed
            with an array of land attack weapons to provide persistent,
            distributed offensive fires in support of joint forces ashore.
            Transformational and leap ahead technologies include an
            integrated power system and electric drive; the Advanced Gun
            System with high rate of fire and magazine capability; the new
            Multi-Function Radar/Volume Search Radar suite; optimal manning
            through advanced system automation, stealth through reduced
            acoustic, magnetic, IR, and radar cross-section signature; and
            enhanced survivability through automated damage control and
            fire protection systems. The capacity in both hull form and
            integrated electric power system, and the revolutionary radar
            development work will allow us to spiral DD(X) to both an
            entirely new class of ships--our robust, sea-based missile
            defense CG(X) platform of the future--as well as other
            potential systems, like the electro-magnetic rail gun, in the
            years ahead.
        In addition to the surface combatant family of ships, our other
    high priority efforts include:
      --CVN-21.--We have accelerated transformational technologies from the
            CVNX development plan into CVN-21 while sustaining the CVNX-1
            development schedule submitted last year. This is the first new
            carrier design since 1967. The fiscal year 2004 budget request
            provides $1.5 billion in RDT&E and advanced procurement for the
            first CVN-21 and programs for split-funded construction for two
            years beginning in fiscal year 2007. The transformational
            technologies include a new electrical generation and
            distribution system, improved flight deck design with Electro-
            Magnetic Aircraft Launching System (EMALS), improved sortie
            generation, enhanced survivability, reduced manning, and
            incorporation of a flexible infrastructure that will allow the
            insertion of new capabilities as they evolve. CVN-21 will be
            the centerpiece of our Carrier Strike Groups in the future and
            will replace USS ENTERPRISE in fiscal year 2014.
      --VIRGINIA-class submarine (SSN-774).--The first four ships of this
            class are under construction: Virginia will commission in 2004;
            the keel was laid for Texas (SSN-775) in July 2002; Hawaii
            (SSN-776) was begun in 2001; and North Carolina (SSN-777) in
            2002. This class will replace LOS ANGELES-class (SSN-688)
            attack submarines and will incorporate new capabilities,
            including an array of unmanned vehicles, and the ability to
            support Special Warfare forces. It will be an integral part of
            the joint, networked, dispersed fleet of the 21st Century.
      --SSGN Conversions.--We have requested two additional conversions in
            fiscal year 2004; these ships will be configured to carry more
            than 150 Tomahawk missiles, enabling covert, large-volume
            strike. The SSGN will also have the capability to support
            Special Operations Forces for an extended period, providing
            clandestine insertion and retrieval by lockout chamber, dry
            deck shelters or the Advanced Seal Delivery System, and they
            will be arrayed with a variety of unmanned systems to enhance
            the joint force commander's knowledge of the battlespace. We
            will leverage the existing TRIDENT submarine infrastructure to
            optimize their on-station time. The first two ships, the USS
            OHIO and USS FLORIDA, enter the shipyard in fiscal year 2003 to
            begin their refueling and conversion. USS MICHIGAN and USS
            GEORGIA will begin their conversion in fiscal year 2004. We
            expect this capability to be operational for the first SSGN in
            fiscal year 2007.
      --Maritime Prepositioning Force Future (MPF(F)).--Our vision for the
            future Maritime Prepositioning Force and tomorrow's Amphibious
            force continues to develop. This fiscal year's budget and the
            Joint Forcible Entry Operations study will refine our effort
            and posture us for enhanced sea basing of Navy and Marine Corps
            assets. I expect MPF(F) ships will serve a broader operational
            function than current prepositioned ships, creating greatly
            expanded operational flexibility and effectiveness. We envision
            a force of ships that will enhance the responsiveness of the
            joint team by the at-sea assembly of a Marine Expeditionary
            Brigade that arrives by high-speed airlift or sealift from the
            United States or forward operating locations or bases. These
            ships will off-load forces, weapons and supplies selectively
            while remaining far over the horizon, and they will
            reconstitute ground maneuver forces aboard ship after
            completing assaults deep inland. They will sustain in-theater
            logistics, communications and medical capabilities for the
            joint force for extended periods as well.
        Other advances in sea basing could enable the flow of Marine and
    Army forces at multiple and probably austere points of entry as a
    coherent, integrated combined arms team capable of concentrating lethal
    combat power rapidly and engaging an adversary upon arrival. The
    ability of the Naval Services to promote the successful transformation
    of deployment practices of the other Services will dramatically improve
    the overall ability of the Joint Force to counter our adversaries'
    strategies of area-denial and/or anti-access. We are programming RDTE
    funds to develop the future MPF and examine alternative sea basing
    concepts in fiscal year 2008.
        FORCEnet is the enabler of the foregoing capabilities, and the
    operational construct and architectural framework for naval warfare in
    the joint, information age. It will allow systems, functions and
    missions to be aligned to transform situational awareness, accelerate
    speed of decisions and allow naval forces to greatly distribute its
    combat power in the unified, joint battlespace. It puts the theory of
    network centric warfare into practice. We are just beginning this
    effort and we have requested $15 million in funds to administer the
    development of FORCEnet, the cornerstone of our future C\4\I
    architecture that will integrate sensors, networks, decision aids,
    warriors and weapons. Programs that will enable the future force to be
    more networked, highly adaptive, human-centric, integrated, and enhance
    speed of command include:
      --E-2C Advanced Hawkeye Radar Modernization Program.--E-2 Advanced
            Hawkeye (AHE) program will modernize the E-2 weapons system by
            replacing the current radar and other aircraft system
            components to improve nearly every facet of tactical air
            operations. The modernized weapons system will be designed to
            maintain open ocean capability while adding transformational
            surveillance and Theater Air and Missile Defense capabilities
            against emerging air threats in the high clutter and jamming
            environment. The advanced Hawkeye will be a critical
            contributor to Naval Integrated Fire Control-Counter Air, and
            to Sea Strike and Shield. The fiscal year 2004 budgets over
            $350 million for continued development with first production
            planned for fiscal year 2008.
      --Navy and Marine Corps Intranet (NMCI).--NMCI continues to bring
            together Navy personnel, government civilians and contractors
            into a single computing environment. This program is fostering
            fundamental changes in the way we support critical war fighting
            functions, conduct Navy business, and train and advance
            Sailors. Fiscal year 2004 funding of $1.6 billion continues
            user seat rollout and cutover to the NMCI architecture,
            progressing toward a target end-state of 365,000 seats.
            Although NMCI seat cutover was slowed initially by the need to
            resolve the challenges of numerous, disparate legacy
            applications, the transition to NMCI has succeeded in
            eliminating more than 70,000 legacy IT applications and we are
            on track for the future.
        Sea Trial.--Commander, U.S. Fleet Forces Command (CFFC) is now in
    charge of our Navy's revitalized process of experimentation, and is
    rapidly developing emergent concepts and experimenting with new
    technologies to speed delivery of innovation to the fleet. CFFC will
    reach throughout the military and beyond to coordinate concept and
    technology development in support of future warfighting effectiveness.
    Embracing spiral development, the right technologies and concepts will
    then be matured through targeted investment and rapid prototyping.
        CFFC is working in concert with the U.S. Joint Forces Command to
    refine the Sea Trial process and integrate select wargames,
    experimentation and exercises. We are already testing new operational
    concepts and technologies like the Collaborative Information
    Environment, Joint Fires Initiative, and the Navy Joint Semi-Automated
    Force Simulation in operations and exercises. We will continue to
    pursue evaluation of multiple platforms and systems, including
    experimental hull forms and electro-magnetic rail guns, among others.
        The Systems Commands and Program Executive Offices will be integral
    partners in this effort, bringing concepts to reality through
    technology innovation and application of sound business practices.
    IV. Harvesting Efficiencies for Transformation
        We are working hard to identify and harvest the efficiencies needed
    to balance competing priorities and invest in our Sea Power 21 vision.
    Called Sea Enterprise, this process is intended to ensure our
    warfighting capability both now and in the future. It will help
    identify and produce those initiatives that both optimize our
    warfighting capability and streamline our organization and processes;
    to make it operate more efficiently, to reduce our overhead and to
    produce the savings needed for investment in recapitalization and our
    future. We have already identified several initiatives that have
    produced over $40 billion in savings and cost avoidance across the
    defense program--and many more billions outside the FYDP--to help fund
    our future. A few of the highlights include:
      --USN-USMC Tactical Aviation (TACAIR) Integration plan shows the
            promise of cross-service partnerships. It will maximize forward
            deployed combat power, enhance our interoperability, more fully
            integrate our services, and save $975 million across the FYDP.
            This aggressive effort introduces 200 modern aircraft in the
            next six years while retiring legacy F-14, F/A-18A/B, S-3, and
            EA-6B airframes, and it reduces our F/A-18 E/F and JSF total
            buy requirements by 497 aircraft while enhancing our
            warfighting capability. There is more than $30 billion in
            projected cost avoidance outside the FYDP as well.

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

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

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

                     STATEMENT OF GENERAL MICHAEL W. HAGEE

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

                               PREPARED STATEMENT

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

                 Prepared Statement of General Michael W. Hagee

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

                                  INTRODUCTION

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

                              BUILDING ON SUCCESS

        The President's fiscal year 2004 budget, together with your
    support, will provide a strong foundation on which we can continue
    building on our successes. Our focus is on improving our ability to
    operate as an agile, lethal, ready, and effective member of a broader
    joint force that takes the complementary capabilities provided by each
    Service, and blends them into an integrated and effective force for
    meeting future challenges.
        Increases in our Military Personnel accounts have a positive effect
    on the retention of our most valued assets--our Marines. Given the
    increasing pressure to modernize and transform the force, the Marine
    Corps is constantly working to identify and assess program tradeoffs to
    enable the most effectively balanced approach between competing demands
    and programs. These tradeoffs occur within a larger context of the
    Department's overall program tradeoff decisions, which is driving the
    Navy and Marine Corps to work more closely than ever before in our
    planning, budgeting, and decision making. An additional concern that
    complicates this process is the sizeable unfunded cost of the ongoing
    global war on terrorism.
        Challenges also arise from the changing realities of our National
    security environment. The Marine Corps is committed to the idea that we
    will fight as an integral part of a joint team. We continue to place
    high priority on interoperability, shared concept development, and
    participation in joint exercises with our sister services.
    Additionally, the security environment now demands that we pay more
    attention to our role in Homeland Defense, our critical infrastructure,
    and force protection--even as we deploy more forces overseas. These
    challenges demand that we balance competing priorities while remaining
    focused on maintaining excellence in warfighting.

    Adapting to a Changing, Dynamic World
        While we adapt the advantages of technology to meet the changing
    face of warfare, we draw strength from the unique culture and core
    values that make us ``Marines.'' We look for innovation in four broad
    areas to address future challenges: Transformational technology; New
    operational concepts; Refined organizations; and Better business
    practices.
        Innovative approaches culled from these efforts should provide
    insight into new capabilities that we can adapt for future warfighting.
    In this regard, we are currently engaged in an immediate and critical
    tasking to define how we, along with our partners in the Navy, intend
    to project Naval power ashore in the 2015-2025 timeframe. This effort
    requires the intellectual rigor and participation of all the elements
    of our Marine Air-Ground Task Forces and is influencing the entire
    Marine Corps--from our structure and training to the way we will fight
    on future battlefields as an integral component of a joint force.

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

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

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

                             TAKING CARE OF OUR OWN

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

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

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

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

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

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

                   OUR MAIN EFFORT--EXCELLENCE IN WARFIGHTING

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

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

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

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

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

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

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

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

                                   CONCLUSION

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

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

                   Prepared Statement of Senator Ted Stevens

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

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

                           OPERATIONS AND MAINTENANCE

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

                                   SEA BASING

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

                                  V-22 PROGRAM

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

                         PRIOR YEAR SHIPBUILDING COSTS

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

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

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

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

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

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

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

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

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

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

              IMMINENT DANGER PAY AND FAMILY SEPARATION ALLOWANCE

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

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

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

                                DEPLOYMENT DAYS

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

                                 NAVY RETENTION

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

                          RETIRING SHIPS AND AIRCRAFT

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

                             MARINE CORPS RETENTION

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

                                  NAVY RESERVE

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

                                   FLEET SIZE

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

                                    HARRIER

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

                                  SHIPBUILDING

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

                                  HOMEPORTING

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

                              PATROL COASTAL CRAFT

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

                                MISSILE DEFENSE

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

                                  UAV PROGRAM

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

                        LIGHTWEIGHT 155 HOWITZER PROGRAM

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

              FAMILY SEPARATION ALLOWANCE AND IMMINENT DANGER PAY

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

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

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

                          NAVY PROGRAMS IN NEW MEXICO

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

                           JOINT STRIKE FIGHTER (JSF)

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

                         ADDITIONAL COMMITTEE QUESTIONS

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

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

                         NAVAL FORCES--SOUTHERN COMMAND

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

                  JOINT STRIKE FIGHTER (F-35) PROGRAM PROGRESS

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

                                      V-22

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

                      MINE WARFARE FUNDING AND CAPABILITY

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

                                T-45 COCKPIT 21

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

                                     ______

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

                                   HSV PLANS

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

                              LONG-TERM HSV PLANS

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

                        LITTORAL COMBAT SHIP--HULL FORM

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

                                     ______

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

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

                              SUBCOMMITTEE RECESS

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

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                            WEDNESDAY, APRIL 9, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:03 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Shelby, and Inouye.

                                DEFENSE AGENCIES

                             Missile Defense Agency

    STATEMENT OF LIEUTENANT GENERAL RONALD T. KADISH, USAF,
                DIRECTOR
    ACCOMPANIED BY THOMAS P. CHRISTIE, DIRECTOR, OPERATIONAL TEST AND
                EVALUATION

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Our distinguished co-chairman is stuck in
    traffic.
        General Kadish. So were we, sir.
        Senator Stevens. Since it took me a long time to get in
    this morning and I only live 5 miles away, I appreciate what
    you're saying. He has asked us to proceed, if that's all right,
    and we'll do that.
        We welcome you and Mr. Christie, General. Thank you for
    being with us. You're really a trusted partner in the whole
    endeavor for national missile defense, and I'm sure Senator
    Inouye will make similar comments. This capability that you
    have in Alaska is very encouraging to us and we plan to go up
    there as soon as possible. We had one trip scheduled and had to
    cancel it. Our staff will be going over to Hawaii in the coming
    recess to visit that area, and we know that there has been a
    great deal of change. If it's possible, we'd enjoy both of you
    coming to join us on our trip, but I'm not sure that will be
    possible. We haven't got it scheduled yet because of the
    problems we have in the appropriations process right now.
        We look forward to receiving an update from you, and
    Senator Inouye will make some comments when he comes in, but
    right now, I would appreciate it if you would proceed with your
    statement.
        General Kadish. Thank you, Senator. Good morning, Mr.
    Chairman, members of the committee. I would like to take just a
    few minutes to highlight some of the key points about our
    missile defense program that we have today and really
    underscore the progress we've made to date.
        And if you would allow that my prepared statement in its
    entirety be----

                            MISSILE DEFENSE PROGRAM

        Senator Stevens. Your statements will go in the record.
        General Kadish. In early 2001, we started restructuring the
    missile defense program to develop capabilities to defend the
    United States, our allies, our friends, and our deployed forces
    against all ranges of missiles in all phases of flight. With
    the support of Congress and in particular this committee, we
    have made considerable progression in demonstrating key missile
    defense technologies and the integration of those technologies
    into a system.
        Our testing analysis gives us confidence that hit-to-kill
    technology works and that we can take the initial steps we are
    proposing to provide a modest initial defensive capability
    where none exists today.
        Altogether, we have made great progress in our missile
    defense program. Our testing has been aggressive and
    productive. Over the past 2 years we achieved four for five
    successful ground-based intercepts of long-range targets and we
    are three for three in our sea-based intercepts of medium-range
    targets. We were five for seven with the Patriot Advanced
    Capability, or PAC-3 interceptor.
        We are making steady progress with the airborne laser to
    develop the revolutionary speed of light technologies, but we
    have had failures and in all probability, we will have some
    more failures in this process. But this score card has
    increased our confidence in our basic technical approach.
        Last December, the President directed the Department of
    Defense to field an initial set of missile defense capabilities
    in view of our technical progress, and our total lack of
    missile defenses against the intermediate and long-range
    ballistic missiles. Given our fielding approach using the
    testbed we have been working on, and given our testing
    successes and our analysis of those to date, I believe we are
    ready for this step. With the President's decision, we now have
    a clear basic near-term architecture for a limited system to
    address a range of missile threats.
        I want to stress that we have no fixed long-term
    architecture, however. We will evolve and improve the
    capability of the Block 04 system over time so that when we
    propose to field initially--so what we propose to field
    initially in fiscal year 2004 and fiscal year 2005 may evolve
    to look very different maybe a decade later.

               EVOLUTIONARY CAPABILITY-BASE ACQUISITION APPROACH

        The number and type of missile defense assets and their
    locations and basing parameters may be expected to change to
    make the system more integrated and more capable. This is
    consistent with the approach I have described in previous
    hearings. We are building and fielding limited military useful
    capabilities as soon as they can be made available.
        We have said all along that when we do field, we will not
    have a system that will fully meet our missile defense needs,
    so there are no illusions there. The system we will be fielding
    initially will be modestly operational, but we went down this
    road knowing we would need improvement and we have a process
    that's specifically designed to make those improvements as soon
    as practicable.
        With an evolutionary capability-based acquisition approach,
    we put capability into the field, we test it, use it, get
    comfortable with it, learn what works well and what doesn't,
    and improve it as soon as we can. Before the President's
    decision, the fiscal year 2004 President's budget would have
    reflected the development of a set of testbed capabilities that
    could have been made operational. Today we are asking Congress
    to authorize and appropriate funds to allow us to add to this
    testbed and make it operational in fiscal year 2004.

                              OPERATIONAL TESTBED

        In other words, instead of building a testbed that might be
    used operationally, we are fielding an initial defensive
    capability that we will continue to test. Because of this
    relationship between initial defense capability and testing, we
    are asking that all associated funding with both efforts be
    under the defense-wide appropriations funding.
        Now with respect to the issue of operational testing before
    deployment, I would argue that we are faced today with some
    timely issues. This is a unique and unprecedented technology in
    its early stages of maturity. We have to strike a balance
    between our desire for perfection in missile defenses that we
    employ and our desire to have as soon as possible some
    defensive capability which does not exist today.
        We can continue to test the elements and components of the
    system and we can use them to defend ourselves. I believe we
    can do this because we have shown that the nuts and bolts of
    the missile defense system and its capabilities we are funding
    to build upon Block 04 can work.
        Over the past 2 years, we have conducted a total of 55
    flight tests and 60 ground tests. Seventeen of these tests were
    intercept flight tests. These tests built our confidence. We
    know hit-to-kill works. We have had a significant degree of
    repeatability represented in the testing up to date, and we are
    well along our goal of demonstrating this reliability.
        Mr. Christie will state that our relationships, I believe,
    that we are building between Operational Test and the Missile
    Defense Agency are in good shape, and that we are structured to
    make the best decisions in the interests of missile defense.
        Regardless of the names we apply to our testing, we must
    have the assets and infrastructure in the field if we are going
    to begin to test the system in operationally realistic
    conditions. If we do not have the weapons and sensors fielded
    in operationally useful locations, we cannot really do a good
    job of looking at how they work. This program and its budget
    proposes to do just that.
        Our intentions are to test the complete system as soon as
    possible. Over the next 2 years we are planning another 68
    flight tests, 58 ground tests, and about the same number of
    intercept tests as before. We have done the testing and have
    confidence to proceed, and we want to continue to strike the
    right balance in the testing effort.
        The elements of the testbed will also have some inherent
    defensive capability. We can do operational testing while
    having the system on alert. We should take advantage of that.
        I believe, Mr. Chairman, that we are ready to take the next
    step in missile defense for another reason. Our testbed
    evolutionary approach to a missile defensive capability is
    rational from a cost standpoint as well. We do not now have
    adequate understanding of our long-term architecture to submit
    a budget committing tens of billions of dollars, and we don't
    need to submit such a budget to achieve our goals in the
    interim.

                                FIELD CAPABILITY

        We are able, however, to purchase a fielded capability,
    through small numbers, and this approach will allow us to
    control costs. With an increase of about $1.5 billion over 2
    years, we can provide this country with a modest missile
    defense capability where none exists today.
        Mr. Chairman, America's missile defense program is on
    track. The Missile Defense Agency is doing what we told
    Congress it would do, and your support has been important to
    the progress we have made. We listened to your concerns and we
    sought to address them in a responsible manner. Our tests and
    analysis have given us the confidence we can take the first
    steps toward initial defensive operations while we continue to
    prove out our technology and demonstrate missile defense combat
    utility through a realistic testing regime.

                               PREPARED STATEMENT

        I believe there are tremendous benefits in putting some
    threat-precedented technology into the field in manageable
    increments to provide some defense, to learn more about it and
    gain experience, and improve it over time. Thank you, Mr.
    Chairman, and I think I will stop there to allow more time for
    questions.
        [The statement follows:]
           Prepared Statement of Lieutenant General Ronald T. Kadish
        Good morning, Mr. Chairman, Members of the Committee. It is an
    honor to appear before you to present the Department of Defense's
    fiscal year 2004 Missile Defense Program and budget.
        In early 2001 we restructured the missile defense program to
    develop the capability to defend the United States, our allies and
    friends, and deployed forces against all ranges of missiles in all
    phases of flight. With the support of Congress, we have made
    considerable progress in demonstrating key ballistic missile defense
    (BMD) technologies and system integration. Our testing and analysis
    give us confidence that hit-to-kill technology works and that we can
    take the initial steps we are proposing to bolster defenses against
    short- and medium-range ballistic missiles and introduce a modest
    defensive capability to defeat a limited long-range threat. Today I
    will review our progress, discuss why we are confident in our approach,
    and outline our plans and challenges ahead.
        Over the past two years we have conducted several successful
    intercept tests. We achieved four for five successful long-range,
    Ground-based Midcourse Defense (GMD) intercept flight tests,
    demonstrating the hit-to-kill technologies of the Exo-atmospheric Kill
    Vehicle, critical sensor technologies, and the integration of many
    geographically dispersed missile defense assets. The failure of the
    most recent such test (Integrated Flight Test-10) last December
    resulted from the non-separation of the interceptor and the surrogate
    booster rocket. This was not a failure of new missile defense
    technology, but a failure of our quality control processes. We are
    increasing our already focused quality control efforts. We are taking
    steps to ensure this separation problem is not repeated. Furthermore,
    future GMD tests will no longer use the surrogate booster and instead
    will use one or both of the boosters currently under development.
        We are three for three in our ship-based exo-atmospheric intercept
    tests. Last year Aegis BMD successfully completed its Aegis Lightweight
    Exo-Atmospheric Projectile (LEAP) Intercept (ALI) project. Based on
    these results we accelerated the insertion of the follow-on Aegis BMD
    capability into the Test Bed. Our third intercept in November 2002 was
    the first ever intercept of a ballistic missile in the ascent phase of
    flight.
        Patriot Advanced Capability 3 (PAC-3) has made significant strides.
    Since January 2001, we have had five for seven successful intercepts of
    ballistic missile targets and have begun fielding the first PAC-3
    missiles. We also executed more than a dozen successful test flights of
    the Airborne Laser (ABL) aircraft, completed significant aircraft
    modifications, and accomplished successful subsystem testing and full-
    up ground-tests of the first laser module. While we are in the
    difficult phase of integrating the components into the ABL, our
    progress to date has increased our confidence that ABL can eventually
    be integrated into the BMD system (BMDS).
        Mr. Chairman, America's missile defense program is on track. The
    Missile Defense Agency is doing what we told Congress it would do. We
    listened to your concerns and have sought to address them in a
    responsible manner. We have faced significant technical and management
    challenges, but through aggressive testing we have proven that hit-to-
    kill technology works. We have demonstrated system integration through
    complex system testing. These tests, combined with analysis of
    simulations and exercises, give us confidence that the system can take
    the first steps toward initial defensive operations while performing as
    a test bed for further realistic testing and continued spiral
    development.
        The President's fiscal year 2004 budget will allow us to continue
    this significant progress and is structured to incorporate the
    recommendations of the Defense Science Board summer study of 2002.

    Evolutionary Approach to Missile Defense
        The BMD system involves many sensors and interceptors that are
    integrated and layered to enable engagements against hostile missiles
    in the boost, midcourse, and terminal phases of flight. Layered
    defenses can allow multiple shot opportunities across all of the
    engagement segments and potentially within each one of those segments,
    greatly enhancing our ability to handle countermeasures and destroy in-
    flight missiles and their payloads.
        As I have explained in past hearings, we are building the missile
    defense system using an evolutionary acquisition approach, so that the
    system's capability can be enhanced over time. Our plan continues to be
    one of incrementally providing the decision makers the ability to field
    militarily useful capabilities based on their technological readiness,
    suitability for operational use and threat developments.
        Last December the President directed the Department to field an
    initial set of missile defense capabilities in order to reduce the
    vulnerabilities of the United States, our troops, and our allies and
    friends. Given our fielding approach, and given the successful testing
    we have accomplished to date, I believe we are ready for this. The
    proposed budget for fiscal year 2004 and across the 2004-2009 Future
    Years Defense Program (FYDP) supports Research, Development, Test and
    Evaluation (RDT&E) activities to accomplish that goal. We plan to begin
    operating modest land and sea defense capabilities in 2004 to provide
    limited protection of our country as well as our troops and critical
    assets overseas.
        In missile defense, we deal routinely with revolutionary
    technologies and unprecedented engineering requirements. The program we
    are currently executing recognizes the unique challenges we face and
    sets out a disciplined course to develop the BMD system in an
    evolutionary way. Having spent the last couple of years looking at
    different missile defense options, we are now narrowing our program
    activities and focusing on development and fielding of the most
    promising elements.
        Consistent with the approach I have described in previous hearings,
    we are building and fielding limited, militarily useful capabilities as
    soon as they can be made available. This approach takes into account
    known and projected threats and the present state of technology. With a
    capability-based acquisition approach we put capability into the field,
    test it, use it, get comfortable with it, and learn what works well and
    what does not. We have structured Test Bed fielding opportunities to
    occur in ``blocks'' every two years to improve what we have fielded as
    needed. Block 2004 (initial defense capabilities) represents 2004-2005,
    Block 2006 represents 2006-2007, and so on. These blocks will deliver
    elements and components that are ready for continued rigorous testing
    and full integration into the system.
        With the President's decision, we now have a basic near-term
    architecture for a limited system to address a range of missile
    threats. I want to stress that we have no fixed, long-term
    architecture. We will evolve and improve the capability of the Block
    2004 system over time, so that what we propose to field initially in
    2004 and 2005 may evolve to look very different a decade later. The
    number and type of missile defense assets and their locations and
    basing arrangements may be expected to change to make the system more
    integrated and capable.
        We have adopted this evolutionary approach because a single
    acquisition cycle is not responsive to rapid changes in threat and
    technology and is not structured to deal with surprise. We want to
    avoid prematurely constraining system design by using the traditional
    requirements process and waiting up to twenty years or more for a
    defensive capability that would result from using traditional
    acquisition rules. In a world marked by increasing ballistic missile
    activity, our nation, forces, and allies cannot afford to wait that
    long.
        In using this evolutionary approach, we still have the ability to
    incorporate the discipline and intent of the traditional acquisition
    process. For example, the warfighting community has been heavily
    involved from the beginning in the development of system elements and
    components. We are successfully using a spiral development process to
    put new technologies into play more quickly than if we were to use the
    traditional approach. Spiral development requires regular dialogue and
    active participation between user and developer for delivering a
    militarily useful set of capabilities. Once we field the initial
    capability, uniformed personnel will operate the system.
        Despite the many uncertainties we face, this approach allows us to
    be good stewards of the taxpayers' money. The President's recent
    announcement stands as a good example of this. We are not making an
    early commitment to large-volume serial production and very large-scale
    investments. Our fielding commitment will be scaled over time and rise
    with our confidence that we are on the right development path for this
    complex, multifaceted system.

    Aggressive Research, Development and Test Activities
        As we prepare to implement the President's directive, we plan to
    continue the program's intensive testing activities up to and beyond
    the 2004-2005 timeframe. We have a single, robust RDT&E program
    dedicated to the development and demonstration of missile defense
    technologies and integration concepts. In fact, consistent with our
    investments over the past two years, the lion's share of the fiscal
    year 2004 budget request of $7.7 billion for the Missile Defense
    Agency, roughly $6 billion, will support RDT&E activities that are not
    directly tied to system fielding. Significant development efforts in
    fiscal year 2004 include continued work on Theater High Altitude Area
    Defense (THAAD), ABL, and kinetic energy boost-phase interceptors in
    the post-Anti-Ballistic Missile (ABM) Treaty environment.
        These aggressive RDT&E activities are the basis for proceeding as
    the President has directed and for continuing development work to build
    a multi-layered BMD system. We will continue our practice of assessing
    these activities on a regular basis to see if they can be accelerated
    or whether they must be truncated or modified in some manner. RDT&E
    activities occurring in fiscal year 2004 will contribute to Blocks
    2004, 2006, 2008 and 2010.
        We are still evaluating the impact of our withdrawal from the ABM
    Treaty. The treaty successfully did what it was intended to do. It
    severely restricted missile defense development and fielding options.
    The President's action has made it possible to begin to develop and
    test aggressively the full range of missile defense technologies and
    pursue capabilities that make the most sense from the standpoints of
    technology, operations, and cost.
        For example, as a result of the treaty withdrawal, Aegis BMD, the
    sea-based defense element, began its successful participation in GMD
    integrated flight tests conducted last October and December. While
    initially only collecting boost and ascent phase radar data, Aegis BMD
    has begun engineering efforts to become a full participant in future
    tests and will eventually provide fire control data to the BMD system.
        Our intercept tests against long-range ballistic missiles are very
    complex, yet since October 1999 we were forced to restrict ourselves to
    the same intercept flight geometries because of artificial constraints
    in our current Test Bed and our obligation to remain compliant with the
    ABM Treaty. Today, in order to test our GMD interceptors, we must
    launch targets from Vandenberg, AFB in California and interceptors from
    Kwajalein Atoll in the Pacific Ocean. We are changing that. The Test
    Bed we are building will introduce flexibility into our test approach
    and help overcome some basic geographic and geometric limitations by
    allowing us to test weapons and sensors against ballistic missiles of
    all ranges along different azimuths and using different trajectories.
    For test purposes we will introduce variable target launch and impact
    points and engagement areas.
        Robust, realistic testing is absolutely critical to developing an
    effective missile defense system. Over the past two years we conducted
    a total of 55 flight tests and 60 ground tests. Seventeen of these
    tests were flight-intercept tests. Each test builds our confidence in
    the BMD system. From our flight-testing, we know that the hit-to-kill
    approach works. We know our sensors can successfully detect and track
    the target and that our software algorithms can discriminate between
    reentry vehicles and basic decoys and debris. We know our battle
    management system can generate orders that put a kill vehicle in a
    position to achieve intercept. We will continue to refine and improve
    the system's performance in all areas. Our test program continues to
    add to our confidence that the basic technologies are sound and that
    they will work together to provide the nation an effective BMD system.
        Our program and budget will continue to maintain a high tempo of
    increasingly complex ground- and flight-testing. Over the next two
    years we are planning another 68 flight tests, 58 ground tests, and
    maintaining the same pace of intercept tests as before. We do system
    testing to give us confidence that we have the ability to integrate
    geographically dispersed missile defense elements and components into
    an effective system. This does not include the many experiments we
    conduct routinely, the modeling and simulation activity, and the
    wargame exercises. Our computer predictions are very valuable in this
    process and give us a great deal of confidence that we are on the right
    paths.
        We remain committed to our aggressive testing approach, where we
    mature midcourse, boost, and terminal missile defense components and
    elements through rigorous testing under increasingly realistic and
    challenging conditions. When we have adequately demonstrated
    technologies, decisions can then be made concerning their integration
    into blocks for fielding. Testing activities remain central to what we
    do and are well supported within our funding request.

    Initial Defense Capabilities
        The Congress has already funded plans to put five midcourse
    interceptors into the test bed in silos at Fort Greely in Alaska,
    develop Aegis BMD, and test the SM-3 interceptor at the Pacific Missile
    Range Facility in Hawaii. Other activities are currently underway to
    improve the missile defense Test Bed by upgrading or developing launch
    sites (including Vandenberg, AFB), radar sensors, battle management and
    command and control components, communications terminals and networks,
    and associated test infrastructure in the United States and the
    Marshall Islands (including airborne, sea-based, and ground-based data
    collection assets).
        Today we are asking the Congress to appropriate funds that will
    allow us to add to this Test Bed and make it operational by 2004. These
    initial defense capabilities, fielded over a two-year period, will
    include ground-based interceptors to counter long-range threats, sea-
    based interceptors to defeat short- and medium-range threats,
    additional PAC-3 units, and early warning and tracking sensors based on
    land, at sea, in the air, and in space.
        Before the President's decision, the fiscal year 2004 President's
    Budget would have reflected the development of a set of Test Bed
    capabilities that could have been made operational. Instead of building
    a Test Bed that might be used operationally, we are fielding an initial
    defensive capability that we will continue to test. All RDT&E
    activities will support the initial defense capability, and the system
    elements and components we field will continue to support RDT&E.
    Because of the relationship between initial defense capabilities and
    testing, we are asking that all funding associated with both efforts be
    under Defense-wide appropriations RDT&E. With the December announcement
    we have quickened the pace at which we are moving forward, but we have
    not changed the direction in which we are moving.
        We are proposing to do in fiscal year 2004 what we said we were
    going to do in previous hearings, that is, field tested missile
    defenses a little at a time using a step approach. The missile defense
    operations we are proposing are unprecedented, and there still is much
    to learn. I believe there is tremendous benefit in putting this
    unprecedented technology into the field, in manageable increments, to
    provide some defense, to learn more about it, gain experience with it,
    and improve it over time.
        The Israeli Arrow program stands out as an example of how fielding
    militarily useful capability in block increments and in a timely manner
    can work and how successful it can be. With only four successful
    intercept flight tests, Israeli officials declared their first Arrow
    battery operational on October 17, 2000 and fielded that country's
    first capability to defeat incoming ballistic missiles launched from
    nearby states. The Israeli system has been operational for more than
    two years now, and during that time it has conducted additional
    intercept and flight tests to enhance the system's performance. Plans
    are moving forward to augment it even further. Surrounded by states
    having an active interest in ballistic missiles, Israel found a way to
    field a limited defensive capability on an accelerated timeline and at
    a time when it could not afford to wait for system testing to be
    completed.
        We in the United States, of course, are not strangers to fielding
    an unprecedented military capability on an accelerated schedule. Our
    leadership struggled in the early stages of deploying the first
    reconnaissance satellites and land- and sea-based ballistic missiles.
    Urgent national security requirements pressed us to deploy capability
    soon, and through trial and error we did. Despite test failures, the
    country persevered and made militarily useful capabilities operational.
    Since that time, we have dramatically improved the capabilities of
    those first-generation systems. The parallels between these pioneering
    programs and the missile defense program are clear.
        I believe, Mr. Chairman, that we are ready to take this next step
    in missile defense. Our fielding approach will not only help
    rationalize the force structure we deploy from the technological and
    threat standpoints, but also from the standpoint of cost. We do not now
    have adequate understanding to submit a bill of many tens of billions
    of dollars for a huge, long-term fixed architecture. We are able,
    however, to purchase, produce, and field capabilities in small numbers.
    This approach will allow us to control costs. With a modest investment
    and increase by the Department of a total of $1.5 billion spread over
    the fiscal year 2004 and 2005 budgets, we will provide this country
    with militarily useful capabilities where none exists today.
        In short, this $1.5 billion primarily will add a small number of
    ground-based interceptors as well as more SM-3 interceptors to the test
    bed capability we are already building. Future fielding decisions, as
    we have said all along, will be made in the outlying years based on the
    progress of technology and the evolution of the threat, subject to the
    annual congressional appropriations process.

    Confidence in Initial Defensive Operations
        In assessing our level of confidence with the planned initial
    missile defense capabilities, we have to strike a balance between our
    desire for perfection in the missile defenses we deploy and our desire
    to have as soon as possible a defensive capability where none exists
    today.
        Adequate testing is the key to achieving that balance. And while
    this testing may not fit the mold of classical operational testing that
    would traditionally take place prior to full-rate production, we do
    follow a testing discipline that I believe can give us the confidence
    to say that what we deploy will work as we have said it would under
    threat circumstances that we believe we might have to face.
        I believe that to strike the right balance we must go through an
    intense period of testing to demonstrate that the technologies on which
    we are relying can work consistently under conditions that are
    increasingly stressful and realistic. We have spent the past two years
    demonstrating the technologies we propose to employ in the Block 2004
    Test Bed. We have said all along that when we do field we will not
    field a system that will fully meet our missile defense needs. We will
    face limitations and have gaps, let there be no illusions there. The
    system we are initially fielding will be limited operationally. But we
    went down this road knowing that there would be gaps and with a process
    that is specifically designed to fill those gaps and make up for
    performance limitations as soon as practicable.
        Among the limitations that should be included here is that of
    operational experience. We need to build operational experience over
    time with the system that will be guarding our nation and our troops.
    There is no better way to do that then to put basic elements out into
    the field and to begin working with those assets to develop the
    doctrine and concepts of operation we will need and to train the
    military personnel who will operate it.
        We have spent significant amounts of money on testing the GMD and
    Aegis BMD elements of system. All of the tests to date have been what
    we have called ``developmental tests.'' Regardless of the names we
    apply to our testing, we must have assets and infrastructure in the
    field if we are going to begin to test that system under operationally
    realistic conditions. If we do not have the weapons and sensors fielded
    at operationally useful locations, we cannot really do a good job of
    hooking it all up to make sure it works.
        The President's decision allows us to put this materiel out in the
    field for testing, in locations that make sense from an operational
    point of view. Given the recent events in the international security
    environment, the President's decision reflects an urgent need to make
    that test bed as operational as we possibly can. That decision also
    recognizes that we will not be fielding the perfect system at the
    outset.
        What we are faced with today is a timing issue. Must we do what has
    been traditionally called ``operational testing'' before we can say
    that we have a capability we can use in an extreme security situation,
    or can we do both? Can we continue to test the elements and components
    of a system we also could use to defend ourselves if needed? I believe
    we can.
        Why do I believe that? Because we have shown that the nuts and
    bolts of the missile defense capabilities we are planning to field in
    Block 2004 can work. We have had a significant degree of repeatability
    represented in the tests we have conducted to date, and we are well
    along in our goal of conducting these tests reliably. We are now to the
    point where we need to assemble selected missile defense elements into
    a test bed that will permit operationally realistic testing using
    different azimuths and trajectories, different launch and target
    points, and different arrangements in our sensors and weapons. That
    test bed will allow us to test in different ways so that we can refine
    our all-too-important battle management and command and control
    infrastructure. The elements of the test bed also will have some
    inherent defense capability. We can do operational development testing
    while having the system on alert. We should take advantage of that.
        Our intentions are to test the complete system and to be ready to
    respond to ballistic missile threats against the United States, our
    deployed forces, and our friends and allies. We have conducted the
    rigorous testing needed to give us the confidence that we are far
    enough along to do operationally realistic testing in an integrated
    way. Testing will always be an important part of this system--always.
    We will always be improving what we have in the field. The budget we
    have submitted will support the testing required to ensure that the
    elements of the Block 2004 system we would like to field will
    adequately serve the defense needs of this nation.
        Our RDT&E activities are extensive and are important part of our
    acquisition approach. Below are three areas of special interest.

                BMD System Radar Activity
        The MDA's Family of Radar concept is continuous and flexible global
    detection, tracking, discrimination, and hit assessment. Ideally, we
    want to be able to watch missile payloads deploy and accomplish prompt
    and early battle assessment. We are currently pursuing multiple sensor
    technologies and identifying and developing sensors to give the BMD
    system the ``eyes'' it will need. In order to identify the most
    promising technologies and reduce risk, we are investigating, in
    parallel, sensor alternatives on land-, sea-, air- and space-based
    platforms to add robustness to the BMD system and improve opportunities
    to collect multiple phenomenology on the threat missile or target
    complex. Evaluations of different sensor and weapon combinations and
    alternatives will help us assess their overall benefit to an
    integrated, layered BMD system. An important element in this effort is
    the mobile Sea-Based X-Band radar (SBX), which we plan to build by
    September 2005 to greatly improve both testing and our initial defense
    capability.
        The BMDS Radar project, a new activity, is funded in the fiscal
    year 2004 budget to expand the engagement battle space and assess
    missile defense concepts of operation that we were not allowed to
    consider under the ABM Treaty. We will validate the concept of forward-
    basing and sensor layering and evaluate advanced algorithms using both
    MDA- and non-MDA-owned sensors. Current plans call for the BMDS Radar
    to be available for integration into the Test Bed in late 2006. We will
    support continuous sensor research to improve capabilities and develop
    advanced algorithms for Block 2008 and beyond.

                BMD System Infrared Sensor Activities
        The Department restructured the Space Based Infrared System-Low
    (SBIRS Low) element in fiscal year 2002, renaming it the Space Tracking
    and Surveillance System (STSS). We will explore new technologies to
    enhance missile detection, improve reporting on ballistic missile
    launches regardless of range, azimuth, or launch point, and provide
    critical midcourse tracking and discrimination data.
        The Russian-American Observation Satellites (RAMOS) project is a
    cooperative effort between the United States and the Russian Federation
    to improve early warning technologies. RAMOS represents an innovative
    space-based sensor R&D initiative. We are proceeding towards a joint
    Preliminary Design Review this summer and expect to conclude the design
    and development phase in early fiscal year 2005. The United States is
    actively striving to reach a bi-lateral agreement to conduct activities
    beyond the design and development phase. If we are able to move forward
    with this project, we would launch two satellites in late fiscal year
    2008.

                BMD System Interceptor Activity
        Our longer-term goal is to develop low-cost enhanced interceptors
    for integration with different platforms to defend against missiles in
    the boost, midcourse, and exo-atmospheric terminal phases of flight. We
    are consolidating all next-generation kinetic energy interceptor
    (booster and kill vehicle) development efforts and placing them under
    our BMDS Interceptor activity. Relying heavily on existing hardware and
    proven technology, we will develop a hit-to-kill boost phase capability
    by Block 2008 and deliver capability enhancements for Block 2010 and
    beyond.
        In fiscal year 2004 we will begin developing a space-based kinetic
    energy interceptor Test Bed to explore the technological feasibility
    and operational advantages of engagements from space. This plan is
    consistent with the Defense Science Board's recommendation, released
    last August, to establish a comprehensive development program for a
    space-based kinetic system. Following up on last year's successful
    experiments to understand key sensor technologies, we will conduct in
    2004 a Near Field Infra-Red Experiment to observe from space a boosting
    rocket. This data will assist in the selection of seeker and sensor
    technologies for a ground-based boost interceptor and development of
    interceptor guidance and homing algorithms.

    Block Activities and Budget
        We are working within the MDA and with the Department's operational
    community to meet the President's objective to establish an initial
    defense capability in 2004, which begins with Block 2004. The following
    describes by block our planned fielding opportunities across the FYDP.

                Block 2004
        This block continues development and integration of elements,
    components, and facilities in the Test Bed. Block 2004 RDT&E funding
    will deliver capabilities directed by the President for operational use
    in fiscal year 2004-2005. We plan to add different capabilities to
    point-defense capabilities already provided by PAC-3 units. This
    initial fielding will grow the RDT&E program and expand the physical
    infrastructure of the Test Bed.
        Funds in this block will enable us to conduct major target and
    countermeasure development and capability demonstrations, integration
    tests, and experiments. We are investing in a substantive system test
    program to test system command, control, and battle management (C\2\BM)
    and communications across the elements. The Block 2004 Master Test Plan
    lays out the strategy for conducting a comprehensive set of integrated
    and distributed ground- and flight-tests to verify performance and
    characterize the capability of the system. This test program will form
    the basis of operational and military utility assessments of the Block
    2004 initial defense capability.
        We will have three major system integration flight tests, the first
    of which is a large-scale integration event that tests C\2\BM and
    communications during multiple element intercept tests. We plan to
    demonstrate C\2\ capabilities and communications among C\2\ and battle
    management nodes, weapons, and sensors and to continue work with the
    Services, Combatant Commands, and the Office of the Secretary of
    Defense to ensure BMD system interoperability with legacy and planned
    Department systems and standards.
        We are requesting $3.2 billion in fiscal year 2004 to support RDT&E
    for fielding Block 2004. Our estimated expenditure for Block 2004
    activities across the FYDP is $6.2 billion (see Table 1).

                                                        TABLE 1.--BLOCK 2004 FUNDING FISCAL YEAR 2002-09
                                                                       ($M then-year) \1\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Fiscal year--                                    FYDP     Totals
                                                         --------------------------------------------------------------------------------  fiscal    fiscal
                           Project                                                                                                          year      year
                                                            2002      2003      2004      2005      2006      2007      2008      2009     2004-09   2002-09
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    C\2\BMC Block 2004..................................        21        80       114        79  ........  ........  ........  ........       194       295
    Hercules Block 2004.................................  ........  ........        18        27  ........  ........  ........  ........        46        46
    Joint Warfighter Support Block 2004.................  ........  ........        24        13  ........  ........  ........  ........        37        37
    Test & Evaluation Block 2004........................        47        57        37        33  ........  ........  ........  ........        70       174
    Targets & CM Block 2004.............................        75       104       197       170  ........  ........  ........  ........       367       547
    THAAD Block 2004....................................       808       888       622       635        65  ........  ........  ........     1,322     3,018
    GMD Test Bed Block 2004.............................       636       452     1,205       868  ........  ........  ........  ........     2,073     3,161
    Aegis BMD Test Bed Block 2004.......................       413       440       648       894        98  ........  ........  ........     1,640     2,492
    ABL Block 2004......................................       454       348       345       150  ........  ........  ........  ........       494     1,296
                                                         ---------------------------------------------------------------------------------------------------
          TOTALS........................................     2,454     2,369     3,212     2,868       163  ........  ........  ........     6,242    11,065
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Numbers may not add exactly due to rounding.

        Boost Elements.--We are developing directed energy and kinetic
    energy boost phase intercept capabilities to create a defense layer
    near the hostile missile's launch point. We require quick reaction
    times, high confidence decision-making, and redundant engagement
    capabilities to counter ballistic missiles in this phase.
        ABL is currently under development to acquire, track, and kill
    ballistic missiles in boost phase using speed-of-light technology. ABL
    integrates three major subsystems (Laser; Beam Control; and Battle
    Management, Command, Control, Communications, Computers and
    Intelligence (BM/C\4\I)) into a modified commercial Boeing 747-400F
    aircraft. We will continue major subsystem integration and testing
    activities. Block 2004 activities involve completion of ground-testing,
    to include first light on the test bed aircraft, first flight of the
    complete weapons system, and the successful track and high-energy laser
    engagement of a missile-shaped target board dropped from high-altitude.
    In fiscal year 2005, we will deliver one aircraft for BMD system
    integration and testing and demonstrate a missile shoot-down against a
    boosting threat-representative target.
        Midcourse Elements.--Midcourse defense elements engage ballistic
    missiles in space after booster burnout and before the warhead re-
    enters the atmosphere. The GMD element defends against long-range
    ballistic missile attacks, and Aegis BMD will counter from the sea
    medium- and short-range ballistic missiles.
        The Department's plans are to add by the end of fiscal year 2004
    one more Ground-Based Interceptor (GBI) at Fort Greely in Alaska for a
    total of six GBIs at that site, and four interceptors at Vandenberg Air
    Force Base, for a total of up to 10 interceptors at both sites. The
    decision to develop two interceptor sites is consistent with our
    layered approach and operational concept and will allow us to work
    through critical integration, battle management, and command and
    control issues early on.
        There are a number of other activities we need to undertake in
    fiscal year 2005. We are asking for appropriations to produce up to ten
    additional GBIs for fielding at the Fort Greely site, for a total of
    sixteen interceptors in Alaska and four in California. We also plan to
    produce by the end of 2005 between ten and twenty SM-3 missiles for
    deployment on three Aegis ships converted to the missile defense
    mission. Because we are starting from a base of zero, each interceptor
    we field between now and 2005, up to the full complement of twenty
    ground-based and twenty sea-based interceptors, will increase
    significantly our overall capability to defend this country, our
    troops, and friendly countries against long- and medium-range threats.
        Included in the Test Bed and as part of the initial missile defense
    architecture are plans for integrating Early Warning Radars (EWR) at
    Eareckson AS (the Cobra Dane radar at Shemya, Alaska) and Beale AFB
    (Upgraded EWR). We will add to this infrastructure multiple fire
    control nodes and improved lines of communications connecting sites in
    Alaska and the continental United States using fiber optics and
    satellites. As you know, the Administration is working to secure allied
    approval to upgrade and integrate into the BMD system early warning
    radars currently located in the United Kingdom and Thule, Greenland to
    view threat missiles launched out of the Middle East. The United
    Kingdom already has approved the use of the Fylingdales radar. We also
    plan to build by September 30, 2005 a Sea-Based X-Band Radar (SBX) to
    improve the testing regime and enhance initial missile defense system
    performance.
        We have made dramatic progress in recent months with the GMD
    element, including in the areas of silo construction, development of a
    nationwide communications network, and integrated flight-testing. We
    have excavated six silos at Fort Greely, seven weeks ahead of schedule,
    and we are in the process of constructing and establishing appropriate
    security for multiple Test Bed facilities at Fort Greely and Eareckson.
        By the end of 2005, we will upgrade SPY-1 radars on fifteen Aegis
    warships for enhanced surveillance and track capability. Three
    prototype surveillance and track Aegis destroyers will be available
    starting in 2003; we will modernize additional destroyers for
    surveillance and track and BMD engagement capability. Two Aegis
    cruisers in addition to the USS LAKE ERIE, our test cruiser, will
    receive BMD engagement modifications.
        The next SM-3 flight test, scheduled for later this year, will use
    a reengineered Monolithic Divert and Attitude Control System (MDACS)
    for the first time in the interceptor's kinetic warhead. MDACS has
    proved to be more reliable than the previous model, faster to build,
    and less expensive. Five at-sea flight tests and numerous tracking
    exercises, including participation in GMD integrated flight-tests, are
    planned through 2005. Our cooperative research with Japan will continue
    to enhance the capabilities of the SM-3 interceptor. The focus of that
    research is on four components: sensor, advanced kinetic warhead,
    second stage propulsion, and lightweight nosecone.
        Terminal Elements.--THAAD is designed to be rapidly deployable and
    protect forward-deployed United States and friendly troops, broadly
    dispersed assets, population centers, and sites in the United States by
    engaging short- to medium-range ballistic missiles or their payloads at
    endo- and exo-atmospheric altitudes. THAAD could have more than one
    intercept opportunity against a target, a layering potential that makes
    it more difficult for an adversary to employ countermeasures
    effectively. This terminal defense capability will help mitigate the
    effects of a WMD payload.
        This year we will complete missile and launcher designs, initiate
    manufacturing of missile and launcher ground test units, and begin
    testing the first completed radar antenna. We will continue fabrication
    of the second radar and building the battle manager and launcher test
    beds. A total of four exo-atmospheric flight tests at the White Sands
    Missile Range, New Mexico are planned for fiscal year 2004-05.
        PAC-3 provides terminal missile defense capability against short-
    and medium-range ballistic missiles, anti-radiation missiles, and
    aircraft with a low radar cross-section employing advanced
    countermeasures. PAC-3 successfully completed initial operational
    testing last year, intercepting ballistic missiles, aircraft, and
    cruise missiles. The tests uncovered problems that we have since
    corrected in collaboration with the Army. We have completed development
    of the PAC-3 missile and made C\2\BM modifications to enable PAC-3's
    integration into the BMD system. We will continue to conduct PAC-3
    tests this year. Later in Block 2004 we will demonstrate PAC-3's
    integration with other BMD system elements.
        With the support of Congress, the Department already has
    accelerated PAC-3 missile production and currently has a plan to
    increase that production rate to 20 missiles per month in 2005. Given
    current production plans, by the end of 2005 the PAC-3 inventory will
    stand at 332 missiles.
        The Department has transferred PAC-3 procurement and RDT&E funding
    to the Army, which is reflected in the Army's fiscal year 2004 budget
    request. The MDA will retain responsibility for defining and testing
    BMD system interoperability and continue to work with the Army on PAC-3
    engineering, development, and testing. The Department realigned the
    Medium Extended Air Defense System (MEADS) program on March 31, 2003 to
    the Army.
        The Arrow Weapon System, developed jointly by the United States and
    Israel to counter short- to medium-range ballistic missiles, is
    operational at two sites in Israel and interoperable with U.S. missile
    defense elements. We worked with Israel to deploy its first two Arrow
    batteries, and are currently assisting that country to procure a third
    battery.
        The Arrow System Improvement Program, a spiral development upgrade
    of the current operational system, includes technical cooperation to
    improve the performance of the Arrow system and test it at a U.S. test
    range. The first flight test was conducted successfully on January 5,
    2003. We continue to support additional Arrow flight-testing to assess
    technology developments and overall system performance and to collect
    data and conduct annual hardware-in-the-loop exercises with Israel to
    enhance interoperability.

                Block 2006
        Block 2006 work continues to improve existing capabilities and
    provide new sensors and interceptors for integration with fielded
    elements. Our focus will be on evolving and integrating the capability
    to achieve a more synergistic and layered BMD system. We will continue
    rigorous system and element flight-test demonstration and validation
    efforts and use wargames to help develop concepts of operation and
    operational procedures.
        We are requesting $2.2 billion in fiscal year 2004 to support RDT&E
    for Block 2006. Our estimated expenditure for Block 2006 activities
    across the FYDP is $11.3 billion (see Table 2).

                                                        TABLE 2.--BLOCK 2006 FUNDING FISCAL YEAR 2002-09
                                                                       ($M then-year) \1\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Fiscal year--                                    FYDP     Totals
                                                         --------------------------------------------------------------------------------  fiscal    fiscal
                           Project                                                                                                          year      year
                                                            2002      2003      2004      2005      2006      2007      2008      2009     2004-09   2002-09
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    C\2\BMC Block 2006..................................         4        27        53       104       116  ........  ........  ........       273       304
    Hercules Block 2006.................................  ........  ........        19        18        45        45  ........  ........       127       127
    Joint Warfighter Support Block 2006.................  ........  ........  ........        12        24        12  ........  ........        48        48
    Test & Evaluation Block 2006........................         1         1         2         9        41        39  ........  ........        92        93
    Targets & CM Block 2006.............................         1         4        32       110       213       172  ........  ........       526       530
    THAAD Block 2006....................................  ........  ........       109       208       598       498       113  ........     1,525     1,525
    GMD Block 2006......................................     2,460     2,109     1,605     1,774     1,354     1,235  ........  ........     5,969    10,538
    Aegis BMD Block 2006................................  ........  ........        24        73       377       299  ........  ........       773       773
    ABL Block 2006......................................  ........  ........        10        86       150        79        81        55       461       461
    BMDS Radars Block 2006..............................  ........  ........       101       145       134  ........  ........  ........       380       380
    STSS Block 2006.....................................        55       232       276       285       285       204        75        35     1,160     1,447
                                                         ---------------------------------------------------------------------------------------------------
          TOTAL.........................................     2,520     2,372     2,232     2,823     3,335     2,583       270        90    11,333    16,225
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Numbers may not add exactly due to rounding.

        Boost Elements.--We will enhance and test the integration of the
    ABL aircraft into the BMD system. Candidate enhancements include
    improvements in BMC\4\I, interoperability, pointing and tracking, and
    target engagement. We will continue evaluation of the ABL test aircraft
    capability against a range of threats. This aircraft will be available
    to provide an emergency operational capability except for a maximum of
    six months during fiscal year 2007 when it may undergo modifications
    and enhancements.
        Midcourse Elements.--We plan to enhance defensive capability and
    further develop the Test Bed by maturing hardware and software of all
    GMD interceptor, sensor, and C\2\BM components. We will continue our
    ground- and flight-testing to demonstrate improved weapon and
    discrimination performance and critical interfaces with external
    sensors. We also plan to complete the upgrade of the Thule EWR should
    we get approval from Denmark.
        Aegis BMD flight missions will incorporate remote engagements of
    targets as well as demonstrations against intermediate-range ballistic
    missile (IRBM) targets. We will continue development of Aegis BMD
    sensor discrimination capability. Prototype BMD signal processors will
    be tested aboard Aegis ships with SPY-1 radar modifications. SM-3
    missile deliveries will begin in 2004. Our plans are to build an
    inventory of up to thirty-five SM-3 interceptors by the end of 2006.
    Also, if directed, we would prepare to field up to twenty additional
    SM-3 interceptors in 2007. We will proceed with our cooperative BMD
    research with Japan to enhance the SM-3. We have two joint flight tests
    of the advanced nosecone planned in the fiscal year 2005-2006
    timeframe, and we will continue to look at possibilities for co-
    development.
        Terminal Elements.--The THAAD interceptor begins in the third
    quarter fiscal year 2006 a series of five flight tests that are
    scheduled to conclude in first quarter fiscal year 2008. We will
    improve THAAD's exo-atmospheric and endo-atmospheric endgame
    discrimination capability against increasingly complex targets.
        Sensors.--Current plans call for a new forward-based radar in late
    2006 for positioning close to the threat at sea or on land. Enhanced
    forward-based sensor capabilities and improved sensor netting will
    enable the BMD system to handle threats posing a more difficult
    discrimination challenge and provide a launch-on-remote capability. A
    midcourse radar will be added as part of our layered approach.
    Additional radar configurations will be procured as necessary to
    satisfy Block 2006 objectives.
        Current plans are to launch two low-earth orbit satellites in
    fiscal year 2007 to validate space-based sensor concepts for target
    acquisition, tracking, and discrimination and to provide a space node
    for the Test Bed. STSS will improve in subsequent blocks to provide
    data fusion, radar/sensor cueing over-the-horizon, and interceptor
    handover and fire control. Production alternatives will be evaluated at
    least annually based upon element performance and integrated BMD system
    performance.

                Block 2008
        Block 2008 represents a major step in BMD system evolution. We plan
    to complete multiple layers of weapons and sensors, based on fixed and
    mobile platforms, to counter a range of ballistic missiles. This block
    will include C\2\BM components that enable integrated control of all
    system assets throughout the battlespace. Primary development projects
    include adding boost phase weapons to the Test Bed, integrating space
    sensor platforms, and fusing multi-sensor discrimination products. We
    will integrate capability-based targets and payload suites (to include
    new and more complex countermeasures) into our system testing to
    demonstrate effectiveness against evolving threats.
        We are requesting $572 million in fiscal year 2004 to support RDT&E
    for Block 2008. Our estimated expenditure for Block 2008 activities
    across the FYDP is $16.3 billion (see Table 3).

                                                        TABLE 3.--BLOCK 2008 FUNDING FISCAL YEAR 2002-09
                                                                       ($M then-year) \1\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Fiscal year--                                    FYDP     Totals
                                                         --------------------------------------------------------------------------------  fiscal    fiscal
                           Project                                                                                                          year      year
                                                            2002      2003      2004      2005      2006      2007      2008      2009     2004-09   2002-09
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    C\2\BMC Block 2008..................................  ........  ........         1        12        27       144       145       147       476       476
    Hercules Block 2008.................................  ........  ........        19        17        17        17        62        60       192       192
    Joint Warfighter Support Block 2008.................  ........  ........  ........  ........  ........        12        29        31        71        71
    Test & Evaluation Block 2008........................  ........  ........         1         1         4        13        85        87       190       190
    Targets & CM Block 2008.............................  ........  ........  ........        57        77        68       239       253       694       694
    THAAD Block 2008....................................  ........  ........  ........  ........       237       227       369       300     1,134     1,134
    GMD Block 2008......................................  ........  ........  ........  ........  ........  ........       878       877     1,756     1,756
    AEGIS BMD Block 2008................................  ........  ........  ........       116       186       322       470       386     1,481     1,481
    ABL Block 2008......................................        11       237       256       402       582       561       366       267     2,435     2,683
    BMDS Radars Block 2008..............................  ........  ........  ........  ........  ........       136       102        22       261       261
    STSS Blk 2008.......................................  ........  ........  ........  ........  ........        82       177        89       348       348
    BMDS Interceptor Block 2008.........................        54       100       296       529     1,013     1,562     1,939     1,890     7,229     7,383
                                                         ---------------------------------------------------------------------------------------------------
          TOTAL.........................................        65       337       572     1,134     2,145     3,146     4,862     4,409    16,268    16,669
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Numbers may not add exactly due to rounding.

        Boost Elements.--ABL will integrate new technologies to improve
    performance and lethality and enhance operational suitability. We will
    continue development of promising technologies for insertion into Block
    2008 and beyond and design and develop a system-level ground-test
    facility for ABL. We plan to test a second ABL aircraft in the Test Bed
    during Block 2008.
        Plans also are to develop and integrate a mobile ground-based boost
    phase hit-to-kill capability into the Test Bed for flight-test
    demonstration. We will initiate a space-based test bed development to
    determine the feasibility of intercepting missiles from space. Initial
    on-orbit testing would commence with three to five satellites in Block
    2008.
        Midcourse Elements.--We will conduct up to three GMD flight-tests
    annually to demonstrate advanced engineering and pre-planned equipment
    improvements for the boosters, interceptors, early warning and fire
    control radars, and C\2\BM and communications software builds. We plan
    to enhance the Aegis Weapons System AN/SPY-1 radar to improve
    discrimination for engaging both unitary and separating targets. We
    will assess GMD integration with the BMDS Interceptor and also test the
    interceptor on board an Aegis warship.
        Terminal Elements.--We will complete the development and testing of
    the THAAD weapon system. We are planning up to eight developmental and
    operational-type flight tests to stress interceptor, radar, and C\2\BM
    performance in realistic scenarios that include advanced
    countermeasures.
        Sensors.--Our work will build on the initial BMDS Radar
    configuration and conduct sensor research to improve capabilities and
    develop advanced algorithms. We will improve Family of Radar coverage,
    performance, and flexibility and address vulnerability within the
    context of the overall BMD system global sensor network. STSS
    operations will continue to be integrated with other BMD elements in
    the Test Bed and support enhanced C\2\BM development initiatives. STSS
    will demonstrate the ability to acquire, track, and discriminate
    midcourse objects with space-based infrared sensors.

                Block 2010
        Work in this block will continue spiral development projects for
    weapon and sensor improvements and platform integration. C\2\BM and
    communications improvements will enable highly resolved sensor data to
    be exchanged with all BMD system elements.
        We are requesting $24 million in fiscal year 2004 to support RDT&E
    for Block 2010. Our estimated expenditure for Block 2010 activities
    across the FYDP is $4.7 billion (see Table 4).

                                                        TABLE 4.--BLOCK 2010 FUNDING FISCAL YEAR 2002-09
                                                                       ($M then-year) \1\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Fiscal year--                                    FYDP     Totals
                                                         --------------------------------------------------------------------------------  fiscal    fiscal
                           Project                                                                                                          year      year
                                                            2002      2003      2004      2005      2006      2007      2008      2009     2004-09   2002-09
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    AEGIS BMD Block 2010................................  ........  ........  ........  ........  ........         8       104       145       257       257
    STSS Block 2010/2012................................       179        55        24        44       232       565       750     1,065     2,680     2,914
    BMDS Interceptor Block 2010.........................  ........  ........  ........  ........        97       146       585       974     1,803     1,803
                                                         ---------------------------------------------------------------------------------------------------
          TOTAL.........................................       179        55        24        44       329       719     1,439     2,184     4,740     4,974
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Numbers may not add exactly due to rounding.

        Boost Elements.--Block 2010 activities will improve exo-atmospheric
    BMDS Interceptor performance and enable greater basing mode
    flexibility, to include possible adaptation to sea-based platforms. We
    will develop and test an advanced space-based test bed to augment or
    replace the Block 2008 space-based test bed.
        Midcourse Elements.--We will continue flight-testing improved
    weapon and sensor components and work toward the integration of an
    advanced BMDS Interceptor. Aegis BMD will incorporate prior block
    developments into the Navy-developed next-generation, open architecture
    Combat System.
        Terminal Elements.--THAAD will integrate proven technologies to
    enhance its capability against longer range and faster ballistic
    missiles without sacrificing existing mobility and performance.
    Fielding and survivability upgrades also are planned to demonstrate a
    capability against both IRBM and ICBM threats.
        Sensors.--New technologies will be inserted into subsequent STSS
    blocks to provide precise threat tracking and improved discrimination.
    We will develop and launch a satellite with improved sensors integrated
    into the first common satellite bus, and develop and integrate advanced
    ground station equipment and software. The Block 2010 STSS will deliver
    a space-based capability to acquire, track and discriminate ballistic
    missiles based on larger aperture track sensors, increased vehicle
    lifetime, and increased, near-real-time on-board data processing. The
    funding also includes launch services for Block 2010 satellites. C\2\BM
    funding focuses on integrating STSS data into the sensor net.
    Mission Area Investments
        Our Mission Area Investments are investments common to the entire
    BMD system that enable us to implement over time our block fielding
    approach. Mission Area Investments maintain core development and
    testing infrastructure and facilitate the integration of future block
    capabilities. The President's Budget requests $1.69 billion in fiscal
    year 2004 for these investments. This program activity accounts for
    about $11.3 billion, or just over 20 percent of the total funding
    estimate across the FYDP. Table 5 provides a detailed breakdown of
    funding for each investment activity.

                                                 TABLE 5.--MISSION AREA INVESTMENTS FUNDING FISCAL YEAR 2002-09
                                                                       ($M then-year) \1\
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Fiscal year--                                    FYDP     Totals
                                                         --------------------------------------------------------------------------------  fiscal    fiscal
                           Project                                                                                                          year      year
                                                            2002      2003      2004      2005      2006      2007      2008      2009     2004-09   2002-09
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    System Engineering..................................       236       397       436       474       501       510       580       578     3,079     3,713
    C\2\, BM & Communications...........................        16        16       119       125       178       201       204       218     1,045     1,076
    Test & Targets......................................       359       332       338       332       328       352       316       333     1,998     2,688
    International Programs..............................       211       205       148       215       129       100        89        89       769     1,185
    Advanced Concepts...................................       347       176       388       418       363       437       524       534     2,664     3,187
    Program Operations..................................       232       170       264       252       283       306       317       333     1,754     2,156
                                                         ---------------------------------------------------------------------------------------------------
          TOTAL.........................................     1,400     1,296     1,692     1,817     1,783     1,904     2,029     2,083    11,309    14,005
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Numbers may not add exactly due to rounding.

        The significant Mission Area Investments are as follows:
                System Engineering
        The System Engineering activity defines, manages, and integrates
    the layered BMD system. Capability-based acquisition requires continual
    assessment of technical and operational alternatives at the component,
    element, and system levels. Our system engineering process assesses and
    determines system design and element contributions and the impact of
    introducing new technologies and operational concepts to ensure
    properly synthesized system blocks. These activities provide the
    technical expertise, tools, and facilities to develop the BMD system
    and maintain an intelligence and research capability to ensure that the
    system evolves in a way that is responsive to known and anticipated
    threats.
        We are increasing our focus on risks related to producibility,
    manufacturing, quality, cost, and schedule of the BMD system elements.
    We dedicate resources to examine the applicability of technology to
    system needs and transition readiness. Industrial and manufacturing
    investment strategies for achieving system affordability and
    facilitating insertion of successive new capabilities are increasingly
    vital to the program.

                Command and Control, Battle Management & Communications
                        (C\2\BMC)
        Our activities related to C\2\BMC create interoperability among a
    wide variety of legacy systems and emerging elements over joint and
    coalition networks. The C\2\BMC activity will continue development and
    integration of the C\2\BM and communications functions for the BMD
    system. By fielding software development spirals that improve system
    synergism, integration capability, and interoperability with external
    systems, this activity expands the inherent C\2\BM capabilities of
    fielded terminal, midcourse, and boost defenses. Communications funding
    will develop and improve BMD system-wide communication links and sensor
    netting functions to enable enhanced early warning and quicker
    interceptor response times. The Joint National Integration Center
    (JNIC) provides a common environment for the BMD elements to conduct
    experiments, demonstrations, and exercises and is a key-operating
    C\2\BM component of the Test Bed.

                BMD Tests & Targets
        The missile defense program includes significant test and
    evaluation infrastructure, test execution capabilities, and analytical
    tools for program-wide use. The Agency conducts risk reduction,
    developmental, and operational element and component testing as well as
    tests to collect critical measurements, such as plume signatures. We
    also have a rigorous measurements test program to collect data in
    support of design, development, and engineering activities.
    Measurements from dedicated test events and targets of opportunity
    enable us to design components, characterize potential countermeasures,
    test algorithms, undertake lethality and kill assessment, and validate
    our critical models and simulations.
        Investments providing ballistic missile targets, countermeasures,
    and other payloads support our test objectives. Presentation of the
    targets and payloads for flight test events involves designing,
    prototyping, developing, procuring, certifying, and qualifying for
    testing. In fiscal year 2003 we will establish a single prime
    contractor to further enhance system level management of targets and
    countermeasures activities.
        In fiscal year 2004 we will continue to resource critical test
    facilities, launch capabilities, instrumentation, telemetry,
    communications, and safety systems underpinning our testing regime.
    With the enhanced realism of the Test Bed, the increasing complexity of
    our tests, and the escalating tempo of test activity, our investments
    in this area will emphasize flexibility, standardization, and mobility.

                International Programs
        The President has underscored the importance of working with other
    countries to develop missile defenses and provide protection against
    ballistic missile threats. We are building defensive layers that could
    potentially involve a variety of locations around the globe and
    probably involve many other countries. Last summer interagency teams
    briefed key allies on the international participation framework. Today
    we are well along in our discussions with several governments regarding
    their possible participation in the missile defense program and
    improvements in our industrial relationships.

                Advanced Concepts
        We have several Science and Technology (S&T) initiatives to
    increase BMD system firepower and sensor capability and extend the
    engagement battle space of terminal elements. In fiscal year 2004, we
    will continue to focus on the Miniature Kill Vehicle (MKV) project,
    which could lead to a flight-test in fiscal year 2005. Fiscal year 2004
    funding will support investigating Early Detection and Tracking (ELDT)
    technology, Laser/LADAR technologies for improved tracking, weapon
    guidance, and imaging, and technologies for a space-based, high-power
    laser. While our S&T activities are not on a critical path for
    insertion into the BMD system, each one of them is being considered for
    their block enhancement value.

                Program Operations
        Our Program Operations expenses are primarily for government
    personnel performing management support activities, contractors that
    assist in performing these activities, and O&M-like costs associated
    with operations and maintenance at numerous facilities around the
    country, supplies and equipment, communications and printing, travel
    and training, and information technology management.
    Management and Oversight
        The missile defense program uses an acquisition approach tailored
    to the unprecedented nature of the technology involved in missile
    defense. We will continue to work very hard to ensure that the program
    has adequate management and congressional oversight. There is an
    improved process in place within the Department that preserves
    management, technical, and financial oversight by cognizant authorities
    on the Senior Executive Council and the Missile Defense Support Group.
    Senior warfighters, including the Joint Requirements Oversight Council,
    have reviewed missile defense objectives and will continue to do so
    several times a year. Internally we have in place configuration
    management procedures, and we produce on a regular basis the necessary
    threat, system, and configuration control documentation to ensure that
    our activities continue to support our development and fielding
    objectives. As directed in the 2002 and 2003 Defense Authorization
    Acts, we have identified cost, schedule, testing, and performance goals
    and developmental baselines in the President's fiscal year 2004 Budget
    justification materials and shown clear linkages between the Agency's
    budget and key performance measures.

    Closing
        Mr. Chairman, we are on track with our missile defense program. We
    know that the technology fundamental to the current generation of
    missile defenses works. We have demonstrated many times over the past
    two years that we can collide with a warhead and destroy it. We have
    the confidence to proceed with plans for an initial defense capability.
    A few years ago, I could not have said this to the American people.
    Today I can. We will build confidence in the system over time as we
    invest in the program.
        We also recognize that we have much more work to do to improve the
    BMD system. The architecture we have in 2004 and 2005 will probably be
    very different a decade later, depending on how our RDT&E efforts
    proceed. Our objective continues to be one of improving missile defense
    capability over time. We have made considerable progress in missile
    defense over the past three years. With the President's direction, and
    with your approval of our budget request, we will take another
    important step on that long road before us.
        Thank you, Mr. Chairman.

                               OPENING STATEMENTS

        Senator Stevens. Thank you very much, General.
        I apologize to my colleagues. I had some things in the way,
    and I didn't call on the Senators. Senator Cochran, did you
    have an opening statement?
        Senator Cochran. Mr. Chairman, thank you very much. I will
    be glad to proceed to hear from Mr. Christie. I think they have
    done a great job with this program, but I appreciate the
    recognition.
        Senator Stevens. Senator Shelby.
        Senator Shelby. Same with me. I'd rather hear from the
    witnesses.

                              OPERATIONAL TESTING

        Senator Stevens. Mr. Christie.
        Mr. Christie. Thank you, Mr. Chairman, and distinguished
    members of the committee. I also appreciate this opportunity to
    appear before you today to discuss operational test issues
    involved with building a missile defense testbed that may also
    have some inherent defensive capability.
        Let me emphasize up front my strong support for building
    this testbed as a means of conducting more realistic ballistic
    missile defense testing. It will provide us with an excellent
    capability to test the integrated missile defense system
    against more challenging targets and under more realistic
    engagement conditions. Designed to accomplish this testing
    mission, this testbed will have some limited capabilities to
    defend against an actual threat, depending of course on certain
    assumptions about intelligence of an imminent attack and the
    positioning of sensors to acquire, track, and target the
    threat.
        Regardless of what we call this initial collection of
    equipment, communications, and personnel, the fact remains that
    we must build this test capability and put it in the field
    before we can test the system. Additionally, it is prudent to
    develop operational concepts and to train personnel in concert
    with the testbed's development so that whatever inherent
    capability exists in the testing infrastructure, it could be
    employed to defend the United States in the event of a
    ballistic missile attack.
        I understand and share the concerns raised by several
    members of Congress with the precedent of fielding operational
    systems without adequate operational testing. The Missile
    Defense Agency (MDA) under General Kadish is proceeding with a
    design and development strategy that is very proactive when it
    comes to testing. My staff and I are involved on a daily basis
    with the MDA and the program managers for the various ballistic
    missile defense system developments. We are reviewing test
    plans, participating in planning meetings, witnessing tests,
    providing coordinated advice, and responding in written reports
    to Congress on the adequacy of these testing programs. I have
    access to all the information I need to fulfill these
    responsibilities.
        I have completed my assessment of the PAC-3 initial
    operational test and evaluation and documented the results in a
    classified beyond low rate initial production report that was
    provided to the Congress last November. I have also completed
    my annual assessment of the overall MDA testing programs and
    submitted that report to the appropriate committee of this
    Congress.
        In that report I do conclude that the ground-based
    midcourse defense (GMD) element of the Ballistic Missile
    Defense System (BMDS) has yet to demonstrate operational
    capability. This conclusion is based on the fact that many
    essential components of the GMD element have yet to be built.
    We cannot test the GMD element without these critical
    components and we cannot test it realistically without the
    testbed.
        This was illustrated recently when the exoatmospheric kill
    vehicle failed to separate from the booster in Integrated
    Flight Test 10. MDA subsequently restructured the flight test
    program, eliminating further testing with the old booster
    system. This decision considered the poor performance of the
    surrogate booster system, and the risks of diverting booster
    developers from the objective booster design effort, compared
    with the advantages of gathering additional data from those
    flight tests.
        Beginning later this year and prior to the 2004 decision,
    testing will resume with two flight tests for each of the
    candidate boosters and a risk reduction flight for a target
    launched from Kodiak in Alaska. Intercept testing will continue
    in IFTs-14 and 15, using a new booster motor. This is followed
    by integrated ground testing of the testbed and culminates in a
    system test readiness review.
        Current plans call for three more intercept flights for the
    Aegis Ballistic Missile Defense system prior to the end of
    fiscal year 2004; the first two intercepts against a non-
    separating target and the last flight conducted against a
    separating target. Additional flight testing beyond this point
    is still in the planning stage. The purpose of the testbed is
    to establish and define a baseline capability to realistically
    integrate and test components of the BMDS, and to enhance
    capability incrementally through block development.
        The real challenge is to develop an operational concept for
    using this testbed that integrates components of the BMDS as
    they become available in order to evaluate the operational
    capability of the system and to defend against a ballistic
    missile attack, if needed. If we don't develop an operational
    concept and an attack does come, then we will have failed in a
    most serious way. On the other hand, if an effort to refine an
    operational concept for an interim system significantly
    distracts from building the objective system in an expeditious
    fashion, then we risk similar failure against more
    sophisticated threats down the road.
        While the testbed is a research and development system,
    this does not preclude us from addressing operational test and
    evaluation. In fact, it is common for systems in development to
    combine developmental and operational test objectives. The
    testbed, including missiles, will provide us an early
    opportunity to acquire valuable ground test data on intra- and
    interoperability between the command and control center and the
    silo/missile complex; on the system and missile health and
    status built in testing capability; and on system safety,
    reliability, maintainability, and logistics supportability.
    Availability of this data will permit lessons learned from the
    testbed to be considered in improving the objective GMD.
        Every major GMD ground and flight test, both prior to and
    after the 2004 testbed is available, formally addresses both
    developmental testing and operational testing objectives,
    consistent with the maturity level of the system. The Service
    Operational Test Agencies personnel are dedicated to planning
    the details of the operational test portions of these ground
    and flight tests, and analyzing and reporting relevant
    operational test data. My staff is working with these agencies
    to define independent operational plans for the operational
    test activities. I will review and approve these operation test
    and evaluation plans and their associated data requirement. I
    will use both developmental and operational test data as the
    basis for my operational assessment in advising General Kadish
    and the Defense Acquisition Executive. This assessment will
    also be the basis for my annual report to the Congress.
        Mr. Chairman, ladies and gentlemen, my staff has worked
    diligently with the MDA staff to build what I feel is a very
    effective relationship. I will continue to work closely with
    General Kadish to ensure that the mission of the testbed, as a
    testbed, is kept in perspective. I will continue to monitor
    planning and testing activities to ensure that we test as
    realistically and as thoroughly as we can, advise the Director,
    MDA of operational testing concerns, and report my assessments
    of progress to the Secretary and to you.
        This concludes my opening remarks and I welcome your
    questions.
        [The statement follows:]

                    Prepared Statement of Thomas P. Christie

        Mr. Chairman, Senator Inouye and distinguished members of the
    committee, I appreciate this opportunity to appear before you today and
    discuss operational test issues involved with building a missile
    defense testbed that may also have some limited inherent defensive
    capability. Let me emphasize up front that I strongly support building
    this testbed as a means of conducting more realistic ballistic missile
    defense testing. It will provide us with an excellent capability to
    test the integrated Ballistic Missile Defense System (BMDS) against
    more challenging targets under more realistic engagement conditions.
    Designed to accomplish this testing mission, this testbed will have
    some limited capability to defend against an actual threat, depending,
    of course, on certain assumptions about intelligence of an imminent
    attack and the positioning of sensors to acquire, track, and target the
    threat.
        Regardless of what we call this initial collection of equipment,
    communications, and personnel, the fact remains that we must build this
    test capability and put it in the field before we can test the system.
    Additionally, it is prudent to develop operational concepts and train
    personnel in concert with the testbed's development, so that whatever
    inherent capability exists in the testing infrastructure could be
    employed to defend the United States in the event of a ballistic
    missile attack.
        I understand and share the concerns raised by members of Congress
    with the precedent of fielding operational systems without adequate
    operational testing. Let me take a moment here to discuss my assessment
    of this situation.
        The Missile Defense Agency under General Kadish is proceeding with
    a design and development strategy that is very proactive when it comes
    to testing. My staff and I are involved on a daily basis with the
    Missile Defense Agency and the program managers for the Ballistic
    Missile Defense System elements. We are reviewing test plans,
    participating in planning meetings, witnessing tests, providing
    coordinated advice, and responding in written reports to Congress on
    the adequacy of the testing programs. I have access to all the
    information I need to fulfill these responsibilities.
        I have completed my assessment of the PAC-3 Initial Operational
    Test and Evaluation test results, which is documented in a classified
    Beyond Low Rate Initial Production report, provided last November to
    the Congress. I have also completed my annual assessment of the MDA
    testing programs and submitted the report to the appropriate committees
    of the Congress. In that report, I conclude that the Ground-based
    Midcourse Defense element of the BMDS in essence has not yet
    demonstrated operational capability. This conclusion is based on the
    fact that many essential components of the GMD element have not yet
    been built. We cannot test the system without these critical
    components, and we cannot test it realistically without the testbed.
        This was illustrated recently, when the exoatmospheric kill vehicle
    (EKV) failed to separate from the booster in Integrated Flight Test-10
    or IFT-10. MDA subsequently restructured the flight test program,
    eliminating further testing with the old booster system. This decision
    considered the poor performance of the surrogate booster system and the
    risks of diverting booster developers from the objective booster design
    effort, compared with the advantages of gathering additional data from
    those flight tests.
        Beginning later this fiscal year and prior to the 2004 decision,
    testing will resume with two test flights for each of the candidate
    boosters and a risk reduction flight for a target launched from the
    Kodiak target launch site in Alaska. Intercept testing will continue in
    IFTs-14 and 15, using the new booster. This is followed by integration
    ground testing of the testbed and culminates in a system test readiness
    review.
        Current plans also call for three more intercept flights for the
    Aegis Ballistic Missile Defense system prior to the end of fiscal year
    2004, with the last flight conducted against a separating threat
    target. Additional flight testing beyond this point is still in the
    planning stage. The purpose of the testbed is to establish and define a
    baseline capability, to realistically integrate and test the components
    of the BMDS, and to enhance capability incrementally, through block
    development.
        The real challenge is to develop an operational concept for using
    the testbed that integrates components of the BMDS as they become
    available, in order to evaluate the operational capability of the
    system and defend against a ballistic missile attack if so needed. If
    we don't develop an operational concept and an attack does come, then
    we will have failed in a most serious way. On the other hand, if an
    effort to refine an operational concept for an interim system
    significantly distracts us from building the objective system in an
    expeditious fashion, then we risk similar failure against more
    sophisticated threats down the road.
        While the testbed is a research and development system, this does
    not preclude us from addressing operational test and evaluation issues.
    In fact, it is common for systems in development to combine
    developmental and operational test objectives. The testbed, including
    missiles, will provide an early opportunity to acquire valuable ground
    test data on intra- and interoperability between the command and
    control center and the silo/missile complex; on the system and missile
    health and status or built in testing capability; and on system safety,
    reliability, maintainability, and logistics supportability.
    Availability of this data will permit lessons learned from the testbed
    to be considered in improving the objective Ground-based Midcourse
    Defense system.
        Every major GMD ground and flight test, both prior to and after the
    2004 testbed is available, formally addresses both developmental
    testing and Operational Testing objectives, consistent with the
    maturity level of the system. The Service Operational Test Agencies
    personnel are dedicated to planning the details of the operational test
    portions of the ground and flight tests, and analyzing and reporting
    relevant operational test data. My staff is working with the
    Operational Test Agencies to define independent evaluation plans for
    the operational test activities. I will review and approve these
    Operational Test and Evaluation plans and their associated data
    requirements. I will use both developmental and operational test data
    as the basis for my operational assessment, in advising General Kadish
    and the Defense Acquisition Executive. This assessment will be the
    basis for my annual report to the Congress.
        Mr. Chairman, Ladies and Gentlemen, my staff has worked diligently
    with the MDA staff to build what I feel is a very effective
    relationship. I will continue to work closely with General Kadish to
    ensure that the mission of the testbed, as a testbed, is kept in
    perspective. I am working with the Service Operational Test Agencies to
    identify data requirements for an operational evaluation plan that I
    will review and approve. I will continue to monitor planning and
    testing activities to ensure that we test as realistically and
    thoroughly as we can, advise the Director, MDA of operational testing
    concerns, and report my assessments of progress to the Secretary and to
    you.
        This concludes my opening remarks and I welcome your questions.

        Senator Stevens. Thank you very much, Mr. Christie. Senator
    Cochran.
        Senator Cochran. Mr. Chairman, thank you very much.
        I first want to congratulate both of you, General Kadish
    and Mr. Christie, for a very workman-like and outstanding
    performance in the duties that you have. This is a very
    challenging task that we have given to you, but I think you
    have demonstrated an ability to use the resources that you have
    been given by the Congress and to develop tests and field some
    very impressive missile defense systems. I think the
    comprehensive approach is the right approach, for long-range
    ballistic missile defense to shorter-range tactical challenges
    that we face, and most recently in Iraq.
        I would like, building on the experience we have had in
    Iraq, to ask you what your assessment is of the missile systems
    that we utilize to protect our troops and population centers in
    the recent conflict. Could you tell us specific observations
    that you have about the efficacy of the PAC group for example,
    and other systems that we may have used?
        General Kadish. Let me start first, Senator Cochran, and
    give you some insight from where we sit on the Patriot as a
    system and Patriot-3 in particular, and Mr. Christie can add to
    it.

                           PATRIOT SYSTEM PERFORMANCE

        As you would expect, a lot of the data that I would like to
    talk about is classified, so I will keep it in the unclassified
    range. But I guess when you look at the performance right now
    of Patriot as a system, which includes earlier versions of
    Patriot as well as Patriot-3, I would characterize the overall
    performance as very encouraging. And the reason I say it that
    way is that I think it is probably more proper for us to
    discuss this when the war is over and we have the chance to
    look in detail at all the engagements of Patriot and Patriot-3
    that occurred during the war.
        Now having said that, I would like to talk about some of
    the things that we really know about the engagements and some
    of the things that we think we know about the engagements.
        What we know about the engagements is that from a ballistic
    missile standpoint, we have engaged I think nine ballistic
    missiles of short range character. In addition, what we know is
    we have engaged those nine targets with a combination of
    Patriot-2s and 3s. And the final thing we know is that they
    didn't hit their targets for one reason or another. There were
    some shots that we let go because they did not threaten any
    particular defended area, but overall, the performance is very
    encouraging from that standpoint that we seem to have engaged
    the targets successfully.
        Now what we think we know enters into a lot of speculation
    because of the data gathering from the war and those kinds of
    things we have ongoing, and it is probably better to wait until
    the end of the war and we will have some more information
    coming in to make definitive statements about it.
        But from every indication I have seen and from the data
    available, we have a pretty good combination and capability
    against these missiles, and effectively it provides a national
    missile defense capability, if you will, for Kuwait and so
    forth.
        In addition to that, I think you know that the Israeli
    system, the Arrow is working in combination with their own
    Patriot-2s and are in country on that side. So overall, the
    performance of Patriot, and particularly Patriot-3, which has
    had two specific engagements against BDMs, has been very very
    good and as expected, but there is a lot of data we have to
    gather to make sure that we can stand behind those statements
    based on the battlefield type of information we're getting.
        But it is a major first step and kind of a microcosm of
    what we are trying to do in missile defense, because I can
    conclude now that if this data proves out to be as I expect,
    that hit-to-kill works in combat conditions, at least against
    short range missiles.
        Senator Cochran. Mr. Christie, do you have any comments?
        Mr. Christie. I would add a couple thoughts to that. You
    have received my classified report of last fall which pointed
    out some problems that we experienced in the initial
    operational testing. I am heartened that it appears some of the
    more serious problems encountered in the operational testing
    had been addressed and fixed by the Army before the deployment.
    While we cannot get into the classified aspects of Patriot
    Performance, it appears to have worked quite well.
        My other comment is that I am concerned about the
    fratricide incidents, and of course they are under
    investigation. We don't know at this point in time whether we
    can blame them on Patriot or blame them on problems with the
    aircraft that were engaged.
        I support General Kadish's statements otherwise.

                    U.S. NAVY INTEGRATION IN MISSILE DEFENSE

        Senator Cochran. The other day we had before the committee
    the Chief of Naval Operations (CNO), Vern Clark, and he made
    some comments about the Navy's capabilities that they were
    testing and developing, that he said offered promise for I
    think a midrange defense surveillance system based on cruisers.
    Tell me what your assessment is now of our capabilities and the
    promise that we may be able to utilize the Navy in that way.
    Are you encouraged by the progress of testing programs or do
    you have plans for more aggressive testing in this area to
    prove these systems?
        General Kadish. Yes, Senator. The Aegis system itself is
    part of the testbed that we're talking about here, and the
    early fielding of equipment. We are very encouraged by the SM-3
    successes, which is a component of that system now. We were
    three for three and planning more tests this year and next
    before we actually start building more of these early missiles.
        In addition to that, I will just point out again that in
    the Gulf area, the U.S.S. Higgins has been providing early
    warning cues to the Patriot system for these engagements, which
    is again, the type of integration that we want to see between
    the systems and among the systems to make them work better.
        So, I am very encouraged with the Aegis BMD program and the
    Navy is working very well with us to handle the operations
    impact of having surveillance capability as well as potentially
    a defense against medium range missiles in the 2004 time frame,
    very big steps forward in that regard.
        Senator Cochran. I'm only going to ask one more question
    and then yield to others.

                            MISSILE DEFENSE TESTBED

        The fact that you have made a decision to use the testbed
    in Alaska as a deployed system in fact that would provide our
    Nation some defense or a defense capability against ballistic
    missiles is encouraging to me, and I applaud you for it, and I
    want you to know you have supporters in that decision. And I
    wonder, when do you think you will be able to have the first
    test of that testbed, what is the timetable?
        General Kadish. I think we're still nailing down some of
    the details, but I think it will be in the first quarter of
    calendar year 2005 is when we're planning the first integrated
    test of the testbed with an intercept test. Prior to that time
    we will be doing an awful lot of ground testing, integration
    testing on all the equipment across the board. So if I'm not
    mistaken, I think that's the target time frame.
        Mr. Christie. In particular, we will be using different
    geometries, firing the target from Kodiak with an intercept or
    launching from Vandenberg. That would be the first time we have
    gotten away from the relatively unrealistic geometries used in
    testing to date with the interceptors out of Kwajalein and the
    targets from Vandenberg.
        General Kadish. The plan currently includes, and we're
    still debating this internally, two to three tests a year out
    of the testbed configuration involving intercepts, and many
    more ground tests involved. And we are even starting the
    planning to do multiple systems integration, where we will try
    to do a test against a long-range missile and at the same time
    will try to intercept a medium-range missile with Aegis and
    other types of systems. So that planning is ongoing and we
    haven't nailed all those things down because this is new and
    quite complicated, but that's the direction we're going.
        Senator Cochran. Thank you, Mr. Chairman.
        Senator Stevens. Senator Shelby.

                          MINIATURE KILL VEHICLE (MKV)

        Senator Shelby. General, would you tell us what you can
    about where the development of the miniature kill vehicle, the
    MKV program currently is, and what improvements your 2004
    budget request will allow you to make in this program? And just
    say what you can. I understand where we are.
        General Kadish. The miniature kill vehicle advanced
    development is ongoing. We have an acquisition strategy to put
    contractors on contract to actually build these vehicles and
    start testing them. And I am very encouraged by the whole
    process. In fact, we're looking even closer at how we can do
    that better than where we started because of what we found out
    over the past year.
        And the budget request supports that effort in the overall
    process, and we're looking cautiously optimistic about having
    that added to the architecture in the latter part of the
    decade, if we have the success that we expect.

                       STRATEGIC MISSILE DEFENSE COMMAND

        Senator Shelby. What about the role of the SMDC and the
    Technical Center is playing in this? They are right in the
    center of this, are they not?
        General Kadish. That's right. The SMDC and the folks
    surrounding that, particularly in the Huntsville area, have
    been the key to a lot of our successes. In fact when I look
    across the board, we have an awful lot of people counting on us
    across the country, particularly in places like Huntsville and
    others at SMDC, to make it successful. And we only have about
    550 some odd days before we want to actually declare the
    testbed in operational capability, and everyone is working hard
    to make that work.
        Senator Shelby. General, do you feel pretty confident that
    the mission of the MKV is on track to meet your flight
    experience test goal in 2005.
        General Kadish. I do, Senator. It's not going to be easy.
        Senator Shelby. Like Senator Cochran says, it's a real
    challenge but, you have been meeting those challenges.
        General Kadish. We have, and I'm confident in our planning
    and the management approach that we're taking, it all comes
    down to people in the end, and we have some good people.
        Senator Shelby. General, I fully support the President's
    plan to field initial BMD capabilities in 2004. Establishing
    the testbed is a critical step for the ground-based missile
    defense strategy. This initial BMD strategy will set the stage
    as we have been talking about, for a more robust and realistic
    testing of ground integration of the future layered ballistic
    missile defense capability. I expect there's enormous
    complexity to this program, more than complex, I guess, and
    want you to succeed.

                        GROUND BASED MID-COURSE DEFENSE

        But some of us are concerned about the health of the
    ground-based midcourse defense segment. I am concerned that the
    GMD segment has been used to cover other funding requirements
    within the MDA, to the extent that near-term objectives are
    threatened. Is the GMD segment currently facing a budget
    shortfall and if so, how large?
        General Kadish. Well, Senator, we always have more
    requirements than we do funding. So starting from that premise,
    as I look at the GMD budget, we have increased the budget over
    our last year's request in the 2004 column by about $400
    million. We have added some tasks to make the operational
    testbed portion of this, and I would say that overall in every
    program, we rebalanced and reallocated, and it was somewhere
    around $400 million to $800 million that had to be readjusted,
    but there is a net increase to the overall budget in GMD. And
    it's a matter of prioritizing the tasks to be done, and at this
    point in time, I believe our request is adequate for what we
    have set out to do. However, just like any other program, if we
    run into problems and we have issues that we have to use money,
    we're going to have to make some tough decisions in the overall
    process.
        Senator Shelby. Do you believe that you will be able to
    meet your deployment testing and development objectives of GMD?
        General Kadish. I believe we can under the current
    framework, and I will be the first to let you know if we run
    short.
        Senator Shelby. Yes, sir, let this committee know.
        General Kadish. Yes, sir.

                               MDA NATIONAL TEAM

        Senator Shelby. Lastly, we are concerned about the impact
    of the National Team. Is it fair to say that the National Team
    is central to the MDA's ability to accomplish its mission?
        General Kadish. I believe it is, and we have been--there is
    some misunderstanding about what I mean by the National Team.
    What I mean by the National Team is it includes government,
    contractors, industry members across MDA to pull together and
    do the hard engineering among and between the systems. And
    quite frankly, I don't know how to get the technical job done
    without that kind of effort.
        And we have been 14 or 15 months into it. I would like it
    to be a little further downstream in terms of our ability to
    solve some of the problems.
        Senator Shelby. Is that your major concern?
        General Kadish. I think so, it's a major concern, but you
    know, from a realistic standpoint, I think we're doing about as
    good as we possibly could do at this point in the process. And
    by this time next year, I think we will be much better off than
    we are today in that regard.
        Senator Shelby. General, we appreciate the job you're doing
    and the leadership that you have shown. Thank you, Mr.
    Chairman.
        Senator Stevens. Senator Inouye.
        Senator Inouye. Thank you very much. I regret that I was
    late, Mr. Chairman, and I request that my statement be made
    part of the record.
        Senator Stevens. It will be.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Today I am pleased to join our Chairman in welcoming to the
    committee Lieutenant General Ronald T. Kadish, Director of the
    Missile Defense Agency and Mr. Thomas Christie, Director of
    Operational Test and Evaluation.
        Missile defense is, of course, a program of great interest
    to many, and one not without controversy. Indeed, the missile
    defense program is one of the most critical national security
    issues of today and for the foreseeable future.
        There is no question that the ballistic missile threat
    against our nation and our troops in the field will continue to
    grow as technologies to develop and acquire ballistic missiles
    continues to proliferate.
        The question our country faces is how best to meet this
    threat. The administration's plan calls for a ``layered''
    defense to intercept ballistic missiles of all ranges, and in
    all phases of flight to defend the United States, our allies
    and friends, and our deployed forces around the world.
        This is an expensive program. The fiscal year 2004 budget
    request includes over $7.7 billion for the Missile Defense
    Agency. It is also a complex program. Despite successes in
    recent tests--and for that I commend you both--there are still
    many technological hurdles to overcome.
        Let me assure you, General Kadish, this committee views the
    missile defense program as critically important to our national
    security. And we will do our best to support your efforts.
    Nevertheless, given the risks and costs of this program we will
    remain ever vigilant in our oversight.
        Today's hearing provides the committee an important
    opportunity to understand the Department's fiscal year 2004
    budget request and the priorities and challenges of the missile
    defense program.
        Gentlemen, we welcome your testimony.

                              AIRBORNE LASER (ABL)

        Senator Inouye. General, can you give us an update to the
    status of the airborne laser, its cost, its schedule, the so-
    called weight increase, and why the funds were less for 2004
    than this year?
        General Kadish. Senator, the overall situation in the ABL
    is that I guess I would characterize it is we are cautiously
    optimistic about our ability to execute the ABL effort. We have
    about 18 percent of the effort left to go if you measure it in
    terms of the cost versus the tasks that we think we have to do.
    So, about 80 percent done or thereabouts, with the toughest 18
    percent to go.
        From a cost standpoint, I believe we have enough budget to
    handle the program as we currently understand it. We are
    heading towards a shoot-down of a ballistic missile sometime in
    the 18 to 20 month timeframe ahead of us. We're working that
    schedule hard every day because when, if you look at Edwards
    Air Force Base where we have all the hardware coming together,
    it's all out there and we're putting it in the ground, and the
    system that we have there in the carcass of a 747.
        One of the things I'm looking forward to right now this
    year is something we call ``first light''. That is, when we get
    the laser to work in the ground-based configuration that we
    have, and then we're going to put it in the airplane and do it
    in the air, prior to shoot-down. If we accomplish that first
    light this year, my confidence in meeting our scheduled goal of
    18 to 24 months or thereabouts to do the shoot-down will go up
    tremendously.
        So that's what I'm looking for next, and we're having some
    technical issues meeting those schedules, but I think on
    balance we're doing pretty good given the technology.
        There's this issue that kind of surrounds the program about
    the weight of the laser modules in the airplane. Now certainly,
    I would invite the committee members to go out to Edwards to
    see this technical marvel, in my opinion. If you look in the
    back of that 747, you can imagine how big the back of this
    cargo airplane is. We fill up that cargo airplane with a lot of
    plumbing and a lot of exotic material, and things that produce
    this laser and the beam surrounding it.
        The weight issue gets down to how heavy all this equipment
    is for the overall airplane, and the fact that some of it is in
    a certain part of the airplane. And you can overgross a part of
    an airplane in terms of its floor weighting and that type of
    thing, but not affect the overall weight of the airplane and
    how it flies. So it's a complex interaction but the way I would
    say it is, the weight issue is really not a problem with the
    lasers, from my opinion. We know what it is.
        What it affects is how long it flies; instead of 4 hours it
    may be 3\1/2\ hours before refueling. And we know that it meets
    the individual weight requirement for where we put it in the
    airplane. So it's pretty heavy for the spot we put it in, but
    it's still okay for the overall weight. Now what it means for
    the long-term health of ABL is whether or not we can make the
    airplane stay airborne longer from the overall operational
    context, and certainly that will be desirable. But my main goal
    right now, along with the many hundreds of people working that
    program, is to make the laser work and shoot down a missile
    with it, and the weight issue is not preventing us from doing
    that and in fact is not something that we're worried about too
    much for this configuration, it will be for later.
        The budget request for fiscal year 2004, I think is a
    little bit less than what we asked for last year, but that
    reflects the fact that we want to be finished with this
    particular part of the program in the fiscal year 2004 time
    frame.
        Now we're going to have to look at our performance on the
    airplane to see whether or not we're actually going to finish
    on time. As I said, we still have some uncertainty between 18
    to 24 months, or when exactly that shoot-down is going to
    occur. But to sum it all up, I am cautiously optimistic.
        The cost issue, we potentially could overrun somewhere
    between 15 to 20 percent on the program. We have enough budget
    to cover the program effort and we are right on the edge of
    making this very revolutionary technology to prove itself or
    fail, and we just don't know the answer to that question, yet.
        Senator Inouye. So we should not be too concerned about
    your reduction in the request?
        General Kadish. At least not right now, Senator. It's kind
    of like I was telling Senator Shelby about the ground based. It
    will depend on how well we can execute this year's budget for
    ABL, and I think we have enough money now.

                            NAVY INTEGRATING, AEGIS

        Senator Inouye. What is your arrangement with the Navy on
    the Aegis system? There's a cruiser under your command isn't
    there?
        General Kadish. That's right. We needed to have a dedicated
    vessel to do a lot of our testing for Aegis and in talking with
    the Navy senior leadership, particularly the CNO, Admiral
    Clark, we came to an arrangement where the Navy will actually
    give us a cruiser to use for full-time testing. And they are
    also working, having operational ships doing the mission for
    the testbed that we described earlier. So we have been making
    pretty good progress and we have the assets now, and we can do
    the job.
        Senator Inouye. So you would say you are pleased with the
    agreement so far?
        General Kadish. Yes, sir, very pleased.
        Senator Inouye. Thank you very much. Thank you, Mr.
    Chairman.

                                 LASER FUNDING

        Senator Stevens. Thank you, Senator.
        General, I'm a little concerned about the reduction in
    laser money funding too. Is there any real reason for that in
    terms of, was that your decision or was that a decision of
    others?
        General Kadish. Well, Senator, that was done internally at
    MDA and we basically made the allocation decisions I guess over
    the past 6 or 8 months, and that's what you're seeing in the
    final budget release. But as I said earlier, the time
    difference between when we put the budget together and the
    execution of the program may yield a different answer, but
    right now I believe we have enough dollars to do the job. I
    could get back with you later, both you and Senator Inouye,
    with details of that for the record, and talk to you about it.
        [The information follows:]

                                 Airborne Laser

        We were able to rephase ABL's fiscal year 2004 and fiscal
    year 2005 funding between the submittals of PB03 and PB04. The
    fiscal year 2004 reduction from $830 million to $610 million is
    due primarily to the ``just in time'' payment schedule of the
    ``Green aircraft'' in fiscal year 2005 and stretching of the
    iron bird funding and a better definition of the Block 2004
    requirements.

                            MDA TESTBED, FORT GREELY

        Senator Stevens. Is your Initial Operational Capability
    (IOC) for Fort Greely still the same?
        General Kadish. It is.
        Senator Stevens. For 2004 or 2005?
        General Kadish. We're heading--I have to be more precise in
    order to manage the program and set goals, so our precise date
    is September 30, 2004. Now recognize that date could move
    depending on the problems we deal with in execution, but we are
    driving the schedules to that date on balance.
        Senator Stevens. And how many interceptors does that call
    for at Fort Greely?
        General Kadish. That's up to 10 interceptors.
        Senator Stevens. Will there be any interceptors at Kodiak?
        General Kadish. No, sir.
        Senator Stevens. Will there be any at Vandenberg?
        General Kadish. There will be four at Vandenberg and six at
    Fort Greely, and then the next year we add 10 to Fort Greely.

                                 AIRBORNE LASER

        Senator Stevens. Back to the laser. Do you have a schedule
    for that in terms of what its IOC is?
        General Kadish. I guess the way, the sort of short answer
    is no right now, because we have to actually do the
    demonstration and the test before we can be confident on when
    we can actually build more of those systems. But another way to
    look at it is that once we have the shoot-down with the
    airplane that we have today, we will have a basic capability in
    that airplane if it's needed for other reasons, just like we do
    with the ground-based testbed.
        So, a prerequisite for me to answer that question with some
    certainty is when we actually demonstrate the capability to
    shoot down a missile with high energy laser from that airplane,
    we could make a decision on whether or not we should proceed or
    how we should proceed to build more of those systems. That
    planning is ongoing now but we haven't nailed down a date. I
    would assert that it would be as soon as practical if it's
    successful, because it's such a big addition to the overall
    architecture.

                             BOOST VEHICLE TESTING

        Senator Stevens. Our staff tells me that the Director of
    Operational Test & Evaluation (DOT&E) fiscal year 2002 Annual
    Report indicates that testing of boost vehicles thus far has
    been limited to relatively low velocity intercepts, which tests
    only a small portion of the threat engagement space. What's
    your comment on that? Why is that?
        General Kadish. That's true. This gets back to having the
    test geometry that flies our targets out of Vandenberg and
    intercepts the interceptors out of Kwajalein. Two years ago we
    didn't know whether hit-to-kill could actually work, so what we
    were trying to do with that basic test geometry is to show that
    it not only can work but it can repeatedly do it in the same
    geometry. We have proven that.
        So it is true that the overall envelope, if you will, all
    the different points that we could actually possibly intercept
    an incoming missile, has not been tested. But the key element
    of whether or not we could do it at all and do it reliably has
    been tested in a very small part of that envelope. Now we have
    models and simulations that tell us that all the other parts of
    the envelope, even with that limited amount of testing, we
    could be confident to some degree that this thing would work if
    it was in the right place and deployed configuration.
        So I think this is a natural progression, and that is why
    we need the testbed, so that we could take different geometries
    and plot them within the overall envelope, and then we would
    have more confidence in our computer models and simulations,
    even more than we do today, that it's accurate with real data.
        So, we started out very legitimately with what we are
    testing today, and that provides us some data but it's directed
    to a very limited part of the envelope. Now we want to build a
    testbed and over the next few years fill out the rest of it,
    and that will give us more confidence in our operational
    capabilities.

                        PATRIOT FRIENDLY FIRE INCIDENTS

        Senator Stevens. Turning to Patriot, there have been two
    instances in Iraq where the Patriot has really locked on to
    friendly force equipment. It was explained to us that that was
    the result of a failure of the use of proper Identification,
    Friend or Foe (IFF) codes. Is that true?
        General Kadish. Well, certainly that might be a
    contributor, but I just don't think we know yet based on all
    the things that we need to have from the investigation of that
    problem. Now certainly what we call combat identification,
    which these IFF codes help us with, has been a problem for
    friendly fire incidents for a long time, and any system like
    this has to deal with it. But I don't think we can definitively
    answer that question until we get the investigation over with
    and we get the ops tempo of the war to the point where we can
    do even more investigation on it.
        Senator Stevens. Have we ever tested the Patriot-3 against
    Scuds?
        General Kadish. Yes, Senator, we have, and Scud-type
    materials, and we have a pretty good characterization of what
    we think Patriot-3 can do against those types of threats. Going
    beyond that, I would prefer to give you more classified
    information on that.

                          PATRIOT TESTING/PERFORMANCE

        Senator Stevens. I'm just interested in whether we have
    really explored the full capability and envelope on what the
    Patriot should be relied upon and whether there is a gap there
    in terms of our basic missile defense system.
        General Kadish. I would say that with the testing we've
    done, we have anchored the models and simulations. I think
    maybe Mr. Christie could add some comments to this, but we have
    a pretty good analytical capability anchored in actual test
    data on the capabilities of Patriot-3.
        Senator Stevens. Mr. Christie?
        Mr. Christie. As I stated earlier, we forwarded a
    classified report to Congress last November which is explicit
    as far as the PAC-3 system's demonstrated capabilities and
    against the various threat targets, that we feel confident
    about.
        Senator Stevens. I'm not familiar with that report. Did you
    give it to the Armed Services Committee?
        Mr. Christie. That was a report sent to Congress in
    November 2002, and we can certainly make sure that you get a
    copy.
        The report was based on the testing that was done prior to
    that time, the initial operational testing for PAC-3. PAC-2 was
    used during those tests also. As I stated earlier, problems
    that we encountered in testing, the Army took action to clear
    up. Without getting into detail, I would recommend that you
    take a look at the classified report.

                             SEA BASED X-BAND RADAR

        Senator Stevens. I will. Those are PAC-3s that are over
    there now, right?
        Mr. Christie. Yes. I think we have fired four.
        General Kadish. We have fired four PAC-3s, but most of the
    engagements have involved the PAC-2 version in the blast
    fragmentation activities, so it's an integrated system, and
    they've used it to good advantage. One of the reasons we're not
    using only PAC-3s in my view is that we just don't have enough
    of them in the initial production, and I think the PAC-2 is
    handling it.
        Senator Stevens. You know, I feel a little responsible for
    that to a certain extent, given that we asked the question of
    why it should be used solely against an incoming vehicle, I
    remember that, but we asked the military to boot it up to a
    PAC-2 level and now this PAC-3 level.
        But I really don't totally understand the problem of
    interception with a combat identification or IFF concept. Maybe
    we ought to talk about that in classified session.
        General Kadish. I think that would be helpful.
        Senator Stevens. Why don't we do that, and I want to ask is
    whether that's a defect in the system or a defect in the
    application of the system.
        General Kadish. I think it may be both, it could possibly
    be both.
        Mr. Christie. There are investigations underway into each
    of the three incidents. I think we should wait until they are
    complete before we begin jumping to conclusions as to where the
    fault lies.
        Senator Stevens. You talked before about this in terms of
    the sea-based X-band radar concept. Where does that stand now
    and where is the platform?
        General Kadish. The sea-based approach is ongoing and they
    are doing the engineering and naval architecture and everything
    they need to do to build that radar. I believe the platform is
    about ready to be brought to the United States for construction
    and modification, and we're on the verge of doing that.
        Senator Stevens. What's the time frame on that?
        General Kadish. I believe that's imminent. I would have to
    get you the exact date for the record.
        [The information follows:]

                             Sea-based X-Band Radar

        The SBX platform departed Sandefjord, Norway, under tugboat
    power, on April 25, 2003. It arrived in Brownsville, Texas, on
    May 30, 2003.

        Senator Stevens. This has been significantly accelerated,
    as I understand it; is that right?
        General Kadish. I'm not sure it's accelerated, but it's an
    aggressive plan that we had to build this radar. The platform,
    we were planning on doing it by September 2005, have it in the
    testbed and part of the test for architecture.
        Senator Stevens. Is that going to be added or part now of
    the ground-based midcourse defense system?
        General Kadish. From a testbed standpoint, yes, and then we
    will have to decide whether or not it can contribute from an
    operational standpoint.
        Senator Stevens. Is it planned to move that to various
    portions of the world to test it?
        General Kadish. There is a plan to move it all around the
    Pacific, to be a part of the tests that we have been describing
    here. And that's important, because that also has an envelope
    that we have to characterize. And the disadvantage we have now
    with the radar we have in Kwajalein is that it's out of place,
    it's too far back in the trajectory. And these radars are
    rather huge, this is a 5 million pound radar, the construct
    it's going to sit on. And the advantage we have is that we can
    move it around the Pacific, we don't have to place it on land
    somewhere, and then do the types of trajectory tests that we
    need to do. So it's key from that standpoint.
        Senator Stevens. I hate to tell you, General, but my mind
    goes back to the films my son showed me when he was the captain
    of a king crab boat, a 170-footer, in the Pacific facing 30-
    foot seas. I hope your people are nautical enough to know what
    you're doing to put that kind of a weight on a barge and trying
    to move it around the North Pacific.
        General Kadish. That's something we're paying a lot of
    attention to, Senator. The last thing we want to do is
    jeopardize that type of an asset. We appear, and I have good
    confidence in the naval architects that are doing this and all
    the contractors involved, and I have seen the data on the 100-
    year wave type of activity, and operationally I don't envision
    we would be putting it in that kind of harm's way unless we
    absolutely had to.
        Senator Stevens. Well, respectfully, I don't think you can
    tell you which direction they are going to come from out there.
    That earthquake that hit Hawaii put a tidal wave up our inlet,
    and it came across the sea as a 60-foot wave. Anything that was
    even anchored on shore in either Hawaii or Alaska was destroyed
    and a cruise ship. I really seriously question putting that
    kind of equipment--it's going to be on a platform, it's going
    to be barge-operated, isn't it, pulled by a barge?
        General Kadish. No, it has its own power.
        Senator Stevens. It's self-propelled? What's its dimension,
    do you remember, how wide is it?
        General Kadish. I would have to get the actual numbers for
    the record but I think it's got, the platform on top is at
    least 300 yards wide.
        [The information follows:]

                             Sea-based X-Band Radar

        The SBX platform is self-propelled, and when complete it
    will be able to travel at a maximum rate of approximately 10
    knots. Normal transit speed will be approximately 7 knots. The
    Moss CS-50 platform is 238 feet across at its beam and 389 feet
    long. It is 137 feet tall, from its keel to the main deck.

        Senator Stevens. So it's self-propelled and 300 yards wide?
        General Kadish. This type platform operates in the North
    Sea today doing oil drilling, so it's designed to be
    stationary.
        Senator Stevens. I've seen it; in fact, it's Norwegian.
        General Kadish. That's right.
        Senator Stevens. It has a drilling rig on it, it didn't
    have that kind of weight on it. Well, I'm not going to belabor
    it, but I have serious questions in terms of, you know, the
    shores of Alaska are just loaded with barges which got struck
    broadside by a wave.
        General Kadish. I understand, and we're taking those
    concerns to heart, Senator.

                   MEDIUM EXTENDED AIR DEFENSE SYSTEM (MEADS)

        Senator Stevens. With regard to the MEADS concept, this is
    an international program now with Germany and Italy, correct?
        General Kadish. That's correct, Senator.
        Senator Stevens. Last year we transferred that program to
    MDA and this budget transfers it back. Is this going to be a
    ping pong game? Why is it coming back within 1 year?
        General Kadish. Well, I think there are a couple reasons
    for that. One is that the basis of the MEADS program is the
    PAC-3 missile. As a key component we decided to make that
    particular weapons system, and overall it is an international
    practical system designed to take a PAC-3 missile and make the
    radars and the mobility of this system fit our operating style
    for the next decade. It is fundamentally an air defense system
    with a ballistic missile defense capability, basically what
    Patriot is today.
        And so that combination, along with the fact that we're
    using the Patriot-3 missile which we basically developed
    already, makes sense to put it under the management of the
    United States Army as an integrated system, within Patriot, and
    have a transition from Patriot to a MEADS type of configuration
    over time. And we discussed this long and hard within the
    Department, and the overall conclusion is that this is a better
    way to manage the program and I think you will see management
    or program improvements as a result of this process. And from
    an overall funding perspective, it makes sense to integrate
    these programs within the Army, and that's why you see it
    coming back into the Army line.
        It is more than just budget, it is how we manage the
    program. Now, we will still have partnership with the Army over
    its integration into the overall missile defense system and
    we're working that management linkage today. But fundamentally
    it needs to be an air defense and ballistic missile defense
    integrated system, which is best managed with the Army handling
    those issues. I don't know if you wanted to add anything.
        Mr. Christie. No, I agree with that. In fact, we just had a
    review of the program, I guess Monday morning, at which these
    issues were aired in support of the decision to transfer the
    overall management responsibility to the Army because of the
    considerations that General Kadish has outlined here.
        Senator Stevens. Have the current problems we have with
    Germany and Italy at all affected this program?
        General Kadish. I think actually we're coming to the end of
    what we call the Program Definition and Risk Reduction (PDRR)
    phase, the research and development stage of this program,
    getting ready to negotiate the next section of the
    international agreement. And I think overall, they haven't
    affected the execution of the present program in the process.
    Now we may need some adjustments as we go forward into the next
    phase of the program.
        Senator Stevens. This will require a contribution from all
    three countries to affect this newest phase?
        General Kadish. That would be the hope, yes, Senator, so we
    can share some of the development costs with the partners that
    are enrolled. If I recall correctly, I think the cost share is
    somewhere in the neighborhood of 45 percent for our partners
    and 55 percent for us, so if we can really make this
    relationship work, we get a better deal from the overall
    cooperative program.

                              MDA TESTBED--KODIAK

        Senator Stevens. This is my last question. You made a
    comment about the Kodiak phase of this, that there would be no
    interceptors there, just the missiles to be tested, right?
        General Kadish. Targets.
        Senator Stevens. The target missiles; is that right?
        General Kadish. That's the current plan.
        Senator Stevens. Have you put a schedule out for that, so
    we will know in advance how many of those will be tested there?
        General Kadish. I think we're working on the next 2 years,
    and we will get you that information.
        [The information follows:]

                            Kodiak Targets Schedule

        Over the next two years, our current plan shows two tests
    using the Kodiak Launch Complex. A STARS target launch
    conducted as part of a GMD Integrated Flight Test in the 1st
    Qtr fiscal year 2004 and a STARS target launch conducted as
    part of a GMD Risk Reduction Flight in the 4th Qtr fiscal year
    2004. On the first test the target will fly a trajectory
    towards Kwajalein. The second test will include a target flying
    a trajectory toward the open ocean area west of Vandenberg AFB.

        Senator Stevens. I was just wondering, how far out is it
    going, 2 years?
        General Kadish. Right now we're working on the next 2 years
    with the follow-on program right after that.
        Senator Stevens. That's fiscal year 2004?
        General Kadish. Fiscal years 2004 and 2005, and then we
    will work on the next 2-year process as soon as we get that.
        Senator Stevens. Again, I congratulate you. I share Senator
    Cochran's point of view that utilizing the testbed concept and
    having some missiles available, due to the tensions that exist
    in the North Pacific, is a very wise course to be on, and I
    congratulate you for it. You were ahead of the curve on that
    one.
        Certainly with some of the developments taking place over
    there now, I just told Senator Inouye, I went home and talked
    to them about some of the things that have been going on, and
    our people are very worried about what's going on in North
    Korea, and we have every reason to worry about it.
        But we look forward to perhaps getting a schedule,
    gentlemen, if you wish, right after we come back, if we could
    have a classified session, no hearing, just session where you
    might talk to the people here who are really concerned about
    the security phase of this, I would appreciate it.
        General Kadish. I would be more than happy to, Senator.
        Senator Stevens. Senator Cochran, further questions?

                   THEATER HIGH ALTITUDE AIR DEFENSE (THAAD)

        Senator Cochran. Thank you, Mr. Chairman, I do have a
    couple more questions. One is about the theater high altitude
    air defense program, which seemed to have gotten off to a
    pretty fast start, and there was some sense of urgency
    following the Gulf War that we needed this system. But it seems
    that it slowed down, and a fairly low risk schedule at this
    point seems to characterize the program. I wonder what your
    plans are for your next intercept test. I understand it's not
    scheduled until fiscal year 2005. Is that going to be a program
    that's going to go slower rather than faster?
        General Kadish. I think, if I may take a crack at that
    first, I think some of the lessons we learned from that in what
    we call the PDRR phase in the latter part of the nineties, we
    took it to heart and as you know, the last two intercepts were
    very successful, gave us great confidence in proceeding with
    THAAD and the program.
        The program we put together basically redesigned the
    missile and the processes involved within THAAD as well as some
    of the radar work to get a much more capable system than what
    we had been working on, even in the PDRR phase.
        That flight test program was laid up, I guess we started
    that in the 2000 time frame, and we have been working real hard
    on that. And the first flight tests are still scheduled for
    late 2004, early 2005, with the first two tests of the missile
    being a non-intercept test.
        And we believe that is exactly the right development
    approach for us to take and there are two reasons for that. One
    is that we're doing extensive ground testing right now at the
    component level so that we can wring out the quality and design
    flaws at the component level before we assemble them and then
    test them in these first two or three flight tests. The second
    reason why I think that's important is that if we are
    successful in doing what I just described, that I would have
    high confidence that our early intercept tests would all be
    successful. And under those conditions, we could move faster
    with the balance of the program than if we had failures in the
    overall sequence.
        So, I'm expecting now that we are about 30 percent and
    climbing complete, almost 40 percent overall finished with this
    design phase, that we will have done the job that I described
    and we will set the foundation for success and that in the end,
    we will have made THAAD in a deployed configuration sooner than
    if he had tried to go faster. And I know that has been a major
    debate, but only time will tell if we were right about that.
        Mr. Christie. I totally agree with that. I think we learned
    some harsh lessons, and in fact that's where the term rush to
    failure was coined in the description of some of the activities
    that we had underway in THAAD. As General Kadish says, we have
    backed up and are doing some component testing which have been
    successful recently, walking before we run and doing this
    right, so when we get to the actual flight tests of the system
    next year, the latter part of next year, we will have
    confidence and we will not encounter some of the problems that
    we had before.

                   SPACE TRACKING SURVEILLANCE SYSTEM (STSS)

        General Kadish. And I would add one thing. If we add those
    successes early on, we will find it's taking major risks if we
    accelerate, and we feel that it is adequate.
        Senator Cochran. Last year you restructured the Space Based
    InfraRed System (SBIRS) low program and renamed it STSS. What
    does that stand for?
        General Kadish. Space tracking and surveillance system.
        Senator Cochran. My question is, it seems to be a less
    ambitious program than the earlier version. Do you still think
    that you need to have these advanced tracking systems deployed
    in space, or are you rethinking that entirely?
        General Kadish. I know we're rethinking the combination of
    sensors we have without the treaty now. We want to make sure
    that we have the best combination of sensors, and there is a
    major debate inside the community, if you will, over whether we
    should have space sensors or land-based or terrestrial-based
    radars, or a combination of things based on affordability
    reasons and a whole host of other catch phrases. In my view,
    that debate is not resolved yet, and the STSS program that we
    put together is designed to get us more data than just view
    graphs to base the decision on, and it is important for us to
    proceed in that regard.
        So, we are rethinking the overall sensor requirements for a
    system without treaty restriction. What I see today does not
    dissuade me that we do not need to do--I should probably say
    that I am persuaded that the track we're on is the right track,
    and we need to get these systems better understood. And a
    fundamental issue around STSS is whether the long-wave infrared
    is the appropriate technology to use for that satellite, and we
    will answer that question with the STSS program.
        Senator Cochran. Thank you.
        Senator Stevens. Senator Inouye?
        Senator Inouye. Thank you very much.

                        MISSILE DEFENSE COUNTERMEASURES

        Mr. Christie, some of the critics have suggested that very
    inexpensive countermeasures such as balloons or chaff can foil
    our very expensive missile defense systems. Are we testing more
    complex countermeasures and decoys?
        Mr. Christie. As we go on with our flight tests, yes, we
    will, you know, address more complex countermeasures than we
    have in the past. You know, one has to step back and think, do
    these complex countermeasures, we have a difficult time
    building them ourselves, and we have to wonder what kinds of
    capabilities are really going to be there with the enemy's
    system. But yes, we do plan to get into more complex, more
    difficult countermeasures.
        We, again, in the program or test flights that we've had to
    date, we were trying to demonstrate primarily the hit-to-kill
    capability, and we were using simple countermeasures to get
    some idea about the ability of the seeker to discriminate. And
    again, that was walk before you run, so some of the criticisms
    I think have been misplaced. You can't just jump in with a
    massive countermeasure to defeat the purpose of your original
    test, which was more technology oriented. But as we go along
    with our flight tests, our present plan is to increase the
    complexity of the systems that we are targeting, yes.

                               MDA TEST SCHEDULE

        Senator Inouye. So you're satisfied with your testing
    schedule?
        Mr. Christie. Well, as a tester, one would always want to
    test more, but I understand and support the concepts of the
    plan that we have underway right now, and I think it's so
    important that we get this testbed in place in order to
    overcome some of the artificialities that we have had in our
    testing to date, which the critics have jumped on. This testbed
    will permit us to do far more realistic testing, not just in
    the context of countermeasures, but geometries, velocities that
    we talked about, crossing angles and other parameters that we
    need to be looking at in a more realistic fashion.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Inouye. Like my colleagues, I would like to tell
    you that I am very satisfied with the work your agency is
    doing, and I for one will be in favor of keeping your roles.
    But, as you know, my friend from Alaska and I do live in the
    Pacific, and we do get a little edgy once in a while. Thank
    you.
        Senator Stevens. Any more questions, Senator?
        Senator Cochran. No, sir.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

           Questions Submitted to Lieutenant General Ronald T. Kadish
                Questions Submitted by Senator Dianne Feinstein

                          AGGRESSIVE TESTING SCHEDULE

        Question. Thomas P. Christie, Director of Operational Test and
    Evaluation for the U.S. Department of Defense, cited the past tests
    lacked realistic positioned midcourse sensor to track incoming enemy
    missiles and variety in test intercept locations, and asserts more
    stringent and improved testing procedures are needed to ensure the
    success of the program.
        Can you confirm that we have in fact embarked on an aggressive
    testing schedule that adequately addresses the real world intercept and
    decoy scenarios a missile defense system may face?
        Answer. Yes, I can confirm that both the ground and flight testing
    that is planned for the BMDS system and its elements are aggressive and
    build in complexity, to include more realistic test geometries and more
    sophisticated countermeasures. One of the characteristics of the
    capabilities based approach is to take manageable steps toward the
    objective system, while learning how to improve performance and expand
    coverage based on its performance during earlier block testing. This is
    particularly important in and evolving threat environment.

                    AVAILABILITY OF A MATURE EFFECTIVE BMDS

        Question. At our current rate of testing and development, when do
    you think we will have the technological maturity to fully field an
    effective missile defense system?
        Answer. Since the state of threat technology continues to progress,
    we will have to continually improve BMDS performance and verify new
    capabilities through testing. This will include conducting tests
    against new, more challenging targets, and associated countermeasures.
    In this respect, technological maturation will continue even after full
    fielding is realized. If we successfully complete testing that is
    currently scheduled, I believe that we will improve the BMDS and, more
    importantly, our confidence in its performance, so that by the end of
    the decade we will have a well-characterized capability that can be
    relied upon. It is more difficult to predict whether or not
    countermeasures designed to defeat the BMDS will keep pace with
    development.

                         BOOSTER ENHANCEMENTS FOR AEGIS

        Question. Before deployment, the Sea and Ground Based Mid-Course
    segment will need to improve the effectiveness of the Standard Missile-
    3 (SM-3) to intercept ICBMs during the ascent phase of mid-course
    flight. To achieve this, the current SM-3 will need to be larger and
    faster than the current model used for testing.
        Is the improved SM-3 ready for testing?
        Answer. Because the Block 04 Aegis BMD is not intended to engage
    ICBMs, only SRBMs and MRBMs, no propulsion improvements to the SM-3
    missile are currently planned. Consequently, readiness for testing
    becomes moot.

                  NO AEGIS BOOST PHASE CAPABILITY IN BLOCK 04

        Question. If not, will any delay dramatically affect the
    capabilities of the Block 04 system the administration is looking to
    deploy?
        Answer. The lack of an enhanced booster for the Aegis BMD system
    will not affect the capabilities of the Block 04 system. The role of
    Aegis in the Block 04 system will be to provide engagement capability
    against SRBMs and MRBMs, surveillance and tracking of long-range
    targets, automatic search and acquisition of a target from a cue
    provided by an external sensor, and limited ship self defense. The
    target cue provided by Aegis will be used by the Ground-based Midcourse
    element of the Testbed to launch ground-based interceptors at the
    threat. Subsequent block development will include the enhancements to
    the Aegis Weapon System for IRBM capability.
        Question. The 2004 missile defense budget is seeking $7.7 million
    for RDT&E (research, development, test and evaluation).
        Given the high costs that have already been projected for RDT&E,
    based upon current research and success, what do you estimate the
    complete layered system will cost?
        Answer. As directed by the President, we have a near-term
    architecture for a limited missile defense system. A capabilities-based
    architecture provides the flexibility to evolve the system over time in
    response to changes in threat and technology. Fielding opportunities
    occur throughout the development, starting with Block 2004. The cost of
    a ``complete'' system is unknowable at this time because the threat we
    may have to counter is unknowable. We're embarking on an affordable R&D
    program that fields modest capabilities in fiscal year 2004 and then
    improves them over time to keep pace with an evolving threat.
        Question. The completed ballistic missile defense system will need
    to be an overlapping system-of-systems that is reliable, robust,
    capable of incorporating up-grade features as their feasibility is
    demonstrated, and able to engage threats at each stage of their
    employment-boost phase, midcourse, and terminal. The President
    requested to have a missile defense system in place by fiscal year 2004
    and the implementation of a final overlapping system-of-systems by
    fiscal year 2010.
        Based on the current success of the program, do you believe that
    this milestone will be met?
        Answer. We have an aggressive RDT&E program that is on track to
    develop a set of missile defense capabilities for initial defensive
    operations in fiscal year 2004. Our recent testing and analysis gives
    us confidence in responding to the President's December direction to
    deploy an initial capability, and we will continue robust RDT&E to
    build on that initial capability in an evolutionary manner to keep pace
    with emerging threats and technological advances.
        Question. In the fiscal year 2004 budget request, there was a
    request for an exemption of further operational testing of the
    ballistic missile defense system. In March, the Undersecretary of
    Defense, Edward Aldridge announced, ``It was not our intent to waive
    operational testing.''
        If the intent was not to exempt testing prior to fielding the
    weapon system, what was the purpose of the exemption request?
        Answer. The question refers to proposed section 8061, which read in
    full:

        ``Sec. 8061. Funds available to the Department of Defense under the
    heading, `Research, Development, Test and Evaluation, Defense-Wide' may
    be used to develop and field an initial set of missile defense
    capabilities, and such fielding shall be considered to be system
    development and demonstration for purposes of any law governing the
    development and production of a major defense acquisition program. The
    initial set of missile defense capabilities is defined as `Block 04'
    Ballistic Missile Defense system fielded in fiscal year 2004 and 2005.
    Subsequent blocks of missile defense capabilities shall be subject to
    existing laws governing development and production of major defense
    acquisition programs.''

        This was not drafted to waive operational testing, as the fielded
    developmental items will continue to be tested. However, we understand
    concerns that the language ``and such fielding shall be considered to
    be system development and demonstration for purposes of any law'' would
    have that effect, and agree to delete it and all that follows.
        Question. Does testing under the guidelines of the Director of
    Operational Testing and Evaluation negatively impact the program?
        Answer. No, the program is not negatively impacted by DOT&E testing
    guidelines. MDA and DOT&E have established an effective working
    relationship. DOT&E is a member of the Missile Defense Support Group
    and provides testing advice to the Director, MDA and to USD (AT&L).
    Additionally, DOT&E produces a congressionally directed annual report
    on the status and effectiveness of the MDA test program.
        Question. What is the current MDA position on this request?
        Answer. MDA supports striking all after ``capabilities'', so that
    Sec. 8061 will read as follows: ``Funds available to the Department of
    Defense under the heading, `Research, Development, Test and Evaluation,
    Defense-Wide' may be used to develop and field an initial set of
    missile defense capabilities.''

                                     ______

                   Questions Submitted to Thomas P. Christie
               Question Submitted by Senator Kay Bailey Hutchison

        Question. Is the Theater High Altitude Area Defense program
    experiencing a shortfall in funding that will delay the program's
    progress? If so, please explain your plan to remedy the situation.
        Answer. The THAAD program is not experiencing a shortfall in
    funding that would delay the program's progress. The THAAD element just
    completed a program re-plan that provides for the most efficient use of
    resources, the most effective program schedule, and realigns the flight
    tests for a balanced program. The program is progressing well in Block
    04 and executing on plan to initiate Block 04 flight-testing with first
    flight in 4QFY 2004, followed by four additional flight tests to be
    conducted before the end of Block 04 (December 2005). The THAAD program
    is currently engaged in intensive piece part, assembly, and component
    ground testing to assure Block 04 flight test success.

                                     ______

                Questions Submitted by Senator Dianne Feinstein
        Question. Mr. Christie, in your statement, you mentioned your
    initial assessment (annual review) concluding the GMD (Ground-based
    Midcourse Defense) element of the BMDS has not yet demonstrated
    operational capability is based on the fact that many essential
    components of the GMD element have not yet been built.
        What are these components?
        Answer. Booster motors, sea-based radar (x-band), missile silo
    complex at Fort Greely and Vandenberg.
        Question. Are any of these components scheduled for procurement at
    a later block?
        Answer. Booster motors.--Booster motors that are currently under
    development will be used for the Block 2004 Test Bed and initial
    defensive operational capability. Testing of the OSC and BV+ boosters
    is a high priority for MDA, and there will be four flight tests (two
    booster verification flights and two integrated flight tests with
    simulated intercepts) during the rest of this fiscal year.
        SBX.--The SBX is planned to be added to Block 2004 at the end of
    2005.
        Missile silo complex at Fort Greely and VAFB.--The silos at Fort
    Greely are currently under construction as part of the Block 2004
    initial GMD parts of the BMDS Test Bed and IDO capability. The
    additional silos at VAFB will be renovated to support Block 2004 IDO.
        Question. When should we expect the essential components to be
    fielded?
        Answer. Booster motors.--Booster motors will be fielded in the
    initial defensive operational capability no later than September 30,
    2004.
        SBX.--The SBX is planned to be added to Block 2004 at the end of
    2005.
        Missile silo complex at Fort Greely and VAFB.--Six silos at Fort
    Greely and four at VAFB will be a part of the initial defensive
    operations capability fielded in 2004.
        Question. When will the MDS be accurately tested for operational
    capability?
        Answer. With the President's decision to field an initial set of
    missile defense capabilities, we now have a clear, basic, near-term
    architecture for a limited system to address a range of missile
    threats. The initial testbed will be used to test maturing BMD systems
    as they become available to evaluate the operational capability of the
    system.
        Current testing of the Ground-Based Midcourse Defense (GMD) Element
    developmental prototype is structured as combined Developmental
    Testing/Operational Testing (DT/OT), occurring in a Combined Test Force
    (CTF) environment. A CTF environment brings together developmental and
    operational testers from both the prime contractor team and the
    government in a common forum to plan and execute all testing in
    accordance with combined DT and OT objectives to the maximum extent
    practicable. Because GMD is an evolutionary development, at designated
    intervals this process culminates in BMD Elements characterization,
    performed by the Operational Test Agencies (OTAs), i.e., Army Test and
    Evaluation Command (ATEC), Air Force Operational Test and Evaluation
    Center (AFOTEC), and Joint Interoperability Test Command (JITC).
        The Aegis Ballistic Missile Defense Program has a Memorandum of
    Agreement with Commander, Operational Test and Evaluation Force
    (COMOPTEVFOR), the Navy's OTA, to participate in the planning and
    observe all Aegis BMD Block 04 testing. Within 60 days of the
    conclusion of each test, COMOPTEVFOR provides a ``Letter of
    Observation'' which provides formal OTA feedback regarding system
    performance to the Program Director, Aegis BMD. COMOPTEVFOR's
    recommendations are then considered and, if possible, implemented in
    subsequent testing. Flight Mission 9, which is currently the last test
    of the Aegis BMD Block 04 program, is currently being planned as a
    combined DT/OT in that COMOPTEVFOR will conduct a formal Operational
    Assessment of the system.
        Current planning efforts for Initial Defensive Operations (IDO),
    scheduled to be in place on September 30, 2004, include the
    identification of test objectives based upon element interoperability;
    Command and Control, Battle Management, and Communication (C\2\BMC);
    Engagement sequences, and Warfighter operational control issues. These
    will be overlayed onto GMD and Aegis BMD element tests scheduled
    between now and IDO that will afford an opportunity for an operational
    assessment of BMDS Initial Defensive Capability (IDC). Tests will be
    conducted in the BMDS Test Bed with operational configurations and user
    participation.
        Question. Mr. Christie, if the initial fielding of the BMDS is to
    develop a testbed for further research and not employ an actual defense
    system, wouldn't it be more cost effective to complete the testing
    under the initial fielding, with minimum missiles, than to field the
    budget request and have to go back later to retrofit?
        Answer. Before the President's December decision to deploy a
    missile defense, the fiscal year 2003 President's Budget reflected the
    development of a set of test bed capabilities that could be made
    operational. The fiscal year 2004 President's Budget I, based on the
    President's direction, asks Congress to authorize and appropriate funds
    to allow us to add to this test bed and make it operational in 2004.
    Therefore, instead of building a test bed that might be used
    operationally, we are fielding an initial defensive capability that we
    will continue to test.
        There is tremendous benefit to fielding this unprecedented
    technology, in manageable increments, to provide some defense, to learn
    more about it, gain experience with it, and improve it over time. To
    achieve this benefit for MDA and our warfighters, we must have the
    assets and infrastructure in the field if we are going to begin to test
    the system under operationally realistic conditions. If we do not have
    the weapons and sensors fielded at operationally useful locations, we
    cannot realize these benefits and ensure the integrated system works in
    a useful manner for our military.
        Additionally, there is historical precedence in this approach as
    evidenced with development of our first reconnaissance satellites and
    land- and sea-based ballistic missiles. Urgent national security
    requirements pressed us to deploy capability soon, and through trial
    and error we did. The parallels between these pioneering programs and
    the missile defense program are clear.
        Our test bed evolutionary approach to initial defensive capability
    is rational from a cost standpoint as well. We do not now have adequate
    understanding of our long-term architecture to submit a budget for many
    tens of billions of dollars, and we don't need to submit such a budget
    to achieve our goals in the interim. We are able to purchase and field
    capabilities in small numbers and this approach will allow us to
    control costs and mitigate the requirement for retrofitting.
        Finally, we have to strike a balance between our desire for
    perfection in missile defenses that we deploy, and our desire to have,
    as soon as possible, some defensive capability where none exists today.

                              SUBCOMMITTEE RECESS

        Senator Stevens. Thank you very much, General Kadish and
    Mr. Christie. We appreciate you being with us this morning and
    look forward to you talking to us after the recess.
        The subcommittee will next meet on April 30 for the defense
    medical program hearing. Thank you very much.
        [Whereupon, at 11:17 a.m., Wednesday, April 9, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    April 30.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                           WEDNESDAY, APRIL 30, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 11 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens and Inouye.

                             DEPARTMENT OF DEFENSE

                                Medical Programs

    STATEMENT OF LIEUTENANT GENERAL JAMES B. PEAKE, SURGEON
                GENERAL, UNITED STATES ARMY

                 OPENING STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Just to advise the chairman of the
    committee, I have just been advised Chairman Stevens is at the
    White House meeting with the President. He will be slightly
    delayed, so in his behalf I'd like to welcome you to our
    hearing this morning to review the Department of Defense (DOD)
    medical programs, facilities and the health program.
        As you know, under the chairman's leadership, this
    subcommittee has a long history of supporting and protecting
    the medical needs of our military. As our soldiers, Marines,
    airmen, and sailors are deployed in harm's way, our military
    health system is vitally important. We have all been captivated
    by the scenes displayed on television 24 hours a day, enabling
    the public to witness our military in action.
        What we do not see is the entire force health protection.
    Our military health care covers all the bases from the TRICARE
    program, medical treatment facilities, predeployment physicals,
    medics and field hospitals to the continued monitoring of our
    military personnel in the field and after they return. These
    all are essential pieces to the health of our military.
        Over 24,000 medical personnel have been deployed in support
    of Operation Noble Eagle and Enduring Freedom and Iraqi
    Freedom. Unfortunately, the services have been granted limited
    authority to backfill those positions, and cannot afford to
    contract all the additional support that is needed. In order to
    address some of these shortfalls, Congress provided additional
    funding in the fiscal year 2003 supplemental appropriations for
    the medical treatment facilities and care for the service
    members and their families at home.
        At this morning's hearing, I hope the committee will hear
    how the fiscal year 2004 budget request addresses our medical
    treatment facilities, and our medical care, and how we do deal
    with the potential gap in resources if the current OPTEMPO
    remains as high during fiscal year 2004. And so we look forward
    to a frank and open discussion this morning with our panels.
        In particular, we will want to look into the status of the
    next generation contracts for TRICARE, our force health
    protection system, optimization, and the rising costs of health
    care, among others. I'd like to thank our chairman for
    continuing to hold hearings on these issues, which are very
    important to our military and their families.
        If I may, I'd like to call upon the first witness,
    Lieutenant General James Peake, Surgeon General for the United
    States Army.
        General Peake. It is an honor to represent Army medicine
    before you today. Once again, it is the support of this
    committee that it has given to the care of soldiers and their
    families, support of the committee for military medical
    infrastructure to train the medical force, their research over
    an extended period of time that really has allowed us to field
    items like advanced skin protectant, or chem/bio protective
    systems for medical units, or vaccines to protect the soldiers,
    or for hemostatic dressings.
        That support has paid off for the men and women injured and
    wounded in the service to their nation. Wounded soldiers have
    been treated far forward with surgical teams that we really
    didn't have during Desert Shield, Desert Storm. They moved
    rapidly back through our combat support hospitals, now
    modularly configured hospitals. They flew back on Blackhawk
    medevac helicopter fleet, not the old UH-1s, military
    helicopters, including the UH60 Limas with specially designed
    patient care compartments facilitating in route care.
        Our soldiers have been strategically evacuated with
    critical care teams back to Landstuhl or Rota. I had the honor
    of pinning a Purple Heart on one of our noncommissioned
    officers at the burn unit at Fort Sam Houston last week. Both
    arms were outstretched with fresh skin grafts. The burns on his
    face were extensive and covered with silvadene cream which had
    its genesis from the burn research unit in years past.
        He told me about each of his men, and he told me about the
    tremendous care that he received as he and they moved back from
    the theater of operations on Army hospitals on the U.S.N.S.
    Comfort back to Landstuhl, and at the burn unit.
        I can tell you that the soldiers with me that were taking
    care of him stood taller as he related the story to us.
        That burn unit is another story. It is an institute for
    surgical research working not only on burns, but on the
    physiology of injury. It is where some of the work on
    hemostatic bandages is going on now, where we have done key
    studies on orthopedic consequences of land mines. There they
    deal with trauma every day as part of the Trauma Consortium in
    San Antonio. It is commanded by Colonel John Holcomb, a trauma
    surgeon with our special operations forces in Somalia during
    Blackhawk Down.
        The issue is key people at the right places who understand
    not only the environment in which we work, but the bonds of
    soldiers in combat. Key people in the right places like the
    Ranger doc whose hand of Private First Class (PFC) Lynch would
    not let go of during her rescue, medics at the tip of the
    spear.
        At Walter Reed, our land mine center of excellence is a
    strong partnership with the Veterans Administration as we look
    at the long-term care and leveraging the very best care across
    the country. As we do all of this, military medicine is
    resetting the TRICARE contract, looking to improve the service
    we give with fewer regions, with some functions returning to
    the direct care system in 2004 with the national pharmacy
    coverage, to improve portability and all of that is important
    to taking care of our soldiers, but also in keeping a full and
    rewarding practice for those doctors that are in Iraq today
    taking care of patients.
        It is fundamental to our medical readiness and medical
    retention. Our joint training programs at places like Walter
    Reed and Wilford Hall and San Diego are the force generators of
    our medical force of the future. The care we give in such
    places as the 121 Hospital in Korea or Fort Irwin or Fort Polk
    or on a distant battlefield is linked to the quality base that
    those centers provide.
        As always, this committee's support for keeping the full
    spectrum of military medicine of a quality befitting our
    soldiers, sir, and their families, is appreciated by all of us
    here and by those across the world serving our Nation.
        Things as important and as big as the things we talked
    about, things as important as being able to purchase clothing
    for our soldiers as they are evacuated back from military
    treatment facilities or the authority recently authorized in
    the supplemental in that allow military families to see their
    patients that are in military treatment facilities (MTFs), and
    for us to be able to facilitate that. And so for the little
    things, sir, and the big things, we thank you for your support
    and the chance to be with you today.

                               PREPARED STATEMENT

        Senator Inouye. I thank you very much, General Peake. May I
    now call on Vice Admiral Michael Cowan, Surgeon General of the
    Navy.
        [The statement follows:]

            Prepared Statement of Lieutenant General James B. Peake

        Mr. Chairman and Members of the Committee, I am Lieutenant General
    James B. Peake. I thank you for this opportunity to appear again in
    front of your committee. This is my third time before you as the Army
    Surgeon General and each time it has been a different environment of
    challenges. Each has underscored the importance of Army Medicine
    specifically and military medicine in general.
        All around the world, Army medical personnel are serving in
    splendid fashion to carry out our mission of supporting America's Army
    as it defends freedom.
        That a soldier could be severely wounded in Afghanistan on a Monday
    and on Saturday night be at Walter Reed Army Medical Center in
    Washington, D.C., telling me of his care at the forward surgical team
    in Afghanistan, his movement to the combat support hospital in
    Uzbekistan; the transit through the Air Force facility at Incerlick,
    Turkey, and the operation he got at Landstuhl, Germany--all in less
    than a week--is nothing short of miraculous.
        The Army fighting for freedom in Iraq has confidence in its medical
    support. While we help carry out national policy in that arena, we also
    carry on other missions. We are providing quality medical assistance in
    over 20 countries today. Medics are helping keep the peace in the
    Balkans, standing guard in Korea and Europe, supporting anti-terrorist
    efforts in the Philippines, training on medical assistance missions in
    Central America and supporting assistance missions in Africa.
        We made visible progress in the past year transforming our field
    medics into the new 91W Healthcare Specialist Military Occupational
    Specialty. I am frankly excited at the increase in emphasis on medical
    skills that can mean the difference between life and death for a
    soldier on the battlefield.
        To continue this success between the garrison and field units is
    paramount. Visiting the 25th Infantry Division in Hawaii, I walked the
    lanes for combined Expert Infantry and Expert Field Medical Badge
    testing. It reaffirms the unique link that we in the Army Medical
    Department (AMEDD) have with those who close with and destroy the
    enemy, and underscores the need to hone medical skills as we are doing
    with the 91W program.
        This marriage between garrison and field operations is also where
    we need to go for the longitudinal, digital record of patient care. We
    are not where we need to be, but we have an exciting axis of advance
    with CHCS (Composite Health Care System) II and the linkage with the
    corresponding theater system, CHCS II (T). I am anxious to see the
    Stryker Brigade at Fort Lewis demonstrate the use of the hand held
    input devices at the level of the medic, in garrison or in the field.
    This device digitizes the key information of the patient encounter at
    the first level of care and will follow that patient, ensuring that
    vital information is archived and longitudinally available, to enhance
    his or her care wherever in our system he receives his follow on care.
    Resourcing this transformational process will create the model for
    health care across the nation.
        We have transformed 28 percent of Corps and Echelon Above Corps
    medical force structure through the Medical Reengineering Initiative
    (MRI). The transformed units promote scalability through easily
    tailored capabilities-based packages that result in improved tactical
    mobility, a reduced footprint and an increased modularity for flexible
    task organization.
        MRI supports the Army Legacy and Interim Forces and is the
    organizational ``bridge'' to the Objective Medical Force. MRI enables
    supported Army, Joint Force, Interagency and Multinational leaders to
    choose among augmentation packages that result in rapid synchronization
    of enabling medical capabilities.
        Within the Army Reserve, this force structure results in improved
    personnel readiness due to reduced personnel requirements. It also
    improves the average age of Army Reserve hospital equipment sets, due
    to redistribution of newer sets against reduced requirements. We must
    keep moving along this path to improved responsiveness.
        Medical Research and Materiel Command is making great progress in
    equipping medics to serve with the transformed Army of the future on
    expanded, technology-dense, rapidly-changing battlefields.
        Some of the recent initiatives include:
      --The Forward Deployable Digital Medical Treatment Facility, a
            research platform to develop lighter, more mobile field
            hospitals using new shelters and technology. Plans are for two
            to four soldiers to be able to carry and set up a tent and all
            the equipment in it. The facility will include a wireless local
            area network and a communication system interoperable with the
            Warfighter Information Network architecture.
      --Portable oxygen generators to avoid the necessity of transporting
            numerous 150-pound canisters of oxygen to field medical units.
            We have already seen the value of this as we prototyped into
            Afghanistan.
      --The Telemedicine and Advanced Technology Research Center is
            exploring how personal digital assistants can be used to
            improve medical record keeping, give providers instant access
            to medical information and patient histories, alert providers
            of lab results, speed the flow of information and shorten the
            time medics on the battlefield must spend filling out forms.
            One deploying brigade has been outfitted with a prototype of an
            electronic ``dog tag'' to make sure we understand how this
            might change our business practice and improve our record
            keeping in the ground combat scenario.
      --The U.S. Army Medical Materiel Development Activity and Meridian
            Medical Technologies developed an improved autoinjector for
            nerve-agent treatment shots, which was approved by the Food and
            Drug Administration last year. The injector allows a soldier to
            inject atropine and 2 pralidoxime chloride through the same
            needle. Compared to older equipment, it will take up less
            space, is easier to carry, easier to use and puts the drugs to
            work faster.
        The Interim Brigade Combat Teams are beginning to receive the first
    Stryker Medical Evacuation Vehicles. With a top speed of 60 miles an
    hour, this armored ambulance will be able to keep up with the fight. It
    can carry four litter patients or six ambulatory patients, and allows
    basic medical care to be provided during transport. The excitement is
    palpable in our young soldiers who have had their first hands on
    experience with this vehicle. They see it designed with enroute care in
    mind; a medical vehicle that can keep up with the force, share a
    common, maintainable platform, and link to the common operating picture
    with those they support.
        The deadly potential of chemical, biological, radiological, nuclear
    or high-yield explosive (CBRNE) weapons has been known for centuries,
    but never before has the threat seemed as evident or as imminent.
        This history underscores the importance of the medical system as
    the front line of defense. In the past year we have emphasized the
    training of all Army Medical Department (AMEDD) personnel to ensure we
    have the edge when it comes to responding to the threat of terrorism
    using CBRNE weapons. The Army Medical Department Center and School has
    prepared exportable, tailored and scalable courses for use at medical
    treatment facilities; it is addressing CBRNE in every short and long
    course; and addressing CBRNE casualties in every ARTEP (Army Training
    and Evaluation Program) unit testing program.
        Among the course changes:
      --AMEDD soldiers common skills.--In addition to long-established NBC
            defense skills and buddy aid, all AMEDD soldiers get CBRNE
            orientation and patient decontamination training.
      --Advanced Individual Training and functional courses.--Military
            specialty training courses and specialized skill courses have
            incorporated specialty-specific CBRNE instruction, including
            both classroom and field exercise segments.
      --Leadership courses.--These now include basic, intermediate or
            advanced Homeland Security classes including information about
            the Federal Response Plan, the Army's CBRNE role and leader
            skills required by the audience.
      --Primary Care courses.--Army medics are learning CBRNE first-
            responder skills. CBRNE training for physicians, nurses,
            physician assistants and dentists is part of officer basic
            training. ``Gold standard'' courses, such as the Medical
            Management of Chemical and Biological Casualties, and Medical
            Effects of Ionizing Radiation, are being incorporated into
            physician/physician assistant lifecycle training plans.
      --Postgraduate Professional Short Course Program (PPSCP).--These
            courses now embody course-specific CBRNE training, plus a Web-
            based ``Introduction to CBRNE'' review that is now a
            prerequisite for PPSCP enrollment. The interactive program is
            available at www.swankhealth.com/cbrne.htm. It provides both
            narration and text, with additional details available at the
            click of a mouse. It includes a history of CBRNE incidents, the
            nature of the terrorist threat, descriptions of agents and
            symptoms, a glossary of terms and links for additional
            information.
        Our AMEDD Center & School is also developing and disseminating
    exportable products, including emergency-room training materials; a
    SMART (Special Medical Augmentation Response Team) training package; a
    CBRNE mass-casualty exercise program for medical treatment facilities;
    ARTEP tests that embody CBRNE challenges; and proficiency testing
    materials.
        A three-day CBRNE Trainer/Controller course was held in San
    Antonio, Texas. It brought in 226 people from all Army medical
    treatment facilities--including caregivers and officials charged with
    planning emergency-response plans. The audience was schooled on both
    clinical aspects of managing CBRNE casualties and the organizational
    aspects of managing CBRNE mass-casualty emergencies. Attendees went
    home with materials they can use to deliver CBRNE instruction to their
    colleagues, guidance for developing CBRNE emergency plans that meet
    Joint Commission on Accreditation of Healthcare Organizations
    standards; and scenarios and evaluation guidelines for CBRNE exercises.
        Planners at the U.S. Army Medical Command have drafted formal
    guidance to medical treatment facilities for planning, training and
    preparing to support their installations, communities and regions
    during CBRNE incidents. They are aggressively pursuing links with other
    commands and civilian agencies to smooth the processes of
    communication, synchronization, coordination and integration needed to
    support the Federal Response Plan.
        We have organized Special Medical Augmentation Response Teams
    (SMART) to deliver a small number of highly-skilled specialists within
    hours to evaluate a situation, provide advice to local authorities and
    organize military resources to support response to a disaster or
    terrorist act. These teams, located at Medical Command regions and
    subordinate commands throughout the country, have critical expertise in
    nuclear, biological and chemical casualties; aeromedical isolation and
    evacuation; trauma and critical care; burn treatment; preventive
    medicine; medical command, control, communications and telemedicine
    systems; health facilities construction; veterinary support; stress
    management; and pastoral care.
        These teams are organized, equipped, trained and ready to deploy
    within 12 hours of notice. Their capabilities were demonstrated last
    year when seven members from Tripler Army Medical Center deployed from
    Hawaii to the Pacific island of Chuuk to assist residents injured
    during a typhoon.
        Last year patient decontamination equipment was fielded to 23
    medical treatment facilities with emergency rooms, and personnel have
    been trained in its use. With this equipment, up to 20 ambulatory
    patients an hour can be decontaminated. Another 33 MTFs will be
    similarly equipped during the current fiscal year.
        We also purchased 1,355 sets of personal protection equipment for
    emergency responders and SMART team members; and 11 chemical detector
    devices for selected medical centers and the SMART-NBC.
        We are partners with the Centers for Disease Control and Prevention
    in the Laboratory Response Network, which is augmenting a regional
    system of reference labs to quickly test and identify suspected
    pathogenic agents like anthrax. The AMEDD is designing seven high-
    containment Biosafety Level 3 labs--five in the continental United
    States, one in Hawaii and one in support of our Forces in Seoul, Korea.
    Construction is scheduled to begin in September.
        The U.S. Army Medical Research Institute of Infectious Diseases
    (USAMRIID) at Fort Detrick, Md., is a great national resource of
    expertise on dealing with dangerous diseases, whether natural outbreaks
    or the result of biological warfare. When anthrax-laced letters were
    sent through the mail in 2001, USAMRIID geared up for a phenomenal
    effort to analyze thousands of samples collected from possibly-exposed
    sites, looking for the deadly bacterium. They continue to assist law
    enforcement agencies attempting to identify the criminal responsible
    for these acts of terrorism.
        USAMRIID now is partnering with the National Institute of Allergy
    and Infectious Diseases (NIAID) at Fort Detrick on biodefense-related
    diagnostics, drugs and vaccine research. This effort will marshal
    research capabilities while leveraging resources in response to the
    nation's changing needs and builds on a long, productive relationship
    in collaborative research.
        Addressing these changing needs required additional research
    infrastructure. USAMRIID is planning to expand its current facilities
    and continue its mission of research on drugs, vaccines and diagnostics
    to safeguard the health of the nation's armed forces. NIAID is set to
    construct an integrated research laboratory to implement its
    complementary mission of conducting biodefense research to protect the
    public health. The new facilities will house biosafety laboratories
    comprised of Biosafety Level 2, 3 and 4 areas.
        USAMRIID and NIAID have been joined by representatives from the
    Department of Homeland Security, the Department of Agriculture and
    other federal agencies to lay the groundwork for an Interagency
    Biodefense Campus at Fort Detrick. The interagency campus takes
    advantage of existing infrastructure and security at Fort Detrick to
    promote potential sharing of facilities and leveraging of intellectual
    capital among federal researchers studying disease-causing microbes
    that may be used as agents of bioterrorism. Construction is expected to
    take place over the next several years.
        While all this is going on, we still have a mission of operating
    hospitals and clinics, providing day-to-day health care for our
    beneficiaries. Last year we began providing care under TRICARE For
    Life, and we are preparing for a new generation of TRICARE contracts.
        It seems one cannot open a newspaper or a magazine without reading
    about the soaring cost of health care; about the escalating malpractice
    crisis that is driving physicians to leave the practice of medicine;
    about the increasing cost shifting from employer to individual; about
    the restrictive practices that third-party payers impose to be able to
    profit and survive in this market.
        We in Army Medicine coexist in that world of health-care costs. But
    we continue to place our patients first, whether we are talking about
    families, retirees or soldiers on point. The ability to respond to
    warfighters, providing care from forward surgical teams to combat
    support hospitals, depends on the quality base of our direct-care
    system.
        We are in the era of accountability--for efficiency as well as
    outcomes and quality. We have adopted a business case approach to
    justifying requirements that has established credibility for our
    efforts.
        Metrics show improvement in medical board processing, operating-
    room backlogs and cancellation rates. Routine things like officer and
    NCO efficiency report timeliness; travel card payment and data quality
    show positive trends. Both Congress and the GAO have cited the AMEDD as
    a leader in health facility planning and lifecycle management.
        Recently we presented the second annual Excalibur Awards,
    recognizing excellent performance by AMEDD units and providing an
    opportunity to share information and stimulate improvements. The
    medical activity at Fort Hood, Texas; the AMEDD Center and School at
    Fort Sam Houston, Texas; the 82nd Airborne Division at Fort Bragg,
    N.C.; and the Kentucky Army National Guard's 1163rd Area Support
    Medical Company were recognized for initiatives in management of
    patients with resource-intensive medical conditions, use of satellite
    communications for extended learning, and innovative approaches to 91W
    training.
        I am confident that the restructuring of the new TRICARE contracts
    will lead to smoother business processes and better fiscal
    accountability across the Military Health System. The reduction in
    contract regions will have a direct effect on the portability issue, as
    will the national carve-out for pharmacy services. All of this is an
    important component of our ability to keep faith with the promise of
    health care for those serving and those who have served. But the
    TRICARE Contracts are only a component. The heart of our ability to
    project the right medical force with and for those we put in harm's way
    comes from our Direct Care base. The quality of the training programs,
    the focus on the unique community of soldiers with their world wide
    movement in support of our National Military Strategy, understanding
    unique stresses and strains on their families, the trust and confidence
    engendered by customer focused quality care is a force multiplier for
    the service member and the insurance for quality care on the
    battlefield. General Shinseki has established THE Army as our standard.
    It underscores the tremendous importance of our Reserve Components. The
    importance of the interplay with the direct care system of these Twice-
    the-Citizen Medical Soldiers cannot be overstated. The current tempo of
    this Global War on Terrorism could not be sustained without them. The
    continuity of our system with consistent care and in the familiar
    medical environment--``Institutional Continuity of Care'' even if their
    usual doctor is deployed is important and a constant in a disrupted
    life. It is our dedicated reservists who train to this mission, and to
    whom we turn to sustain the care and continue the quality of our
    training programs that are feeding the force for the next battles in
    this Global War on Terrorism.
        We looked closely at the lessons of Desert Storm and Desert Shield
    on the use of our Reserve medical force and have implemented 90-day
    rotation to minimize the impact on the home communities and to reduce
    the potential for unrecoverable financial hardships. We have made
    extensive use of Derivative Unit Identification codes that allow us to
    identify and only mobilize the exact skill sets that we need in the
    minimum numbers to sustain the mission and targeting them specifically
    to the location where they are needed. This is in contrast to the
    wholesale mobilization of these units and later sorting out where and
    how they might be best used. Many Medical professionals want the
    opportunity to serve their country. These policies and procedures will
    enable them to stay with us in the Reserves and contribute to this
    important mission.
        We appreciate the support from this committee to improve the
    medical readiness of the Reserve components and their families. The
    Federal Strategic Health Alliance (FEDS-Heal) program is improving our
    visibility of their health care needs and the potential for allowing
    dental care during the annual training periods using FEDS-Heal would be
    a step towards improved readiness.
        The level of quality, the ingenuity, the leadership of our
    noncommissioned officers, the flexibility and agility of leaders at all
    levels meeting the unique demands of each mission, tailoring the
    capabilities packages as missions demand--all make me proud of our
    AMEDD. It is the kind of ``quiet professionalism''--as it was described
    by a senior line commander--that will assure our success in supporting
    the force as we continue to root out terrorism.
        All that I have highlighted reinforces our integration into tenets
    of General Shinseki's transformation strategy. One can only speculate
    on what this new year of 2003 might bring--where we in the Army Medical
    Department might find ourselves committed around the globe. However,
    one can confidently predict that wherever we find ourselves, we will be
    caring for soldiers and soldiers' families with excellence and
    compassion.
        I would like to thank this Committee for your continued commitment
    and support to quality care for our soldiers and to the readiness of
    our medical forces.

    STATEMENT OF VICE ADMIRAL MICHAEL L. COWAN, SURGEON
                GENERAL OF THE NAVY
        Admiral Cowan. Thank you, Senator Inouye. I'm also pleased
    to be here to be able to share Navy medicine's activity and our
    plans for the future. At this time foremost on all of our minds
    is the U.S. global war on terrorism and military efforts in
    Iraq even as they wind down.
        As the men and women of the Navy and Marine Corps go in
    harm's way, I take special pride in the men and women of Navy
    medicine who are present with them on the front lines
    throughout the theater of operations and back home providing
    health protection.
        A Marine general eloquently summed all of this up by saying
    ``no Marine ever took a hill out of the sight of a Navy
    corpsman.'' As we move into this new millennium, we are likely
    to be continued to be challenged by a growing variety of
    worldwide contingencies. Deployable medical assets might have
    the capability to respond to various missions. Today we are
    more flexible than yesterday.
        Our new forward resuscitative surgical systems and the
    expeditionary fleet hospitals that General Peake alluded to in
    the Army have proven their unique life and limb saving value in
    Operation Iraqi Freedom. I have been unable to document a
    single case of anyone entering our health care system who is
    more than an hour between the time he was wounded in battle and
    first received resuscitative care.
        Our wounded patients at Bethesda tell me about these rapid
    response of the first responders tending to them instantly and
    timely, and of the lifesaving surgical care nearby. Further, it
    is not just casualty response that has improved.
        The net of environmental and weapons of mass destruction
    protection that surround our deployed forces is unparalleled in
    military history. Through military medical research and
    development programs, we continue to develop and to field new
    lifesaving products, practices and policies for the best of
    force health protection.
        As only one example, individual Marines deployed to Iraq
    were equipped with a new clotting accelerator called Quick
    Clot. It is a bandage that with one hand a wounded Marine can
    open and administer immediately and effectively stemming
    hemorrhage before the arrival of any health care professionals.
        Navy medicine cares not just for deployed sailors and
    Marines, but also for their families and our retired
    beneficiaries. All of these responsibilities are carried out
    through our mission of force health protection which consists
    of four key components. That is first fielding a healthy and
    fit force.
        Second, deploying them to protect against all possible
    hazards; third, providing world-class restorative care for
    sickness or injury on the battlefield, while at the same time
    caring for those who remain at home and providing health care
    for our retirees and their families.
        To serve these diverse needs, Navy medicine has made
    substantial investments to become family centered. We believe
    that promotion of the health and welfare of the entire family
    is paramount to the health of the service member.
        Furthermore, for active duty members and their families,
    health care is a key quality of life factor affecting both
    morale and retention, and that is why I say with no sense of
    irony that family centered services such as perinatal care--
    having a baby--are readiness and retention issues. One might
    think that combat support and having babies are worlds apart,
    but they are not. Our warriors love their families and cannot
    be distracted by unnecessary concerns for family's health.
        We understand that, and are dedicated to being there for
    all the health needs of the entire family. Accordingly,
    military medicine has moved away from being a system that
    provided periodic and reactive health care to one whose
    portfolio is invested in health promotion, disease prevention
    and family centered care. With our sister services and TRICARE
    partners, we are dedicated to meeting all the needs of all of
    our patients in every way.
        Finally, I would note that the global war on terrorism has
    been a watershed for military medicine, as well as for American
    medicine in general. The aftermath of the terrorist attacks of
    2001 have revealed that Americans are vulnerable in our
    homeland and that the very nature of threats against us has
    changed. We understand conventional violence. We now must
    understand chemical violence.
        We understand germs as disease. We now must understand
    germs as a weapon. We understand protecting our citizens by
    fighting our Nation's battles overseas, we now must understand
    protecting them in their own homes. Over the months and years
    to come, America's medical and public health infrastructures
    will evolve to become a defensive weapons systems in ways never
    before imagined.
        In partnership with the Nation's medical agencies, military
    medicine will play a vital part in that defensive shield
    against biological, radioactive, and chemical weapons and will
    serve our Nation well in these uncertain times. I'll end my
    opening remarks by saying I still wear the cloth of my Nation
    for 30 years and one of the reasons I do this is the privilege
    to associate with some of the finest men and women this Nation
    has ever produced.
        I was speaking to a corpsman in Bethesda, who lost his foot
    to a land mine while running to tend to a wounded Marine. When
    he appeared somewhat sad, he was consoled that certainly the
    loss of a foot would affect anyone that way, to which he
    responded, ``No, sir, that is just a foot. In fact, I have
    another one. What I'm worried about is that I do not know who's
    taking care of my Marines.''

                               PREPARED STATEMENT

        We can be proud of all of them, Army, Navy and Air Force as
    they serve in homeland and abroad and it is an honor to serve
    them. Thank you, sir. Thank you, Chairman Stevens.
        [The statement follows:]

              Prepared Statement of Vice Admiral Michael L. Cowan

        This has been a challenging and rewarding year for the Navy Medical
    Department. We have successfully responded to many challenges placed
    before us, and we continue to face a period of unprecedented change.
        For Navy Medicine, it meant changing our very being and even our
    motto from Charlie-Golf-One, which means in naval signal flag
    vernacular ``standing by, ready to assist'' to Charlie-Papa, ``steaming
    to assist,'' deploying with Sailors and Marines who will go in harm's
    way, taking care of the full spectrum of world events from peacemaking
    to major regional conflicts.
        It has been a decade of uncertainty, and what has emerged from the
    confusion and uncertainty is the ascendancy of enemies who know our
    military superiority, yet won't allow it to dampen their ardor to harm
    us and influence our power, prestige, economy, and values.
        Our enemies have struck with tools that are seemingly effective:
    global terrorism and asymmetrical warfare. During the years of the Cold
    War, America's paradigm was to train and prepare for war in safe
    homeland bases in our country that were protected by two large bodies
    of water. We defended the citizens of the United States by fighting our
    wars overseas. But these enemies have successfully brought the war to
    our backyard. Now the challenge is how to also protect the citizens of
    the United States in their own homes.

                            FORCE HEALTH PROTECTION

        The primary focus of Navy Medicine is Force Health Protection. We
    have moved from ``periodic episodic healthcare'' and the intervention
    and treatment of disease to population health and prevention and the
    maintenance and protection of health. This doesn't, however, change the
    physiological deterioration of the human body when pierced by a bullet.
    Medical support services are more essential than ever since those fewer
    numbers have greater responsibilities within the battle space. Take
    these complexities, and translate them into providing good medicine in
    bad places over great distances and the challenge become even more
    daunting. Yet one thing is certain--no organization in the world
    provides healthcare from the foxhole to the ivory tower the way Navy
    Medicine does.
        Force health protection can be summed up in four categories: First,
    preparing a healthy and fit force that can go anywhere and accomplish
    any mission that the defense of the nation requires of them. Second, go
    with them to protect our men and women in uniform from the hazards of
    the battlefield. Third, restore health, whenever protection fails,
    while also providing world-class health care for their families back
    home. And fourth, help a grateful nation thank our retired warriors
    with TRICARE for Life. Navy Medicine has to make all those things work;
    and they have to be in balance. Any one individual may only see a bit
    of this large and complex organization. But if each of us does our part
    right, we end up with force health protection.
        To ensure its ability to execute its force health protection
    mission under any circumstances, Navy Medicine has executed multiple
    initiatives to ensure optimal preparedness, which includes establishing
    a Navy Medicine Office of Homeland Security. The office is fully
    operational and has executed an aggressive strategic plan to ensure
    highest emergency preparedness in our military treatment facilities
    (MTF's). Its accomplishments include:
        Execution of an MTF Disaster Preparedness Assist Visit Program.--
    The Navy Medicine Office of Homeland Security crafted a multi-pronged
    assist visit program to strengthen preparedness in Navy MTFs. A team of
    homeland security experts is visiting each MTF between November 2002
    and April 2004 to conduct a unique program known as ``Disaster
    Preparedness, Vulnerability Analysis, Training and Exercise'' (DVATEX).
    Through this activity, each facility receives a hazard vulnerability
    analysis to identify where they may be vulnerable to attack or the
    impact of disaster, emergency medical response training, and an
    exercise of the hospital's emergency preparedness plan is executed--a
    critical step in enhancing readiness. This, and multiple other critical
    initiatives, were funded by a mid-year Congressional supplemental
    funding action.
        Enhanced Education for Medical Department Personnel.--Well-educated
    clinicians are a critical part of homeland security. Navy Medicine sent
    over 450 physicians, nurses and corpsmen to the ``gold standard''
    medical management of chemical and biological casualties training
    program at the U.S. Army Institute of Infectious Disease (USAMRIID). An
    extensive online training program for Navy Medical Department personnel
    on response to weapons of mass impact and emergency preparedness is in
    development at the Naval Medical Education and Training Command.
        Pharmacy Operations Emergency Preparedness.--A task force of Navy
    Medicine pharmacy experts is taking action to ensure strong emergency
    pharmacy operations and adequate stockpiles of critical medicines and
    antidotes.
        Smallpox Threat Mitigation.--Navy Medicine is leading 2 DOD
    Smallpox Emergency Response Teams (SERTs) and has executed the initial
    phase of the DOD smallpox immunization plan.

                        READINESS/CONTINGENCY OPERATIONS

        As we move into this new millennium, our Navy and Marine Corps men
    and women are called upon to respond to a greater variety of challenges
    worldwide. This means the readiness of our personnel is now more
    important than ever. Military readiness is directly impacted by Navy
    Medicine's ability to provide health protection and critical care to
    our Navy and Marine Corps forces, which are the front line protectors
    of our democracy. That's what military medicine is all about--keeping
    our forces fit to fight. Our readiness platforms include the two 1,000
    bed hospital ships, 6 Active Duty and 4 Reserve 500 Bed Fleet
    hospitals, as well as different medical units supporting Casualty
    Receiving and Treatment Ships (CRTS) and a variety of units assigned to
    augment the Marine Corps, and overseas hospitals. Navy medicine is more
    flexible now than we were even a few short years ago. Fleet hospitals
    have been modified to allow smaller and lighter expeditionary modules
    to be deployed. Yet even those are not flexible enough. Our combat
    planners are designing a more modular approach to enhance our
    operational capabilities. The ultimate goal is an ability to task and
    organize a medical force to rapidly provide support for the full range
    of potential military operations anywhere on the globe.
        I am very glad to report that the Next Generation 4/2 (DUAL SITE)
    Concept Fleet Hospital (FHSO) gained final approval in April 2002. The
    first ever-major Fleet Hospital reconfiguration and program change
    since the command's inception over 20 years ago, this achievement will
    provide a truly modular, plug and play hospital that will better meet
    the challenges of today and provide a bridge to the development of the
    ``Fleet Hospital of the Future''. This month we will begin building the
    first 4/2 concept hospital as part of the Integrated Logistics Overhaul
    (ILO) of Fleet Hospital NINE and will ultimately provide greater
    flexibility and operability to the Maritime Preposition Forces. In
    addition, a design for a small 10-bed Expeditionary Surgical Unit (ESU)
    with an even smaller 4-bed Surgical Component (SSC) is being developed.
    These new, smaller products have been imbedded into the recently
    approved Next Generation 4/2 Concept Fleet Hospital for less than
    $100,000, and provides Navy Medicine with a new response package to
    meet the new threat of asymmetrical warfare by providing between Level
    II and III care. Both the ESU and SSC are intended to provide the FH
    program with its first ever air-mobile asset and will serve as the
    foundation for providing humanitarian and disaster relief. The first of
    these products was implemented with the rebuild of FH08 EMF in
    September 2002.
        Last year, Navy medical personnel supported numerous joint service,
    Marine Corps, and Navy operations around the world. We flawlessly
    performed dozens of deployments supporting the war in Afghanistan, and
    in support of our national strategy, a fleet hospital still provides
    daily health care services to the Al Qaeda and Taliban detainees at
    Guantanamo Bay, Cuba. Our medical personnel have also provided
    preventive medical services, humanitarian care and relief to many
    countries around the globe.
        Over the last few weeks, thousands of Navy Medical Department
    personnel have deployed to the 1,000 bed hospital ship USNS Comfort, to
    three fleet hospitals (in their 116 bed Marine Expeditionary Force
    Configuration) and have augmented Navy and Marine Corps forces world
    wide, many of whom are deployed in forward areas.
        Navy Medicine will continue focusing on improved contingency
    flexibility in the field and afloat. Our medical care starts right in
    the midst of battle through the service and dedication of hospital
    corpsman. Navy Hospital Corpsmen have been awarded the Medal of Honor
    more often than any specialty in the Navy. Navy-Marine Corps history is
    filled with heroic acts performed by corpsmen to reach and retrieve
    wounded Marines. As the Marines deployed to Afghanistan and now to the
    Middle East, there are always hospital corpsman with them. The ratio
    can vary according to the mission, but the ratio is around 11 corpsmen
    per infantry company, which has between 120 and 130 Marines.
        Corpsman training includes surgically opening an obstructed airway,
    field dressing battle wounds, starting IVs, patching a lung-deep chest
    wound, treating battle injuries in an environment contaminated by
    chemical or biological weapons, and immobilizing spines of Marines
    whose backs are broken by explosions.
        Navy Medicine has also established training for combat surgical
    support to enhance the capabilities of the Forward Resuscitative
    Surgical System deployment by USMC. The cornerstone is the Navy Trauma
    Training Center at LA County/University of Southern California Medical
    Center, which convened its first class in August 2002 of physicians,
    nurses and hospital corpsman tasked with far forward surgery
    operational assignments. The program is projected to train
    approximately 120-150 students annually.
        In the 1991 Gulf War, our forward units moved so quickly into Iraq
    that it took an average of two hours to get a casualty to rear-guard
    medical facilities. Navy Medicine now has trauma doctors with the
    equivalent to a six-bed emergency room, as part of the Marine Corps'
    Combat Service Support Company, that follows the front lines on trucks
    and helicopters. Navy medicine will have trauma doctors available
    within 30 to 60 minutes of an injury, which reflects our persistent
    effort to push high quality medical care close to combat. The
    physicians staffing these units are combat doctors, who the Marines
    refer to as ``Devil Docs'' in reference to the nickname ``Devil Dogs''
    that the Marines earned in World War I. Its expected that the emergency
    and surgery teams will receive the 10 to 15 percent of casualties who
    will need immediate treatment to stay alive before they can be sent to
    more fully equipped echelon II or III facilities in the rear. These
    teams of two general surgeons, one anesthesiologist and five nurses and
    corpsmen can perform basic tests and can handle 18 casualties in 48
    hours without resupply from the rear. In just one hour, the team can
    pack up its two tents, one a holding area and the other a surgery room
    with operating lights, along with ultra-quiet power generators and X-
    ray and hand-held sonogram machines.
        As your aware one of our hospital ship, the USNS Comfort, deployed
    to the Persian Gulf on 6 January 2003, and is now being fully staffed
    to provide 1,000 hospital beds, 12 operating rooms, CAT Scan capability
    and advanced medical care equivalent to university medical centers.
    Yet, the Navy's first-response medical vessel for injured troops may be
    a gray hull and not the white USNS Comfort. At the tip of the spear are
    amphibious assault ships like the USS Tarawa. They launch Marines by
    helicopter and giant hovercraft, but also serve as Casualty and
    Treatment Receiving Ships (CTRS: secondary floating hospitals). The USS
    Tarawa, comes with four operating rooms and beds for 300 patients when
    Marines are ashore. The medical team manning the facility includes
    surgeons, neurologists, anesthesiologists, nurses and hospital
    corpsmen. They know how to treat nearly every battlefield trauma,
    including gunshot wounds and exposure to chemical and biological
    attacks. Their training also included the Navy's new hand-held ``Bio/
    Chemical Detection Devices. The detection devices can determine within
    minutes if Marines or sailors have been exposed to chemical agents, and
    identify the agents. Patients treated on-board are stabilized and
    transferred either to hospital ships or military hospitals in Europe or
    the United States.

                              PERSONNEL READINESS

        Navy Medicine tracks and evaluates overall medical readiness using
    the readiness of the platforms as well as the readiness of individual
    personnel assigned to those platforms. One of our measures of readiness
    is whether we have personnel with the appropriate specialty assigned to
    the proper billets; that is, do we have surgeons assigned to surgeon
    billets and operating room nurses assigned to operating room nurse
    billets, etc.
        The readiness of a platform also involves issues relating to
    equipment, supplies and unit training. Navy Medicine has developed a
    metric to measure the readiness of platforms using the Status of
    Resources and Training System (SORTS) concept tailored specifically to
    measure specific medical capabilities such as surgical care or
    humanitarian services. Using the SORTS concept, Navy Medicine has
    increased the readiness of 34 ``Tier 1'' deployment assets by 23
    percent.
        Navy Medicine also monitors the deployment readiness of individual
    personnel within the Navy Medical Department. Feeding the SORTS system
    is a program known as the Expeditionary Medical Program for
    Augmentation and Readiness Tracking System (EMPARTS), which Navy
    Medicine uses to monitor the deployment readiness of individual
    personnel and units within the Navy Medical Department. Personnel are
    required to be administratively ready and must meet individual training
    requirements such as shipboard fire fighting, fleet hospital
    orientation, etc. Individual personal compliance is tracked through
    EMPARTS.
        Augmentation requirements in support of the operational forces have
    significantly increased. Our Total Force Integration Plan utilizing
    both active and reserve inventories has greatly improved our ability to
    respond to these requirements. Navy Medicine's demonstrated commitment
    to supporting the full spectrum of operations is mirrored in our motto
    ``steaming to assist'' and is in full partnership with the Navy's
    ``Forward Deployed, Fully Engaged'' strategy.
        I also believe that in order to achieve Force Health Protection we
    need a metric for measuring the health readiness of our fighting
    forces. This measure must be beyond the traditional ``C-Status
    metric'', which lacks a true measure of one's health. Navy Medicine has
    developed a measure of individual health, which will also facilitate
    our measure of population health. Our model has been accepted by the
    Office of the Assistant Secretary of Defense, Health Affairs, and is
    being expanded for use by all the Services. A final version of the
    model and a Health Affairs policy memorandum is expected in a few
    weeks. In short, the model develops a metric that categorizes an
    individual's readiness status in one of four groups. The categories to
    be used include: Fully Medically Ready; Medically Ready with minor
    intervention; Unknown (i.e. no current evaluation or lost medical
    record) and Medically Not Ready. Each active duty member will fall into
    one of the four categories. The elements that will decide what category
    an individual falls into includes: Periodic health assessments, such as
    the physical exam, deployment limiting conditions, which include
    injuries, or long term illnesses, dental readiness using the same
    standards that have always been established, Immunization status and
    possibly vision evaluations and individual medical equipment like gas
    mask eye-glass inserts. The software needed to collect and track the
    data has already been developed and is compatible with current data
    systems. Readiness data can either be entered via SAMS (Shipboard
    automated medical system) or through our Navy Medicine on-line program.
    The information can also be stored in the DEERS database. Secure
    individual readiness data will therefore be available from SAMS, DEERS
    or Navy Medicine on-line. Reports will array data by command and drill
    down to an individual, and can be accessed by line leadership.
        I am also pleased to report that we recently implemented a new
    Reserve Utilization Plan (RUP) that has optimized our use of reservists
    during peacetime and contingencies. The Medical RUP is Navy Medicine's
    plan for full integration of Medical Reserves into the Navy Medical
    Department. The RUP is being currently used to support the allowed 50
    percent reserve augmentation of our deployed active duty staff and
    matches up reserve specialties with the needed services at each of our
    hospitals.

                                   OUR PEOPLE

        People are critical to accomplishing Navy Medicine's mission and
    one of the major goals from Navy Medicine's strategic plan is to
    enhance job satisfaction. We believe that retention is as important if
    not more so than recruiting, and in an effort to help retain our best
    people, there has been a lot of progress. Under our strategic plan's
    ``People'' theme, we will focus on retaining and attracting talented
    and motivated personnel and move to ensure our training is aligned with
    the Navy's mission and optimization of health. Their professional needs
    must be satisfied for Navy Medicine to be aligned and competitive.
    Their work environment must be challenging and supportive, providing
    clear objectives and valuing the contributions of all.
        All Navy Medicine personnel serving with the Marine Corps face
    unique personal and professional challenges. Not only must they master
    the art and science of a demanding style of warfare, but they must also
    learn the skills of an entirely separate branch of the armed services.
    Whether assigned to a Marine Division, a Force Service Support Group,
    or a Marine Air Wing, Navy medical personnel must know how Marines
    fight, the weapons they use, and the techniques used to employ them
    effectively against harsh resistance. To excel in this endeavor is an
    accomplishment that should be recognized on a level with other Navy
    warfare communities.
        As we work to meet the challenges of providing quality health care,
    while simultaneously improving access to care and implementing
    optimization, we have not forgotten the foundation of our health care--
    our providers. We appreciate and value our providers' irreplaceable
    role in achieving our vision of ``Navy Medicine being the provider of
    choice by achieving superior performance in health services and
    population health.''
        Within each of our medical facilities there has been an overall
    initiative to reward clinical excellence and productivity and to ensure
    that those who are contributing the most are receiving the recognition
    they deserve. Additionally, selection board precepts now emphasize
    clinical performance in the definition of those best and fully
    qualified for promotion.
        I would like to report to you on the status of our corps:
    Medical Corps
        The Medical Corps is currently manned at approximately 101 percent.
    This number is deceptive because there are several critical specialties
    in which undermanning is high and needs to be watched to avoid
    impacting our ability to meet wartime requirements and provide INCONUS
    casualty medical care: Anesthesia (82 percent manned), General Surgery
    (72 percent manned), Pathology (82 percent manned), Dermatology (83
    percent manned), Diagnostic Radiology (79 percent manned) and Radiation
    Oncology (80 percent manned). Because the average loss of providers
    exceeds the currently programmed input, shortages are expected in
    fiscal year 2005 in Anesthesiology, General Surgery and its
    subspecialties, Urology, Pathology, Radiology, Gastroenterology, and
    Pulmonary/Critical Care. We are also monitoring specialties in which
    we're currently overmanned. Because of the nature of medical training,
    it can take from 8 to 12 years to train a medical specialist. Various
    training and accession programs feed that pipeline and loss rates are
    often hard to project. We have improved our management oversight of
    those communities and will continue to seek improved means of meeting
    end-strength goals.
        In order to compete in the marketplace for a limited pool of
    qualified applicants for medical programs, and to retain them once they
    have chosen the Navy as a career, adequate compensation is critical.
    The civilian-military pay gap that has always existed has increased
    steadily, which makes it almost impossible to recruit or retain
    physicians in these high demand specialties. Strategic increases in the
    use of Incentive Special Pay, Multiyear Specialty Pay and use of
    Critical Skills Retention Bonuses that correspond to the Navy's medical
    specialty shortages may help improve retention in these critically
    manned specialties.

    Dental Corps
        Despite continued efforts to improve dental corps retention, the
    annual loss rate between fiscal year 1997 and fiscal year 2002
    increased from 8.3 percent to 11.8 percent. Current projections for
    fiscal year 2003 predicts a 12.6 percent loss rate. These numbers
    represent higher actual and projected loss rates compared with similar
    data from last year. In addition, declining retention rates of junior
    officers has negatively impacted applications for residency training,
    which have dropped 16 percent over the last five years. The significant
    pay gap compared to the civilian market and the high debt load of our
    junior officers seem to be the primary reasons given by dental officers
    leaving the Navy.

    Nurse Corps
        Closely monitoring the national nursing shortage and increasing
    number of competitive civilian compensation packages, Navy Medicine
    continues to meet military and civilian recruiting goals and
    professional nursing requirements through diversified accession
    sources, pay incentives, graduate education and training programs, and
    retention initiatives that include quality of life and practice issues.
    Successful tools have been the Nurse Accession Bonus, Certified
    Registered Nurse Anesthetist Incentive Pay, Board Certification Pay,
    and Special Hire Authority; it is imperative that they are continued in
    the future years to meet our wartime and peacetime missions. In
    addition, clinical and patient care needs are continuously evaluated to
    target our education and training opportunities in support of specific
    nursing specialties, such as advanced practice nurses, nurse
    anesthetists, nurse midwives, and perioperative nurses. Over the past
    2-3 years, CRNAs have been successfully retained in the Navy, creating
    a consistent fill of available billets based on a variety of factors.
    The combination of special pays (Incentive Specialty Pay and Board
    Certification Pay), lifting of practice limitations, and a focus on
    quality of life issues have been the major factors for this success.
    The most recent Critical Skills Retention Bonus has had a positive
    influence on CRNAs staying beyond their obligated service period.

    Medical Service Corps
        Medical Service Corps (MSC) loss rates in general are relatively
    stable at about 8.5 percent, but as with the rest of the Navy, were
    lower than that in fiscal year 2002 (6 percent). Loss rates vary
    significantly between specialties however, and are not acceptable in
    all MSC professions. A key issue for this Corps is increasing
    educational requirements and costs. Many of our health professionals
    incur high educational debts prior to commissioning. Recent increases
    in loan repayment requirements causes issues for many junior level
    officers trying to repay their education loans. Additionally, the
    increasing number of doctoral and masters level requirements for the
    various healthcare professions is beginning to put a strain on the
    Defense Officer Personnel Management Act (DOPMA) promotion constraints
    for this Corps, an issue we will be monitoring. Currently our critical
    specialties to recruit and retain are optometry, pharmacy, clinical
    psychology, social work, entomology, and microbiology. When funded, we
    expect the new pharmacy and optometry special pays to help our
    retention in those two communities. Further we have begun using the
    Health Profession Loan Repayment Program for some specialties and are
    having success with it.

    Hospital Corps
        Within the Hospital Corps, we are currently under-manned, defined
    as being below 75 percent, in seven Navy Enlisted Classifications
    (NECs). In the operational forces, USMC reconnaissance corpsman are
    currently manned at 53.8 percent. In the MTFs, cardio-pulmonary
    technicians are staffed at 74.3 percent, occupational therapy
    technicians 63.2 percent, bio-medical repair technicians 66.3 percent,
    psychiatric technicians 72.4 percent, morticians 50 percent and
    respiratory technicians at 73.5 percent. In the Dental technician
    community, we are currently under-manned in the dental hygiene
    community at 63.1 percent. An enlistment bonus for hospital corpsman
    and dental technicians would assist in competition with the civilian
    job market.

                Medical Special Pays
        The primary mission of the Military Health System (MHS) is Force
    Health Protection. This readiness focus involves programs to ensure we
    maintain a healthy and fit force, providing medical care in combat. The
    MHS also has an important peace time mission of providing health
    services to active duty members and other beneficiaries. In order to
    provide these services, the MHS must retain health providers that are
    dedicated, competent and readiness trained. This challenge is
    particularly difficult because uniformed health professionals are
    costly to accession, train, and are in high demand in the private
    sector.
        It's essential for the MHS to maintain the right professionals, the
    right skill mix and the right years of experience to fulfill our
    readiness requirements. Continued military service is not only based on
    pay, but also the conditions and nature of the work. Yet, adequate
    compensation must be provided. One of the major tools used to retain
    providers are special and incentive pay bonuses.
        National Defense Authorization Act of fiscal year 2003 (NDAA 03)
    set new upper limits for specific medical pays. Where as this act
    delineates the dollar limits at which pays may be paid; it leaves the
    administration of these pays to the Assistant Secretary of Defense for
    Health Affairs and the Services. The administrative policy for special
    pays is accomplished through a tri-service effort where specific
    manpower needs for each service and community pay is evaluated and
    applied to an annual tri-service pay plan. It is this pay plan that
    determines at what pay levels will be paid for specific specialties at
    any given time. Currently there have been no decisions or budgetary
    inputs to provide for any increase in these pays for fiscal year 2003
    or fiscal year 2004.
        Workgroups both within each service and as a tri-service collective
    are examining the application of special pays to include increases
    utilizing the new upper pay caps. However, it is too early to comment
    on possible applications.

              UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SCIENCES

        As the Executive Agent of the Uniformed Services University of the
    Health Sciences (USUHS), I would like to comment on the extraordinary
    achievements of the University in 2002. USUHS granted 163 Medical
    Degrees for a current total of 3,268 uniformed physician graduates
    since the first USUHS graduation in 1980. USUHS graduates, with
    retention averaging twenty years of active duty service, now represent
    over 22 percent of the total physician officers on active duty in the
    Armed Forces. And, as provided to the Congress during 2002, the median
    length of non-obligated service for physician specialists in the
    Military Health System, not including USUHS graduates, is 2.9 years;
    however, the median length of non-obligated service for USUHS graduates
    is 9 years. Thus, USUHS graduates are exceeding the original
    expectations of Congress when the university was established, thus
    ensuring physician continuity and leadership for the military health
    care system. In addition, a total of 183 Masters of Science in Nursing
    Degrees have been granted since the establishment of the USUHS Graduate
    School of Nursing in 1993; and, 728 Doctoral and Masters Degrees have
    been granted through the USUHS School of Medicine Graduate Education
    Programs.
        The military unique curricula and programs of the Uniformed
    Services University, successfully grounded in a multi-Service
    environment, draw upon lessons learned during past and present-day
    combat and casualty care to produce career-oriented physicians,
    advanced practice nurses, and scientists with military unique
    expertise. The USUHS-unique training centered in preventive medicine
    and combat-related health care is essential to providing superior force
    health protection and improving the quality of life for our service
    members, retirees, and families. USUHS also provides a significant
    national service through its continuing medical education courses for
    military physicians in combat casualty care, tropical medicine, combat
    stress, disaster medicine, and the medical responses to weapons of mass
    destruction (WMD).
        Four USUHS activities, internationally recognized by the emergency
    responder and health care communities, stand by ready to provide cost-
    effective, quality-assured WMD-related training and consultation. The
    Casualty Care Research Center; the Center for Disaster and Humanitarian
    Assistance Medicine; the Center for the Study of Traumatic Stress; and,
    the Armed Forces Radiobiology Research Institute have established
    credibility in providing military unique expertise covering four areas
    of WMD-related concerns: (1) the preparation of emergency responder
    communities; (2) ensuring communication and assessment of military
    medical humanitarian assistance training; (3) addressing traumatic
    stress of both civilian and uniformed communities during WMD-related
    incidents; and, (4) the development of medical radiological
    countermeasures to include the provision of unique training for the
    response to radiological emergencies.
        I am pleased to report that USUHS has begun collaborative efforts
    with the Department of Veterans Affairs on its WMD-related educational
    and training programs. As directed by H.R. 3253, The Department of
    Veterans Affairs Emergency Preparedness Act, Public Law 107-287, VA
    education and training programs on medical responses to terrorist
    activities, shall be modeled after programs established at USUHS. The
    cost-effective provision of quality-assured, web-based training and
    expertise for the medical response to WMD for the emergency and health
    care provider communities is ready to be transmitted from the USUHS
    Simulation Center located in Forest Glen, Maryland. I look forward to
    the further development of these collaborative efforts and the future
    contributions of USUHS.

       ESTABLISHMENT OF THE NAVAL MEDICAL EDUCATION AND TRAINING COMMAND

        The Naval Medical Education and Training Command (NMETC) was
    established under the command of a Flag Officer, as a result of BUMED
    realignment activities. NMETC is going to be a central source of
    learning that will act as a catalyst for web based education and
    training initiates available to our staff on a world wide basis. The
    Command's mission also dovetails well with CNO's Task Force Excel (TFE)
    initiative, whose cornerstone is the stand up of primary organizations
    with responsibility for training, education, human performance/
    development, and alignment of resources and requirements. Current Navy
    Medicine training staff is conducting a gap analysis between NMETC key
    functions, and those functions envisioned in CNO's training commands,
    in collaboration with TFE staff.

                              FAMILY CENTERED CARE

        Our health system must remain flexible as we incorporate new
    technologies and advances in medical practice, struggle to maintain our
    facilities, optimize our health care delivery, embrace new health
    benefits, enhance patient safety, and increase our ability to provide
    care to beneficiaries over age 65 in the coming months. Navy Medicine
    has been working tirelessly to maintain our superior health services in
    order to keep our service members healthy and fit and ready to deploy
    while providing a high quality health benefit to all our beneficiaries.
    As you know, healthcare is an especially important benefit to service
    members, retirees and family members. It is an important recruitment
    and retention tool. For active duty members and their families it's one
    of the key quality of life factors affecting both morale and retention.
    A deployed service member who is secure in the knowledge that his or
    her family's healthcare needs are being met is without question, more
    effective in carrying out the mission. Additionally, the benefits
    afforded to retirees are viewed by all as an indicator of the extent to
    which we honor our commitments.
        I'm proud of the cultural transformation Navy medicine has
    undertaken in support of Family Centered Care. Our patients, our Navy
    leadership, and Navy medicine understand that if we want to evolve
    beyond being a reactive health care system--with periodic, episodic,
    reactive healthcare--we have to make our customers partners in their
    care. Our goal is to be a proactive health system with the achievement
    of unprecedented levels of population health, the ultimate measure of
    our success. But we can't get there if patients aren't comfortable with
    their healthcare. We can't achieve higher states of health without
    individuals being actively involved in the process. Navy medicine has
    made a commitment to the cultural transformation. We are working every
    day towards being patient-centric.
        We have placed particular emphasis on achieving customer
    satisfaction with our perinatal services. Delivering babies is a very
    important component of our force health protection. It is one of the
    richest opportunities we have to affect health behaviors, and for
    building strong families from the beginning. What better opportunity is
    there to interest our Sailors and Marines in their health than when
    they are creating a family? The Navy's Family Centered Care (FCC)
    program promotes practices that enhance patient safety, health, cost
    efficiency, and patient and staff satisfaction. Elements of the FCC
    program were derived directly from patient and staff responses to
    multiple survey instruments and convenience samples. During 2002, Navy
    Medicine demonstrated its commitment to patient-centered care by
    investing $10.2 million in the FCC program. MTFs were able to upgrade
    equipment and furniture and received enhanced maternal-infant safety
    and patient-centered care training. Our accomplishments include a Tri-
    service effort to develop a uniform Family Centered Care program. We
    have collaborated with Army and Air Force Medical departments to
    develop coordinated plans since February 2002. We have also increased
    the availability of private post-partum rooms in Navy MTFs by 52
    percent from 2001, while simultaneously increasing provider continuity
    for prenatal visits to at least 75 percent in those MTFs not affected
    by the current OPTEMPO. We have deployed the DOD developed Interactive
    Customer Evaluation (ICE) system to monitor patient satisfaction with
    the FCC program and have established partnerships between the BUMED
    Perinatal Advisory Board, Health Services Organizations, and the BUMED
    Inspector General to assist in implementing and monitoring of the FCC
    program.
        We have standardized and enhanced prenatal education in all MTFs
    through the purchase of the USAF developed Spring Garden interactive
    education material and have contracted with a nationally recognized
    expert on Single Room Maternity Care to provide consultative services
    at MTFs undergoing the construction of Labor, Delivery, Recovery and
    Postpartum units. We are ensuring that MTFs review and revise policies
    to include family members at prenatal visits and at the delivery and
    are currently implementing the DOD/VA Clinical Practice Guideline for
    Uncomplicated Pregnancy in Navy MTFs.
        Finally, we have funded, filmed, and distributed marketing video
    spots, introducing patients to the Navy's Family Centered Care program.

    Optimization
        Readiness, must be supported by integration and optimization
    forming what I refer to as the ``ROI concept''--Readiness, integration
    and optimization. ROI is simply our effort to be good business people.
    Our optimization efforts have met with good success and led to more
    integration in our military health system. We work with our sister
    services very closely, both within the health care system, and
    operationally. We are all utterly dependent on one another for our
    mutual success. Nothing of any significance is done alone. Further, we
    have increased our integration and cooperation in other areas. A prime
    example is our continued efforts to build mutually advantageous health
    care and business relationships with the Department of Veterans
    Affairs.
        There is no more important effort in military medicine today than
    implementing the MHS Optimization Plan to provide the most
    comprehensive health services to our Sailors, Marines and other
    beneficiaries. Optimization is based upon the pillar of readiness as
    our central mission and primary focus.
        For several years now, we have attempted to shift our mindset from
    treating illnesses to managing the health of our patients. Fewer man-
    hours will be lost due to treatment of injury or illness because we
    manage the health of our service men and women, which keeps them fit
    and ready for duty. With this in mind, TRICARE Management Activity and
    the three services created an aggressive plan to support development of
    a high performance comprehensive and integrated health services
    delivery system. We took lessons learned from the best practices of
    both military and civilian health plans. The outcome was the MHS
    Optimization Plan. Full implementation of this plan will result in a
    higher quality, more cost effective health service delivery system.
        The MHS Optimization Plan is based on three tenets. First, we must
    make effective use of readiness-required personnel and equipment to
    support the peacetime health care delivery mission. Second, we must
    equitably align our resources to provide as much health service
    delivery as possible in the most cost-effective manner--within our
    MTFs. And third, we must use the best, evidence-based clinical
    practices and a population health approach to ensure consistently
    superior quality of services.
        During the last year, we accomplished a lot, both locally and at an
    enterprise level by focusing on concept education, primary care
    management techniques, clinic productivity standards, administrative
    health plan management and best practice integration. Accomplishments
    include:

    Clinical Advisory Boards
    Clinical Practice Guidelines
    Primary Care Manager By Name implementation
    Patient Safety Initiative
    Population Heath Improvement Plan and Tools
    Population Health Navigator
    Primary Care Optimization Model
    Optimization Report Care
    TRICARE On-line
    Clinic Business Reengineering
    Provider Support Staff and Exam Rooms
    Clinic Management Course
    Access monitoring
    Appointment Standardization
    Data Quality Initiatives
    Transition to New DEERS
    Medical Record Control
    Pharmacy Profiling
    Fleet Liaison Instruction
    Policy Statement to Reward Clinical Excellence

        Our Optimization funding has allowed us to pursue investment
    opportunities designed to achieve an ``Order of Magnitude Change''
    within Navy Medicine Treatment Facilities. Over 140 field proposals
    underwent a rigorous review; those demonstrating the most significant
    Return on Investment (ROI) are being implemented:
      --Musculoskeletal initiatives at 4 sites
      --Mental Health initiative at 1 site
      --Primary Care initiatives at 4 sites
      --Pharmacy initiatives at 4 sites
      --E-Health /TRICARE On-Line
      --Webification of Navy Medicine
      --Population Health Navigator/Primary Care Optimization Model
      --Clinic Manager Course
      --Radiology Residency--NMC Portsmouth
      --Birth Product Line Expansion at 2 sites
      --Virtual Colonoscopy
      --Carido-thoracic Surgery at NMC Portsmouth
      --Sleep Lab Expansion at 3 Sites
      --Nurse Triage/Nurse Advise Line at 2 sites
      --Chile Health Center--NMC San Diego
      --Case Management Project

        The Optimization Fund projects are at various points in the
    approval, funding and implementation process. Implementation plans and
    outcome metrics will be monitored closely.
        Although many commands report numerous efforts to optimize or
    improve their facility, I am concerned that frequently these efforts
    are not tied to specific goals or objectives. This is where performance
    measurement comes in. Performance measurement provides focus and
    direction, ensures strategic alignment and serves as a progress report.
        In the Navy, we are making available comparative performance data
    on all facilities--so MTF commanders can see where they stand and learn
    from each others' successes. Ultimately, it allows us to raise the bar
    for the whole organization.
        We have already made adjustments to our measures and have found
    that many of the measures have data that only changes once a year. This
    may be fine to measure how well we are doing in moving towards some of
    our strategic goals, but they are not adequate by themselves to manage
    the complexity of the Navy Medical department. This year we've added
    more ``levels'' to our metrics. One is a group of Annual Plan measures.
    After reviewing our strategic plan in light of the current environment,
    understanding the strengths, weaknesses, opportunities, and threats to
    our organization, we identified several priorities for the year. We
    then identified measures to track progress on these items--and this
    data has to be measurable at least quarterly. Finally, we have added
    more measures for our ``Dashboard of Leading Indicators'' that our
    leadership will be looking at on a monthly basis. Once we look at the
    historical data for these dashboard indicators, we will be setting not
    only targets for where we want to be but also action triggers in case
    we are going the wrong direction in some area. We will agree on a level
    below which, we will no longer just watch and see if it improves, but
    we will take action to change the processes. We in the Navy have web
    based our Optimization Report Card and the satisfaction survey data is
    provided to MTF commanders in a more user friendly display on a
    quarterly basis. As we continue to improve our performance
    measurements, we will begin to identify targets for our system and for
    each MTF. Holding MTF CO's accountable for meeting those targets will
    be the next step in this evolution.

                       NAVY MEDICINE/DVA RESOURCE SHARING

        As I mentioned, VA resource sharing is part of our optimization
    program. Collaboration between the Veterans Affairs and Navy Medicine
    is an important way to enhance service to our beneficiaries and
    veterans. Navy Medicine is an active participant in the DOD/VA
    Executive Council working to establish a high-level program of DOD/VA
    cooperation and coordination in a joint effort to reduce cost and
    improve health care for veterans, active duty military personnel,
    retirees and family members. The Executive Council is made up of senior
    DOD and VA healthcare executives and has established seven workgroups
    to focus on specific policy areas. Navy Medicine participates on three
    of the workgroups (Benefit Coordination, Financial Management and Joint
    Facility Utilization/Resource Sharing). The Presidential Task Force to
    Improve Health Care Delivery to our Nation's Veteran's meets monthly
    and representatives from BUMED attend every meeting as well as members
    from the VA and other Services. To date, BUMED currently manages 193
    sharing agreements with the VA and provides resource sharing with the
    VA on over 2,800 individual healthcare line items. We have also
    established a new BUMED/VA web site, which will provide our commands an
    overview of joint sharing ventures and updates on local command
    initiatives. It's essential that our Commanding Officers pursue VA
    sharing initiatives in their daily business activities. Specific Navy/
    VA Joint Ventures and other MTF agreements initiatives include:
      --NH Great Lakes and the North Chicago VAMC have reached agreement on
            forming a joint North Chicago Ambulatory Healthcare system
            which will support the mission at Naval Training Center (NTC),
            Great Lakes with modern and efficient healthcare services.
      --The NMC Key West, Florida and VA Medical Center, Miami, Florida are
            sharing a new joint medical clinic that is staffed by VA and
            Navy providers.
      --NH Corpus Christi and the VA have also signed an agreement to share
            surgical services and various ambulatory care services.
      --In Guam, the VA Outpatient Clinic is collocated at USNH GUAM; Navy
            is considered the primary inpatient facility for veterans.
      --NH Pensacola has several VA/DOD agreements in place and is working
            to establish additional agreements: Current agreements include:
            Emergency Room Services, Inpatient services, OB services and
            Orthopedic services, Lab and Radiology Services, Active Duty
            physicals and Mental Health Services. Options are also under
            review for new shared ambulatory healthcare settings.
      --NMC San Diego and NH Cherry Point are working with the VA to
            establish a Joint Community Based Outpatient Clinic (CBOC).
      --NH Lemoore is negotiating a new sharing agreement with the VA in
            Fresno, California to replace a recently expired agreement.
      --Agreements under development include: Corry Station--a combined
            DOD/VA Outpatient Clinic. A project workbook has been started
            and discussions continue. A site location has not been
            determined at this time.
        The Consolidated Mail Outpatient Pharmacy (CMOP) Pilot Program is
    also providing promising results. The purpose of the CMOP pilot is to
    evaluate the impact and feasibility of shifting some of the DOD
    prescription refill workload from MTF pharmacies to VA CMOPs while
    maintaining quality service to DOD beneficiaries. VA and DOD have made
    important progress in their efforts to conduct a DOD/VA CMOP pilot for
    evaluating the merits of using CMOPs MHS wide. Timelines and metrics
    have been established, pilot sites have been selected, and the
    interfaces are developed and are being tested. A Navy pilot site is at
    the Naval Medical Center San Diego.

                              E-HEALTH TECHNOLOGY

        The Internet has dramatically changed the way we live and do our
    business in ways totally unforeseen even as recently as ten years ago.
    This is especially true in Medicine where the Internet offers the
    opportunity to extend healthcare access, services, and education to
    improve the care we provide our patients. Online services and
    information offer patients the ability to take control of their
    healthcare and partner with their healthcare provider to stay healthy.
        In Navy Medicine, we have recognized the enormous potential of the
    Internet, both in healthcare services and in accomplishing our mission.
    We want to move from reactive interventional healthcare, waiting for
    people to get sick before we intervene, to more proactive Force Health
    Protection where we identify the most common causes of illness and
    injury in our patients and then aggressively act to prevent those
    things through good preventive services and education. We realize we
    cannot achieve this vision if our patients have to come to the hospital
    for those services. As a result, we look to the internet to help us
    extend healthcare services, access, and education outside the hospital
    in a convenient, easily accessed manner.
        We also realize that the internet can help us extend healthcare
    services to remote areas where specialty care has historically required
    medically evacuating patients. Finally, we also realize that the
    internet can be a valuable tool to help us support our operational
    commanders while concurrently improving our internal efficiency and
    effectiveness.
        These four goals, (1) extending healthcare services outside our
    hospital to help move us to proactive Force Health Protection, (2)
    extend healthcare services to the patient, regardless of location, (3)
    improve support to operational commanders, and (4) improve our internal
    efficiency and effectiveness comprise the four main goals of Navy
    Medicine's e-health initiatives.
        There are three initiatives I would like to highlight to
    demonstrate our progress in this area:
      --TRICARE OnLine.--This is the MHS new healthcare portal. A
            revolutionary concept, it allows our patients to go online,
            create an account, and access customizeable personalized
            healthcare information for their specific needs. They can also
            create an online healthcare journal for their healthcare
            providers to use and to help them track their health. There are
            no comparable services in the civilian sector and it represents
            the very hard work of a dedicated staff who took this from
            concept to widespread deployment in less than two years. Navy
            Medicine is partnering with TRICARE OnLine to share
            applications, jointly develop new applications, and ensure
            interoperability for new innovations in the future.
      --RADWORKS.--Radiology is increasingly important in the rapid
            diagnosis and treatment of patients. Rapid access to radiology
            expertise is critical to getting the best and quickest care for
            our patients. Since we cannot have radiologists everywhere, we
            are leveraging digital radiography over the web to provide this
            service. We recently completed installation of this technology
            onboard USNS COMFORT for use in supporting optimal care and
            disposition of any casualties. Our patients will have immediate
            access to the best radiologic support quickly regardless of
            their location anywhere in the world.
      --Smallpox Tracking System.--With the threat of smallpox, it is
            critical for us to both immunize the force and provide our
            commanders with as near a real time view of their immunization
            status as possible. Previous reporting used to be paper-based,
            was very labor-intensive, and was almost always out of date
            when received. We did smallpox immunization tracking
            differently. Within two weeks of program start, a dedicated
            Navy Medicine web team developed and implemented a real time
            web-based tracking system that allowed us to provide, on a
            daily basis, real time immunization reports to line commanders
            for their use. This was subsequently upgraded to a more robust
            system in use today. Navy Medicine responded quickly and
            effectively to the needs of our commanders and the support we
            needed to give to keep our Sailors and Marines healthy and
            ready to go.
        The bottom line is that Navy Medicine is at the vanguard of
    leveraging the net and emerging web-based technologies to improve our
    healthcare services, better support our operational commanders, and
    ensure our Sailors, Marines, family members, and retirees receive the
    very best care possible anywhere, at any time.

                                MEDICAL RESEARCH

        Navy Medicine also has a proud history of incredible medical
    research successes from our CONUS and OCONUS laboratories. Our research
    achievements have been published in professional journals, received
    patents and have been sought out by industry as partnering
    opportunities.
        The quality and dedication of the Navy's biomedical R&D community
    was exemplified this year as Navy researchers were selected to receive
    prestigious awards for their work. CAPT Daniel Carucci, MC, USN
    received the American Medical Association's Award for Excellence in
    Medical Research for his work on cutting edge DNA vaccines. His work
    could lead to the development of other DNA-based vaccines to battle a
    host of infectious diseases such as dengue, tuberculosis, and
    biological warfare threats. Considering the treat of Biological
    terrorism, DNA vaccine-based technologies have been at the forefront of
    ``agile'' and non-traditional vaccine development efforts and have been
    termed ``revolutionary''. Instead of delivering the foreign material,
    DNA vaccines deliver the genetic code for that material directly to
    host cells. The host cells then take up the DNA and using host cellular
    machinery produce the foreign material. The host immune system then
    produces an immune response directed against that foreign material.
        In the last year, Navy human clinical trials involving well over
    300 volunteers have demonstrated that DNA vaccines are safe, well-
    tolerated and are capable of generating humoral and cellular immune
    responses. DNA vaccines have been shown to protect rodents, rabbits,
    chickens, cattle and monkeys against a variety of pathogens including
    viruses, bacteria, parasites and toxins (tetantus toxin). Moreover
    recent studies have demonstrated that the potential of DNA vaccines can
    be further enhanced by improved vaccine formulations and delivery
    strategies such as non-DNA boosts (recombinant viruses, replicons, or,
    importantly, exposure to the targeted pathogen itself).
        A multi-agency Agile Vaccine Task Force (AVTF) comprised of
    government (DOD, FDA, NIH), academic and industry representatives is
    being established to expedite research of the Navy Agile Vaccine.
        As other examples of scientific achievement, Navy Medicine is
    developing new strategies for the treatment of radiation illness. Navy
    Adult Stem Cell Research is making great strides in addressing the
    medical needs of patients with radiation illness. The terrorist attacks
    of 2001 identified the threat of weapons of mass destruction, to
    potentially expose large numbers of people to ionizing radiation.
    Radiation exposure results in immune system suppression and bone marrow
    loss. Currently, a bone marrow transplant is the only life saving
    procedure available. Unfortunately, harvesting bone marrow is an
    expensive and limited process, requiring an available pool of donors.
        In the past year, NMRC researchers have developed and published a
    reproducible method to generate bone marrow stem cells in vitro after
    exposure to high dose radiation, such that these stem cells could be
    transplanted back into the individual, thereby providing life-saving
    bone marrow and immune system recovery. This is the type of technology
    that will be needed to save the lives of a large number of victims.
        In this same line of research, Navy Medicine is developing new
    strategies for the treatment of combat injuries. We are developing new
    therapies to ``educate'' the immune system to accept a transplanted
    organ--even mismatched organs. This field of research has demonstrated
    that new immune therapies can be applied to ``programming stem cells''
    and growing bone marrow stem cells in the laboratory. The therapies
    under development have obvious multiple use potential for combat
    casualties and for cancer and genetic disease.
        Other achievements during this last year include further
    development of hand-held assays to identify biological warfare agents.
    During the anthrax attacks, the U.S. Navy analyzed over 15,000 samples
    for the presence of biological warfare (BW) agents. These hand-held
    detection devices were used in late 2001 to clear Senate, House and
    Supreme Court Office Buildings during the anthrax attacks and
    contributed significantly to maintaining the functions of our
    government. Some of the most important tools that are used to analyze
    samples for the presence of BW agents in the field are hand-held
    assays. The hand-held assays that are used by the DOD were all
    developed at Naval Medical Research Center (NMRC). Currently NMRC
    produces hand-held assays for the detection of 20 different BW agents.
    These hand-held assays are supplied to the U.S. Secret Service, FBI,
    Navy Environmental Preventive Medicine Units, U.S. Marine Corps, as
    well as various other clients. Since September 2001, NMRC has produced
    over 120,000 assays and has fielded approximately 23,000 assays. In
    addition to the in-house production, NMRC has also provided emergency
    production capacity of antibodies needed for DOD fielded bio-detection
    systems, including the hand-held assays produced by JPO/BD for DOD use.
    The hand-held Assays have recently been upgraded with Platinum
    detection systems which will be 10 to 100 times more sensitive than the
    current systems, depending on what agent is being identified.
        The Navy's OCONUS research laboratories are studying diseases at
    the very forefront of where our troops could be deployed during future
    contingencies. These laboratories are staffed with researchers who are
    developing new diagnostic tests, evaluating prevention and treatment
    strategies, and monitoring disease threats. One of the many successes
    from our three overseas labs is the use of new technology, which
    includes a Medical Data Surveillance System (MDSS).
        The goal of the MDSS is to provide enhanced medical threat
    detection through advanced analysis of routinely collected outpatient
    data in deployed situations. Originally designed to enable efficient
    reporting of DNBI statistics and rapid response of preventative
    medicine personnel, MDSS may also enable supply utilization tracking
    and serve as a method of detecting the presence of chemical and
    biological agents. MDSS is part of the Joint Medical Operations-
    Telemedicine Advanced Concept Technology Demonstration (JMOT-ACTD)
    program. Interfacing with the shipboard SAMS database system, MDSS
    employs signal detection and reconstruction methods to provide early
    detection of changes, trends, shifts, outliers, and bursts in syndrome
    and disease groups (via ICD-9 parsing) thereby signaling an event and
    allowing for early medical/tactical intervention. MDSS also interfaces
    with CHCS and is operational at the 121st Evacuation Hospital in South
    Korea, and is being deployed at the hospital and clinics at Camp
    Pendleton. Currently, MDSS may have an opportunity to collaborate with
    other industry and service-related efforts for the purpose of
    developing homeland defense-capable systems. Homeland defense
    initiatives are currently being coordinated through the Defense Threat
    Reduction Agency.

                                   CONCLUSION

        Navy Medicine has covered a lot of ground over the last year and we
    face the future with great enthusiasm and hope. The business
    initiatives, along with new technical advances join to make our Navy
    Medical Department a progressive organization. I thank you for your
    continued support and in making the military health care benefit the
    envy of other medical plans. You have provided our service members,
    retirees and family members a health benefit that they can be proud of.
        I think we have been extraordinarily successful over the years, and
    we have opportunities for continued success, both in the business of
    providing healthcare, and the mission to supporting deployed forces and
    protecting our citizens throughout the United States.
        We are one team, with one fight, and we are now in the middle of
    that fight. I am certain that we will prevail.

        Senator Stevens. Thank you very much. I apologize for being
    late. I had another meeting. John Taylor.

    STATEMENT OF LIEUTENANT GENERAL DR. GEORGE PEACH
                TAYLOR, JR., AIR FORCE SURGEON GENERAL
        General Taylor. Mr. Chairman, Senator, it is a pleasure to
    be here today for the first time. It is also my very great
    privilege to represent the Air Force Medical Service. They are
    dedicated to providing outstanding force protection to our
    Armed Services as they have so ably demonstrated over the last
    year and a half.
        The Air Force Medical Service brings important capabilities
    to support any operation or contingency as a key component of
    agile combat support to the Nation's Aerospace Expeditionary
    Forces (AEFs), our sister services and allied forces both
    abroad and at home.
        We have been transforming for many years. Since the first
    Gulf War, we have achieved improvement in every step of the
    deployment process from improving predeployment health to post
    deployment screening and counseling. We believe in a lifecycle
    approach to health care. It starts with accession and lasts as
    long as the member is in uniform, and beyond through the
    Department of Veterans Affairs.
        As we deploy, we are now seeing a more fit and healthy
    fighting force for which we have the best fitness and health
    data ever. And we know how to take care of them. Our medical
    personnel are more prepared than ever. Training such as our
    advanced trauma training and readiness skills verification
    program assure that our wartime skills are current.
        Expeditionary medicine has enabled us to move our medical
    forces forward very rapidly, as in the initial deployments
    during Operation Iraqi Freedom. The capabilities we bring to
    the fight today provide troops a level of care that was
    unimaginable just 10 years ago, capabilities that make us a
    lighter, smarter and a much faster medical service.
        Our preventive medicine teams go in on the very first
    planes into the theatre of operations. This small team of
    experts gives us vital food and water safety capabilities. They
    begin collecting vital water hazard data and provide basic
    primary care. In fact, during Iraqi Freedom, one of our
    environmental medicine flight personnel actually parachuted
    with the Army's 173rd Airborne Brigade as part of the Air
    Force's 86th contingency response group and the initial
    contingent deployed in a Northern Iraqi air base. This
    independent duty medical tech was later joined by five
    remaining members of the flight to provide on-scene
    environmental security and force protection at that location.

                      EXPEDITIONARY MEDICAL SUPPORT UNITS

        Our surgical units, lightweight, highly mobile
    Expeditionary Medical Support units, or EMEDs, can be on the
    ground within 3 to 5 hours. EMEDs are comprised of highly
    deployable medical teams that can range from large tented
    facilities to five-person teams with backpacks. These five
    person mobile field surgical teams or MFSTs, travel far forward
    with 70 pound backpacks. In them is enough medical equipment to
    perform 10 lifesaving surgeries anywhere, at any time, under
    any conditions.

                           OPERATION ENDURING FREEDOM

        During a 6-month rotation for Operation Enduring Freedom
    one of these mobile surgical teams performed 100 infield
    surgeries, 39 of those were for combat surgeries. And when our
    sick and injured must be removed from the theater and
    transported to definitive care, we have the state of the art
    medical air evacuation system.
        In fact, another major advance since the Gulf War is our
    ability to move large numbers of more critically injured
    patients. Our Critical Care Air Transport Teams tend to these
    very ill patients throughout the flight providing lifesaving
    intensive care in the air. Last year in support of Operation
    Enduring Freedom, we transported 1,352 patients through the air
    evac system of whom 128 were just such critically ill or
    injured patients. And for Iraqi Freedom, we performed over
    2,000 patient movements, 640 of those were people with combat
    injuries.
        And thanks to the Department of Defense (DOD) TRANSCOM
    Regulating and Command and Control Evacuation System
    (TRAC\2\ES), we were able to track each patient from the point
    of pickup to the point of delivery in real time.
        It is important to note that each of these new programs
    have been woven seamlessly into a joint medical capability.
    This joint service interoperability was demonstrated during the
    crash of an Apache helicopter last April in Afghanistan. The
    two pilots had massive facial and extremity fractures. The
    injured pilots were initially treated and moved by an Air Force
    pararescue member who had been delivered onsite by an Army
    Special Forces helicopter crew. The two were then stabilized by
    an Army surgical team, transferred to a C-130 and then air
    evacuated out on a C-17.
        In flight they were restabilized by one of our Air Force
    Critical Care Air Transport Teams and landed safely at a
    military base in the European theater to be cared for by a
    jointly staffed military regional medical center, and all this
    was done within 17 hours of the time they hit the mountain in
    Afghanistan. This is just one seemingly unbelievable but in
    fact increasingly routine example of our integrated medical
    operations.
        Together, the three medical services have built an
    interlocking system for care for every airman, soldier, sailor,
    Marine or Coast Guardsman in harm's way. We have fielded data-
    capture mechanisms to extend and enhance our force protection
    efforts. Using automated systems, we have documented and
    centrally stored almost 37,000 deployed medical patient medical
    records since 9-11, capturing almost 71,000 patient encounters.
    This is an update to what I told the House Armed Services
    Committee last week because it includes Operation Iraqi
    Freedom.
        We have tools in place to collect relevant environmental
    health data and are forwarding them for centralized analysis.
    This linkage between individual patient encounters and
    environmental data is absolutely critical to ongoing and future
    epidemiological studies. We are working hard with health
    affairs to ensure we maintain a solid, finely tuned deployment
    health surveillance system.
        In fact, the Air Force inspection agency assesses the
    deployment health surveillance program in each of our bases,
    active duty and Air Reserve Component, to ensure the quality of
    this vital program. And in the last 2 years, largely through
    their efforts and crosstalk, we have reduced significant
    discrepancies fourfold.

                                    TRICARE

        Another crucial element of protecting our troops is
    ensuring peace of mind of their families. We continue to work
    hard to optimize the care we provide in our facilities for more
    than 1 million TRICARE patients and 1.5 million TRICARE for
    Life patients.
        We are doing this in many ways by ensuring providers have
    support staff, that their processes are efficient, and that
    their buildings and equipment are adequate. We look forward to
    the next generation TRICARE contracts and are stepping forward
    in optimization for these. Both are structured to give more
    resources and more flexibility to our local commanders.

                            RECRUITING AND RETENTION

        After all, politics and health care ``is local''. The
    challenge we continue to face is medical professional
    recruiting and retention. I personally believe the solution is
    twofold. First, incentives such as loan repayment, accession
    bonuses, increased specialty care, and increased specialty pay
    are beginning to make a difference. And again, we appreciate
    your critical support.
        Secondly, I believe that optimization and facility
    improvement projects, those that I mentioned above, will create
    a first-class environment of care for our outstanding, well-
    trained and highly talented staffs.

                               PREPARED STATEMENT

        In conclusion, as we face the many challenges of our
    missions at home and abroad, your Air Force Medical Service
    remains committed to offering families quality, compassionate
    care and to supporting our troops as they protect and defend
    our great country. I thank you for your vital support, the
    support that you provide to your Air Force and to our families,
    and I look forward to your questions.
        [The statement follows:]

     Prepared Statement of Lieutenant General Dr. George Peach Taylor, Jr.

        Mr. Chairman and members of the committee, thank you for the
    opportunity to discuss with you some of the challenges and successes of
    the Air Force Medical Service, or the AFMS.
        As with all other aspects of the military, the AFMS is transforming
    itself.
        Transformation is a word that is being regularly used around
    Washington these days. To the Air Force, transformation is not just new
    technology, such as uninhabited combat aerial vehicles or space-based
    radars. Transformation is merging new technologies with new concepts of
    operations and new organizational structures.
        Think about the Air Force combat controllers on the ground in
    Afghanistan directing B-52s to drop directed-munitions within 500
    meters from their positions. This was accomplished by using global
    positioning satellites, laser range-finding devices, and new state-of-
    the-art munitions to provide a new kind of effect: enhanced close-air
    support, which proved to be pivotal in the fight with the Taliban. This
    success serves as an example of one of many progressive steps the Air
    Force is taking in its march toward Transformation.
        The Air Force Medical Service is no stranger to transformational
    changes. In many ways we lead the Air Force and like to say ``that we
    were transforming before transformation was cool.'' Our modular,
    lightweight medical and preventive medicine teams, same-day
    laparoscopic surgery, advanced imaging--among many other components--
    have changed the face of military medicine, from home base to
    battlefield.
        Our five Air Force Medical Service core competencies provide
    compelling lenses through which we view the transformational
    activities.
        I would like to briefly describe each core competency and share
    some of the exciting accomplishments we have achieved under each.
        Our first Air Force Medical Service's core competency is
    population-based health care. As the name indicates, population-based
    health care strives to keep our entire beneficiary population healthy
    by preventing disease and injury. But, if any do become sick or
    injured, our system will provide exceptional care.
        Our next core competency is human performance enhancement and
    sustainment. These include methods and equipment that protect our
    forces from harm and permit our troops to perform their missions
    better.
        Fixed wing aeromedical evacuation, our third core competency,
    addresses the innovative and life-saving ways we use aircraft to
    transport patients from the theater of operations to the nearest
    capable medical treatment facility.
        Our fourth core competency, medical care in contingencies, entails
    all the training, equipment, and logistics needed to provide care
    during humanitarian or combat operations.
        World health interface, our final core competency, recognizes the
    importance of interaction with other nations. Air Force medics are
    called to serve from Atlanta to Afghanistan, and from San Antonio to
    Sierra Leone. Therefore, we have institutionalized training programs
    that teach medics the language and customs of those countries in which
    they might be called to serve.
        These five core competencies are the heart and soul of the Air
    Force Medical Service. I would like to describe each in a bit more
    detail to better demonstrate to you the innovative ways in which the
    Air Force Medical Service is transforming itself.

    Population-Based Health Care
        The U.S. military health care system cares for 8.3 million people
    and costs $26 billion. This huge system is in every state and in
    numerous countries. Yet, as immense as this system is, I adhere to the
    philosophy that all health care is local.
        What matters most in medicine and dentistry is the care our
    patients receive from their provider. It is my mission--my passion--to
    ensure that every provider has the leadership, training, people,
    facility space, and medical equipment he or she requires to give those
    patients the care they need, the care they deserve. Our first core
    competency, population-based health care, is critical to ensuring this
    becomes a reality.
        We have transitioned from the old medical paradigm--treating sick
    people--to the new paradigm of preventing people from getting sick in
    the first place. The old way makes for better TV drama, but the new way
    makes for better medicine. This new paradigm is called population-based
    health care. The programs I will discuss support population-based
    health, especially how it applies to our active duty forces.
        Because of the global war on terrorism, there has never been
    greater imperative to have a military force that is fully ready to
    ``fly the mission.'' Our comprehensive Individual Medical Readiness
    program, ensures our military members are ``medically ready'' to
    perform.
        To help illustrate the Individual Medical Readiness program, I ask
    you to think of an aircraft--a new F/A-22 fighter, for instance. From
    the moment each aircraft enters our arsenal, it undergoes continuous
    monitoring, routine inspections, preventive maintenance, and if needed,
    repairs. These activities happen before, during, and after this weapon
    system is employed.
        A far more valuable resource--our airmen, the ``human weapons
    system''--receive that same level, if not more, of devoted care.
    Through our Individual Medical Readiness program, we constantly monitor
    the health of our airmen through inspections and preventative
    maintenance--called Preventive Health Assessments--and, if needed,
    repairs.
        The Individual Medical Readiness program has four main components,
    the first of which is the Preventive Health Assessment. At least once a
    year, we review the total health care needs and medical readiness
    status for every airman. During this appointment we make sure they have
    received all recommended and required preventive care, screenings,
    immunizations, and assessments. Preventive Health Assessments are the
    equivalent of the routine inspections and preventive maintenance
    provided to aircraft.
        Second, at each visit, whether in garrison or deployed, we take
    care of our troop's complaints, look for other preventive
    interventions, and ensure their fitness for duty.
        Third, we perform medical evaluations before and after troops
    deploy so that we can monitor the effect--if any--the deployments have
    on their health.
        Finally, we have created innovative new information systems
    designed to track all individual medical readiness and preventive
    health care requirements. It is called the Preventive Health Assessment
    Individual Medical Readiness program (PIMR).
        At the local level, PIMR can tell the medics which troops need
    blood tests, evaluations, or vaccines, who is healthy enough to be sent
    to the field, and who should remain behind until they are healthy. At
    the global level, PIMR provides leaders near real-time statistics that
    tell them what percent of their troops are medically fit to deploy.
    PIMR's metrics are also used to provide feedback and shape policies and
    programs so we can continually improve the readiness of our force.
        Population-Based Health Care is more than just the method to keep
    the active duty members healthy. It benefits all beneficiaries--active
    duty, their families, retirees and their families, and is our
    overarching model for healthcare. Our AFMS must accomplish three
    critical processes to ensure full-fledged Population-Base Health Care.
        First, care team optimization. An optimized primary care team, for
    example, has as its members a provider, nurse, two medical technicians,
    and one administrative technician. The team is provided the optimal
    number of exam rooms, medical equipment, and support staff needed to
    ensure that such things as facility constraints and administrative
    responsibilities do not hinder their ability to provide care to our
    airmen and their families. In such teams, our medical staff flourish.
        Where we have optimized our primary care clinics, we have enjoyed
    success. Based upon this success, the AFMS has embarked upon expanding
    this strategy. Soon, every clinical and non-clinical product line will
    undergo an expeditionary capability analysis, clinical currency
    analysis, and business case analysis to determine how best to optimize
    the use of our resources.
        In short, we have seen that optimization has great potential in the
    primary care setting, so now we hope to spread that success by
    optimizing specialty care. This year we will launch pilot programs for
    the optimization of orthopedics, general surgery, otolaryngology, OB/
    GYN, and ophthalmology.
        The result of optimization is clear: Our people are receiving
    outstanding healthcare delivered by highly trained teams.
        A second critical process of Population-Based Health is ``PCM by
    name.'' PCM stands for ``primary care manager.'' A PCM is a provider
    who takes active oversight in every aspect of a patient's care.
    Beneficiaries are assigned a ``PCM by name,'' meaning they will
    routinely see that same provider. Previously, beneficiaries would
    arrive at the clinic and frequently did not know who their provider
    would be that day. Now, through PCM by name, they are assigned to a PCM
    who will see the patient for all routine medical care. The PCM becomes
    much like a trusted, small-town family doctor who becomes intimately
    involved in the care of the patient and his or her family.
        We have over 1.2 million customers enrolled to our 74 medical
    locations--and 100 percent of those beneficiaries are enrolled to a PCM
    by name.
        The tandem success of the Optimization and Primary Care Manager by
    Name efforts are serving our TRICARE beneficiaries well. The Health
    Employee Data Information Set Standards--or HEDIS--are the civilian
    national standards by which most Managed Care Organizations are
    measured. Here is how HEDIS ranks some of our efforts compared to
    civilian commercial health care plans:
      --For providing timely cervical cancer screenings, the Air Force is
            in the top 10 percent of all health care plans in the United
            States.
      --For breast cancer screenings the Air Force surpasses 66 percent of
            commercial plans.
      --Our diabetic care program is in the top 9 percent of all similar
            plans nationwide.
        And, recently, the Air Force Medical Service was recognized by
    civilian experts at the Kilo Foundation as one of two U.S. health care
    organizations on the cutting edge of optimizing health care delivery--
    the other organization being Kaiser-Permanente.
        We optimized our care teams to deliver the best care, now we must
    also optimize the buildings in which our patients receive that care.
    Facility recapitalization is the third critical process that must be
    accomplished to support population-based health.
        Whether we are talking about the human body, aircraft, or
    buildings, the more each ages, the more they wear out, break down,
    creak and leak. They become more expensive to maintain. For that
    reason, the Defense Health Program currently supports the goal of
    medical facility recapitalization at a 50-year rate rather than the 67-
    year rate provided to other, non-health-care facilities.
        We use the funds we are provided annually to pay for necessary
    renovations, modernization, and replacement needs.
        Before I discuss our remaining AFMS core competencies, I will
    mention a few population-based health care items I find worthy of
    mention, one of which is our success in suicide prevention.
        Suicide is the most preventable cause of death, yet is the 11th
    leading cause of death in the United States. Among people of military
    age, it is the fourth leading cause of death behind accidents, cancer,
    and heart attacks.
        Fortunately, suicide among our Air Force members and their families
    is nearly the lowest it has been in 20 years.
        We teach our leadership, airmen, and family members how to
    recognize, assist, and intervene when they identify members who might
    be contemplating suicide. Our efforts are succeeding. Throughout the
    mid 1990s, there were over 14 Air Force suicides for every 100,000
    members. That number is now just 8.3 for every 100,000. We are striving
    hard--very hard--to lower it yet more. We recognize that we can never
    completely eradicate suicide, but every life saved is crucial to the
    Air Force. And the quality of life for all those who seek and receive
    care is immeasurably enhanced.
        Another important quality of life initiative is our focus on
    enhancing obstetrical care in our military treatment facilities for our
    patients. We are working very hard across the Air Force, and indeed
    DOD, to optimize our OB programs. We are increasing routine prenatal
    ultrasound capability, improving continuity of care with patients and
    OB providers, and enhancing OB facilities to provide more comfortable
    labor and delivery rooms.
        Preliminary findings from the specialty care optimization pilot at
    Nellis AFB, show increases in access to care, in patient-provider
    continuity, and an increase in mothers desiring to deliver their babies
    at Nellis. In the last year alone nearly 11,000 mothers-to-be visited
    our OB clinics for a total of 193,000 visits. Carrying through on these
    optimization efforts, we feel confident that when it is time for our OB
    patients to choose their provider, they will choose their local
    military treatment facility. They will choose us.
        Our optimization efforts throughout the Air Force Medical Service
    are complemented by partnerships with Department of Veterans Affairs
    clinics and hospitals. The DOD has seven joint venture programs with
    the VA; the Air Force oversees four of them at Travis, Elmendorf,
    Kirtland, and Nellis Air Force Base Hospitals.
        One of our most successful joint ventures is our first--Nellis Air
    Force Base's VA/DOD hospital. This joint venture replaced the outdated
    Nellis hospital and offered VA beneficiaries a local federal inpatient
    facility for the first time in the area's history. The facility enjoys
    a fully integrated Intensive Care Unit, operating suite, emergency
    room, post anesthesia care unit, and shared ancillary services.
        Kirtland's joint venture is also impressive. There, the joint
    venture has gone beyond the sharing of staff and facilities. At
    Kirtland, the Air Force and VA have created Joint Decontamination and
    Weapons of Mass Destruction Response Teams. Their teamwork will permit
    a homeland defense capability that is superior to either organization
    could provide separately.
        Our four joint venture opportunities saved $2.5 million and avoided
    over $16 million in the just the last two fiscal years. Not all DOD
    hospitals are candidates for joint ventures, but we are excited about
    finding those that are and investing in the opportunity.
        Partnerships with the VA where they make good sense not only save
    money; they enhance care to both of our beneficiary populations. The
    new contracts promise enhanced pharmacy support and health care to
    beneficiaries.
        An additional enhancement to the DOD's health care benefit is that
    of Tricare For Life--the extension of Tricare benefits to our retirees.
    This program has dramatically improved the quality of life for our
    Medicare-eligible retirees and their families. In the first year,
    Tricare for Life produced 30 million claims. The program also
    significantly improved access to pharmaceuticals to our retiree
    population. Retirees appreciate both the quality of care and the
    knowledge that the country they proudly served is now there to serve
    them.
        I have described many activities the AFMS performs to ensure that
    the airmen we send into the field are healthy. But, once they are
    there, we must also work to ensure they stay that way--that they are
    protected from injury, disease, and biological and chemical weapons. We
    must provide an operations environment that is safe. This leads me to
    our second core competency, Human Performance Enhancement and
    Sustainment.

    Human Performance Enhancement and Sustainment
        Airmen are our most valuable assets. Their readiness directly
    impacts the combat effectiveness of the United States Air Force.
    Therefore, it is not good enough to just have disease-free troops, they
    need to be working at their optimal performance level during strenuous
    military operations. To that end, the Air Force Medical Service has
    developed a Deployment Health Surveillance program that ensures and
    protects the health of its members from the day they enter service and
    don their first uniform, during deployments, and throughout their
    entire career.
        Deployment Health Surveillance is more than just the application of
    exams immediately before and after a deployment; it is a Life Cycle
    approach to health care that lasts as long as the member is in uniform
    and beyond. Some of the most recent developments in Deployment Health
    Surveillance are the most exciting. These include technologies that
    rapidly detect and identify the presence of weapons of mass
    destruction, technologies such as genomics, bio-informatics, and
    proteomic clinical tools.
        Each of these state-of-the-art efforts promises speedy
    revolutionary diagnostics, enabling near real-time bio-surveillance.
    And, whereas, most bio-chemical detectors take hours or days to detect
    and warn us that agents have been released into the environment, the
    sensors we are now developing will have near real-time capability to
    warn us of an attack.
        The AFMS was the first to transition polymerase chain reaction
    technologies into a fielded biological diagnostic detection system.
    This technology keeps watch over troops in the field and our homeland.
    It provides better protection for our entire nation while
    simultaneously revolutionizing daily medical practice.
        Whether these detection units stand sentinel over military men and
    women overseas or guard major population centers here at home, their
    presence translates into markedly decreased mortality and morbidity.
    Additionally, because it can quickly detect and identify pathogens, it
    decreases wasted time and resources in laboratory and therapeutic
    interventions.
        The AFMS is working to overcome another threat to our troops and
    citizenry--a threat more often associated with science fiction than
    with current events: directed energy weapons--lasers. Directed energy
    devices are now commonplace. Hundreds of thousands of lasers are
    employed by many countries around the world . . . mostly for peace,
    many for war. Militaries, including our own, use lasers in weapons
    guidance systems to help them drop bombs with pinpoint accuracy.
        In response to this threat from our enemies, we developed--and
    continue to improve upon--protective eyewear and helmet faceplates.
    These devices are designed to absorb and deflect harmful laser energy,
    thus protecting pilots from the damaging and perhaps permanent eye
    injuries these weapons inflict.
        We are also investigating commercial off-the-shelf, portable
    medical equipment that can quickly scan retinas and automatically
    determine if a person's eye has suffered damage from lasers.
        The AFMS is teaming with other Air Force organizations to
    transition several protecting and surveillance technologies to allow
    our forces to enter, operate and safely prevail within the laser-
    dominated battle space.
        Lasers are not the only threat to our forces. There is also the
    familiar threat of biological and chemical weaponry. Congressional
    members and their staff, journalists, post office workers, and average
    citizens fell victim to anthrax attacks in the fall of 2001. As
    sobering as these attacks were, we were fortunate they were committed
    with a biological weapon for which we had a ready defense--an
    antibiotic--and that the anthrax was delivered in small amounts.
        Our nation and its medical community learned much from the
    incident; so did our enemies. They will know better how to strike us
    next time, and we must be prepared.
        To detect and combat such a threat, the AFMS is developing
    detection, surveillance, and documentation systems to help us recognize
    and respond to future biological and chemical warfare attacks. The
    Global Expeditionary Medical System--or GEMS--is one such system.
        GEMS was first developed and deployed during Operation DESERT
    SHIELD/DESERT STORM as a means to monitor and help protect the health
    of deployed forces. During that initial deployment, it captured over
    11,000 patient encounters in the field and relayed this valuable
    information to what is now the Brooks City Base in Texas for analysis.
        GEMS is now a mature, fully functioning asset. It establishes a
    record of every medical encounter in the field. It then rapidly
    identifies clinical events such as a potential epidemic. Whether the
    outbreak is accidental such as food poisoning, or intentional such as
    the release of a weapon of mass destruction like Anthrax at an airbase,
    GEMS can quickly alert medics about the presence of the weapon and
    allows our medics to attack and defeat the biological or chemical agent
    before its effect can become catastrophic.
        GEMS does not look like much . . . it is a ruggedized laptop
    computer with a few small attachments, but its toughness and small size
    make it ideal for troops in the field. GEMS will soon be incorporated
    into the Epidemic Outlook Surveillance system, or EOS. EOS is an
    initiative to network--to link together--all systems that detect and
    identify biological and chemical warfare agents. It also incorporates
    all data produced from provider-patient encounters. From this, medics
    and leadership can monitor the possible presence of weapons of mass
    destruction, determine their current and predicted impact on troops,
    and respond with precision to defeat their effect. This is all
    accomplished to protect not just a base, nor theater of operations;
    rather EOS will provide overarching, worldwide oversight of the health
    of our troops.
        What is fascinating about this system is its speed. The current
    standard to detect and identify a biological or chemical agent--and
    contain the epidemic it could create--is five to nine days. Aboard
    ship, or in a military base, the resources needed to care for the
    infected and the high casualty rate would overwhelm the mission. Even
    if the agent were detected in the first three days, we expect that up
    to 30 percent of our troops would fall ill or worse.
        When it comes to identifying chemical and biological weapons
    attacks, lost time means lost lives. We are fast now. We strive to be
    faster. Our goal is to recognize and combat a potential epidemic within
    the first three hours of its introduction into the population. We are
    working with the other services to create sensors with this capability.
    These technologies are just over the horizon, but we are developing
    man-portable sensors capable of detecting chemicals and pathogens
    almost instantly. When fully developed, these sensors will have the
    capability to read the genetic structure of a biological agent to tell
    us exactly what it is and what antibiotics would best defeat the
    attack.
        Obviously, such programs have both military and civilian
    application, so we are working with many other military, federal,
    university, and civilian organizations to develop, deploy, and share
    this amazing technology.
        The enemy is not the only threat our troops face. During extended
    operations, our airmen find themselves combating fatigue. Physical and
    mental exhaustion lead to judgment errors, errors that in combat can
    cost lives. With its ``Global Reach, Power and Vigilance'' mission, the
    Air Force continues to strain the physiologic limits of its aircrews.
    It must develop methods of protecting its troops from the dangers of
    fatigue, for fatigue is a killer in the battlefield.
        We have been working hard with the Air Force Research Laboratory,
    Air Combat Command and our aircrews to develop advanced techniques to
    maximize performance and safety on long-duration missions. These
    techniques include planning missions around the body's natural sleep
    cycles--the circadian rhythm--diet manipulation, and pharmacological
    and environmental assistance.
        Such activities greatly aid our force-protection measures in an
    ever-changing battle space. But, during operations, the AFMS' ``bread
    and butter'' is the level to which we can properly treat and move
    wounded battle participants.
        This leads me to our third core competency: Fixed Wing Aeromedical
    Evacuation.

    Fixed Wing Aeromedical Evacuation
        We have invested many resources and much time into keeping troops
    healthy and enhancing their performance. But in the operational
    environment, people do become sick. They do get injured. For such cases
    we developed an aeromedical evacuation system that can move patients
    from the field to definitive care, often within hours of their
    acquiring the illness or injury.
        The Aeromedical Evacuation System is a unique and critical part of
    our nation's mobility resources. The need to move critically injured,
    stabilized patients from forward areas to increasing levels of
    definitive care has driven significant changes in the fixed-wing
    environment.
        In the past, Aeromedical missions were limited to certain airframes
    such as the C-141 cargo aircraft or our special C-9 Nightingale AE
    aircraft. However, aeromedical evacuation is a mission and not a
    particular aircraft platform; and it is a mission recognized as a core
    competency within the larger airlift mission. As we retire our aging AE
    platforms and transition from dedicated to designated aircraft in the
    mainstream of airlift flow, we are developing new tools such as the
    Patient Support Pallet, or PSP.
        The PSP is a collection of medical equipment compactly assembled so
    that it can easily fit into most any cargo or transport aircraft. When
    needed, it is brought aboard, unpacked, and within a short time is
    transformed into a small patient care area. This means that patients no
    longer have to wait hours or even days for an aeromedical evacuation
    flight. Just give our medics a PSP and an hour, and they will take the
    C-5 that just unloaded troops and tanks, and will convert a small
    corner of that plane into an air ambulance.
        Our 41 PSPs strategically positioned around the globe permit any
    suitable airframe in the airlift flow to be used. This awesome
    capability minimizes delay of movement, maximizes available airlift,
    and most importantly, saves lives. We plan to buy more.
        Insertion of critical care skills early in this process is provided
    in the form of specially trained Critical Care Air Transport Teams, or
    CCAT teams. These teams--comprised of a physician, nurse and
    cardiopulmonary technician--receive special training that enables them
    to augment our air evacuation crews and deliver intensive care support
    in the airborne environment. Our Active Duty medics have 42 CCAT teams,
    but our ARC forces are full partners in this new capability. The Air
    Force Reserve contributes 25 CCAT teams, and the Air National Guard 32
    teams to our AE mission. Each is ready for rotation into the AEF along
    with their Active Duty counterparts.
        Another valuable tool is the TRANSCOM Regulating and Command &
    Control Evacuation System, otherwise known as TRAC\2\ES. TRAC\2\ES is a
    DOD/Joint enterprise that allows us to plan which patients should fly
    out on what aircraft, what equipment is needed to support each patient,
    and what hospital they should fly to; and it provides us in-transit
    visibility of all patients all the time. TRAC\2\ES provides command and
    control of global patient movement in peacetime, contingencies and war.
        TRAC\2\ES is an overwhelming success. It has accomplished all of
    the goals specified in the re-engineering process and has produced
    benefits that no one anticipated. To date:
      --There have been more than 1,700 patients/soldiers moved as a result
            of activities during OEF, and nearly 17,000 such moves
            worldwide last year.
      --Every patient was directed to the appropriate treatment facility
            for the needed care.
      --And an amazing 100 percent in-transit visibility has been
            maintained on all patients moved through the TRAC\2\ES system.
        TRAC\2\ES is also de-linked to specific aircraft. This is critical
    to its success, especially during the activation of our Civil Reserve
    Air Fleet or CRAF. The CRAF is comprised of up to 78 commercial
    aircraft--both cargo and passenger--that are provided to the Department
    of Defense by civilian airline companies. We use them to transport
    material and people into the theater of operations. We could also use
    them to potentially evacuate sick or injured troops out of the theater.
    If so, TRAC\2\ES will still function, regardless of the service,
    regardless of the aircraft.
        Patient movement during current operations has incorporated all
    aspects of this continuum: maintenance of health in the field, use of
    organic airlift, versatile equipment support packages, early-on
    critical care intervention, and information systems that track and
    inform leadership of the health and location of their troops.
        From battlefield injury to home station, there is seamless patient
    movement under the umbrella of qualified, capable aircrew members and
    trained critical care professionals.
        I must mention here, that 87 percent of the aeromedical evacuation
    capability I have described resides within the Air Force Reserve
    Command and Air National Guard. These dedicated men and women of these
    organizations are truly our Total Force partners.

    Medical Care in Contingencies
        Medical Care in Contingencies, is our fourth core competency and
    one in which we have also seen significant transformation.
        The Air Force Medical Service provides the full spectrum of ground-
    based medical care during contingencies. Described as a ``Red Wedge''
    capability, expeditionary medical care begins with a rapid ramp-up of
    medical capability. First into the field is our small Prevention and
    Aerospace Medicine--or PAM--Team. PAM teams are 2- to 4-person teams
    who are our first-in-and-last-out medics. They are inserted with the
    very first troops and are capable of providing health care, on
    location, before the first tent stake is in the ground.
        Team members include an aerospace medicine physician,
    bioenvironmental engineer, public health officer and an independent
    duty medical technician. They provide initial health threat assessment
    and the surveillance, control, and mitigation of the effects of the
    threat. Additionally, the aerospace medicine physician and independent
    duty medical technician provide primary and emergency medical care and
    limited flight medicine.
        As forces start to build in theater, so does the size of the
    medical contingency. The PAM team is quickly followed by a small but
    exceptionally skilled Mobile Field Surgical Team [MFST].
        This highly trained surgical team includes a general surgeon, an
    orthopedic surgeon, an emergency medical physician and operating room
    staff, including an anesthesia provider and an operating room nurse or
    technician. The 5 team members each carry a 70-pound, specially
    equipped backpack of medical and surgical equipment. Within these few
    backpacks is enough medical equipment to perform 10 emergency, life-or-
    limb-saving surgeries without resupply.
        By putting backpack providers deep into the theater or operations
    we save time and we save lives. No longer do we wait for the wounded to
    come to us, we take the surgery to the soldier.
        The MFST's capability has been proven in Operation Enduring
    Freedom. For example, less than one month after Sept. 11, Air Force
    medics assigned to Air Force Special Operations in OEF saved the life
    of an Army sergeant who lost nearly two-thirds of his blood volume when
    he fell and severely damaged his internal pelvic region. Within
    minutes, an Air Force MFST reached him and worked more than four hours
    to stabilize him enough for transportation to a U.S. military medical
    facility.
        A Canadian journalist at Bagram Air Base--not far from Kabul,
    Afghanistan--was horribly injured when a grenade ripped open her side.
    Our medics were there instantly to provide initial stabilization,
    treatment, and her first surgery. Our Aeromedical and CCATT teams
    arranged rapid aeromedical evacuation and provided care in the air. The
    TRAC\2\ES system tracked her movement from Southwest Asia to Europe. It
    provided early warning to the receiving facility of her condition and
    extent of her wounds. When she landed she was met by our medics and
    taken to a military hospital for definitive care.
        Both patients survived. Just a few years ago, before we created
    this capability, both would have died.
        We can provide full spectrum care--anytime--anywhere.
        Expeditionary Medical Support--EMEDS--is the name we give our
    deployed inpatient capability. The small PAM and MFST teams I described
    are the first two building blocks of an EMEDS. To them, we add 17 more
    medical, surgical, and dental personnel. These medics bring with them
    enough tents and supplies to support four inpatient beds. We can keep
    adding people and equipment in increments as needed until we have
    erected a 125-bed field hospital. A unique capability of EMEDS is that
    they are equipped with special liners, ventilation and accessories to
    protect against biological and chemical warfare attacks.
        As an additional measure to defend against these weapons, we field
    Biological Augmentation Teams. They provide advanced diagnostic
    identification to analyze clinical and environmental samples centered
    around RAPIDS, our Rapid Pathogen Identification System. Each team has
    two laboratory personnel who can deploy as a stand-alone team or in
    conjunction with an EMEDS package.
        After our successful deployment of Biological Augmentation Teams to
    New York City in response to the October 2001 anthrax attack, we
    realized just how invaluable these teams were to local public health
    and Centers for Disease Control officials. Since then, we have reached
    a total of 30 fully staffed and equipped teams, and additional 14
    manpower teams designed to backfill or augment the other teams. They
    have been--and continue to be--deployed throughout OPERATION Enduring
    Freedom.
        A common attribute of each medical team I have described is that
    they are small. The Air Force expeditionary medical footprint is
    shrinking. These smaller units can be assembled in increments;
    therefore, are flexible to the base commander's requirements.
        Their small size makes them cheaper, easier, and faster to
    transport. A few years ago we used to talk about how many aircraft we
    needed to move our huge Air Transportable Hospitals into a theater. Now
    we talk about how many pallets we need on an aircraft.
        In just a little over a decade, we have become far more capable
    with fewer people, less size, less weight, less space--and less time.
        This is important. Speed counts. CNN claims it can have a
    journalist anywhere in the world reporting within seven minutes of an
    incident. We may not beat CNN to the scene, but our light, highly-
    mobile expeditionary medical support teams will be on the ground
    shortly thereafter--perhaps within as little as three to five hours.
    For any humanitarian or combat contingency, our EMEDS concept is a true
    force multiplier. It gives the combatant commander state-of-the-art,
    worldwide medical care for his deployed forces.
        Our transformation has accelerated the speed with which Air Force
    medics get to where they are needed. Our training programs ensure that
    once they get there, they are fully capable of providing life-saving
    care.
        Two medical training programs are especially crucial to this
    capability; one is our Readiness Skills Verification Program (RSVP).
        Each member of a deploying health care team, whether a physician,
    logistician, administrator or nurse, will be called upon to perform
    numerous tasks in the field, tasks they would never encounter in their
    home-base medical facility. The RSVP ensures these troops train on, and
    master, each of these must-know tasks.
        Our medics practice them routinely. The list is varied: treating
    tropical diseases, linking our computer to foreign networks, using
    ruggedized surgical equipment in field tents--troops must master these
    tasks before their boots touch the ground in a deployed location.
        The other medical training program vital to our expeditionary
    medicine mission is the Center for the Sustainment of Trauma and
    Readiness Skills, or C-STARS.
        Because our military physicians care for arguably the healthiest
    population in the world, the medical problems they see during the
    normal duty day are different from the traumatic and life-threatening
    injuries the providers will encounter in the battlefield.
        To prepare our medics to care for these injuries, we train them in
    one of three C-STARS locations: civilian hospitals in Cincinnati--where
    our Reserve personnel train; St. Louis--where Air National Guard medics
    train; and Baltimore where active duty personnel train. Our staff work
    side-by-side with civilians in these facilities to care for patients
    suffering from knife and gunshot wounds, crushing injuries, and other
    traumatic wounds; the kind of injuries our medics can expect to
    encounter while deployed.
        Hundreds of our medics have trained at C-STARS over the last 2
    years. At one time, more than 75 percent of the Air Force special
    operations medics in Afghanistan received their first ``battle-field
    medicine'' experience at C-STARS, as have all of the CCAT care-in-the-
    air teams I mentioned earlier.

    Interfacing with World Health
        Our allies and coalition partners around the world are paying close
    attention to these initiatives. They are eager to work with us in
    improving their military medicine programs. This leads me to discuss
    our final core competency, Interfacing with World Health.
        The Department of Defense's Joint Vision 2020 states that today's
    U.S. forces must be prepared to operate with multinational forces,
    government agencies, and international organizations. The Air Force
    International Health Specialist Program fulfills this mission. The
    International Health Specialist program identifies medics with
    specialized language and/or cultural skills, trains these airmen to
    enhance their skills, and provides a database of medics tailor-made for
    specific international missions.
        Active Duty, Air National Guard, and Air Force Reserve
    International Health Specialists regularly interact with the U.S.
    Unified Command Staff, non-governmental agencies, members of foreign
    military units, and interagency personnel. They provide insightful
    recommendations on a variety of issues and situations.
        Whether assisting with blast resuscitation and victim assistance
    missions in Cambodia, conducting on-site capability surveys in Sierra
    Leone and Senegal, or by participating in discussions on international
    humanitarian law, our International Health Specialists are at the
    forefront of global health engagement. Their involvement in host-nation
    exercises and civic assistance activities ensures we are ready to
    deploy assets wherever and whenever needed, and that the Air Force
    Medical Service can effectively engage in multi-national environments.
        Through our Professional Exchange Program, foreign military
    physicians provide care shoulder-to-shoulder with our staff in Air
    Force medical facilities. In addition, our Expanded International
    Military Education and Training Program uses Air Force medics to
    ``train the trainers'' of foreign military and civilian medical
    facilities. In the last couple of years we have trained 1,700
    healthcare providers in 18 countries. We share our expertise on how to
    train and prepare for, and react to, medical contingencies. Often, our
    foreign students are receiving such instruction for the very first
    time.
        Ultimately, if a regional contingency does occur, our medics will
    be able to respond to it as one of many partners in a carefully
    orchestrated international coalition of medics.
        To summarize, those are our five core competencies: Population-
    based Health Care, Human Performance Enhancement and Sustainment, Fixed
    Wing Aeromedical Evacuation, Medical Care in Contingencies, and
    Interfacing with World Health.

    Human Resources
        Our successes in these core competencies could not be accomplished
    were it not for the phenomenal people whom we recruit and maintain
    among our ranks. We know our medics are among the best in their fields.
    For example, the internal medicine program at Wilford Hall Medical
    Center at Lackland AFB, Texas, recently scored third out of 398
    programs nationwide during the Medical Resident in Training
    examinations, placing them in the top 1 percent in the nation. This is
    extremely impressive when one considers we're being compared to medical
    programs such as Harvard's. This is but one example of the caliber of
    our nearly 45,500 Active Duty and Reserve Component medical personnel.
    This number includes more nearly 1,400 dentists, 5,000 physicians, and
    7,000 nurses. However, attracting and keeping these troops is
    difficult. We seek only the most educated and dedicated nurses,
    physicians, and dentists. Obviously, those attributes are also highly
    sought by civilian health care organizations.
        The Air Force offers these young professionals a career of great
    self-fulfillment, awesome responsibility, and excitement. The civilian
    market offers these incentives, too, but in many cases--in most cases--
    provides a far more attractive financial compensation. Furthermore, the
    life and family of a civilian provider is not interrupted by
    deployments--something our troops are experiencing at a frequency not
    seen since World War II.
        These deployments are a burden to our active and reserve forces. I
    am keenly aware of the elevated use of our Air Reserve Component over
    the last decade, and the difficulties deployments create for their
    family and work lives. My staff does their utmost to only use ARC
    forces on voluntary status, to activate them for the shortest time
    possible, and to call upon their services only when other options are
    not available.
        However, it is for these reasons--the lure of more attractive
    civilian compensation and the frequent deployments--that we find it
    difficult to attract the kind of medical professionals we badly need.
        For instance, our fiscal year 2002 recruiting goal was to acquire
    over 300 fully trained physicians--we recruited 41. We required 150 new
    dentists--we recruited 39. Nurses, we needed nearly 400--we recruited
    228.
        Fortunately, last year's National Defense Authorization Act permits
    increased compensation for these skills. It allows for loan repayment,
    increased accession bonuses and specialty pay. I thank you for
    providing these incentives. They are very useful tools and a good start
    toward obtaining the quality and quantity of medical professionals we
    so urgently need.

    Conclusion
        In conclusion, I am incredibly proud of our Air Force medics and
    honored to lead them. Each of these five core competencies demonstrates
    how far the Air Force Medical Service has transformed since the fall of
    the Berlin Wall, especially in the last five years. We will continue to
    anticipate the challenges of tomorrow to meet them effectively.
        We are very proud to have a leading role in support of our
    expeditionary Air Force. As the U.S. Air Force focuses more and more on
    improved effects, we are in lockstep with the line in our ability to
    provide the right care at the right time with the right capability. We
    remain at the right shoulder of war fighters, at home base to provide
    for a healthy workplace and home, and in the field to keep war fighters
    protected and at the peak of their mental and physical capabilities.
        We thank you for the critical support you provide that makes this
    possible.

        Senator Stevens. Senator Inouye, you heard most of the
    testimony. Would you like to ask questions first?
        Senator Inouye. I thank you very much, Mr. Chairman. Before
    I proceed with my questions, I'd like to make four
    observations. Whenever a military person is wounded on the
    field or on a ship or in the air, I believe the first person he
    calls for is a medic or corpsman. That was my experience. No
    one called for his wife, but they called for a medic.
        Secondly, whenever the chairman and I have visited bases
    and camps, met with enlisted personnel and officers, the first
    question or the bulk of the questions asked refer to health
    care for dependents. In fact, very few have ever touched upon
    pay raises. It is always on health care for my kids or my wife.
        Third, it is obvious that morale depends upon the level of
    care that the personnel, their spouses, and their children
    receive.
        And fourth, this is a personal matter, but I say it in
    looking over the citations of medals for high bravery,
    especially for medals of honor. This is a common phrase, he
    killed 25, captured 18. Medics do not kill or capture. As a
    result, medals of courage for medics are very, very rare, and I
    think something should be done with that because if you ask any
    infantrymen or any Marine who will tell you that the bravest of
    them all are the medics or the corpsmen. And somehow, our award
    giving system does not cover that.

                            INCREASED MEDICAL COSTS

        And so with my question, I have a general question for all
    three of you. Since 9-11 the military has been taxed with
    additional missions both here and abroad. You have cited all of
    them. Each additional requirement results in increased medical
    costs, which are not always accounted for in the budget or
    fully covered in the supplemental request. The monitoring of
    our personnel before, during and after they are deployed is a
    result of the lessons learned after the Gulf War.
        Additionally, costs increased to backfill deployed medical
    personnel, handle casualties of war, and treat personnel in
    theater and at home. With our continued involvement in these
    missions in the upcoming fiscal year, I'd like to hear from the
    services on how they are executing fiscal year 2003 and what
    they anticipate for the next fiscal year 2004.

                            MEDICAL BUDGET SHORTFALL

        And my question will be for the services, will your
    services have sufficient funds to execute fiscal year 2003 and
    do you anticipate any budget shortfalls in fiscal year 2004?
    Are there ways to address the potential shortfall in fiscal
    year 2004?
        Because I'm certain all of us realize that we will be
    involved in the continuous global war on terrorism, not for the
    next 6 months, not for the next 6 years but much more than
    that. So with that in mind, General Peake?
        General Peake. Well, sir, first I would like to thank the
    committee for the help with the supplement that is working its
    way to us now and the $501 million that was designated for the
    Defense health program with the comments that need to get
    focused down to the direct care system.
        We haven't seen yet the amounts that will come down to us.
    It is clearly needed because we have been forward funding the
    effort that you have described, sir, from opening places like
    Fort McCoy and Fort Dix, where we do not necessarily have a
    presence yet, mobilizing soldiers, purchasing their
    prescriptions, providing them their glasses, all of those
    things to make them ready medically to go with the force.
        We have deployed in the Army now about 3,471 professional
    fillers out of the day-to-day health care environment into the
    hospitals that are in Iraq and into the brigades and battalions
    of our Army to provide them with medical support. And those
    people we have backfilled partially with reservists. They are
    terribly important to us. But others we have had to reach out
    and contract.
        Those numbers we are trying to do good accounting for and
    we look forward to the moneys coming out of the supplement to
    help us to defray those costs so that we, because what we had
    borrowed from is the day-to-day health care operations that go
    on in our large organization, that deliver health care to
    families and soldiers and so forth. We also have family members
    coming in from the Reserves who now are TRICARE eligible and we
    have an obligation to provide them quality care as well.
        So from the, from the global war on terrorism, aspects of
    it, sir, we are looking to see the money that gets to us from
    the supplement and there may or may not be more required to
    cover just that particular aspect for fiscal year 2003.
        Regarding fiscal year 2003, I am leveraging potential money
    in our maintenance accounts to be able to ensure that we are
    covering the health care that we are, should be doing at the
    quality we should be doing it for our full regular mission. I
    would tell you, sir, we are busier than just Iraq. We have
    Afghanistan going. We have people in Colombia, the Philippines,
    Honduras and Bosnia and a Kosovo mission as well. So it is a
    very, very busy military and therefore very busy medical
    structure as well.
        With all of that activity, it creates a bit of a unsettling
    of our business process so we really do have additional
    expenses that come up. This is a new expense that will have to
    be accounted for that is not yet accounted for.
        As we look to 2004, we will be redeploying our forces. As
    you say, sir, we will still have people deployed doing the
    variety of missions that go along with the post-Iraq business
    as well as the other areas that I have spoken about.
        We will have to face what potentially happens with the
    retention of our soldiers and so forth, which always creates a
    bit of a turmoil when folks start to return and readjust their
    lives and so forth. Right now, we are, we use the civilian care
    and we hire other professionals and nurses, as an example, to
    come and work in our hospitals to make up that delta, so we can
    continue the missions in our military hospitals. So those
    become the kind of bills that we will be facing in fiscal year
    2004 as well.
        In addition, we are doing the next contracts. There are a
    variety of things like appointing and utilization management
    that come back to the military treatment facilities instead of
    at the contractor level, and we will have to figure out how
    much that is going to cost us to get those things restarted
    within our own organizations.
        In the long run, we think it is absolutely the right thing
    to do, but there may be some startup costs that will have to be
    identified, and we are looking at that as well for 2004.
        Admiral Cowan. Sir, I will try to answer your question with
    a little different approach. Both fiscal year 2002 and fiscal
    year 2003, Navy medicine has been funded adequately. We are
    often asked are you fully funded and we say we are adequately
    funded. We have enough money to get properly through the year
    to execute our mission and to not require either supplementals
    or reprogramming.
        At an adequate funding level, we are sustainable for a long
    period of time, but we do not get at our backlog of military
    construction, repair, investment, capital investment, new
    equipment and so on. In fact, we may at this level be getting
    slightly behind. The newest building in which health care is
    delivered in Guam was built in 1952.
        The budget that we submitted for fiscal year 2004 will also
    be adequately funding. We are comfortable operating in the
    fiscal year 2004 time frame. This part of my answer is for the
    known mission of the health care to our beneficiaries.
        The second part of your question is the unknown missions,
    the ones that we have been involved with, both Iraq and
    Afghanistan, as well as the others that General Peake
    mentioned, and others that may come in the future.
        That is a harder question for us to answer. For example,
    right now, I would not be able to tell you the cost of the
    medical care caused by the Iraq war because much of that has
    been moved into our TRICARE networks and purchased care and we
    won't even see those bills for another 120 days.
        So, we are working with the TRICARE partners to normalize
    and make as much of the health care delivery as routine as we
    possibly can, as we go through these iterations of deployments.
    But to say that we are, can predict a budget for operational
    issues is not something I would be comfortable with right now.
        Senator Inouye. General Taylor?
        General Taylor. Senator, I wanted to say first of all, I
    would be glad to mount up with you on that charge for
    recognizing the medics who are in harm's way and are doing a
    great job for our Nation. I think all three of us would be more
    than happy to get on our steeds and mount that charge with you.
        In terms of fiscal year 2003, due to your great efforts
    through the supplemental, the Air Force is very comfortable
    that we are going to get through this year in good stead.
        In terms of next year for what we budgeted and what Health
    Affairs submitted for us through the President's budget, we are
    pretty comfortable. As Admiral Cowan said we are adequately
    funded. There is no provision in there for additional costs for
    the global war on terrorism. If we have Reservists and National
    Guard who remain activated into the next fiscal year, we have
    to account for their costs.
        We have done a very good job I think over the last few
    months of capturing all of the additional costs that go with a
    forward deployed force, and we are pretty comfortable we have
    been able to identify those costs to the Department. There is
    great uncertainty as the next generation TRICARE contracts come
    in, for instance, what kind of immediate resources we will have
    to use within the services to help bridge any gaps that occur
    as we move from one contract to the other.
        And finally, I believe that the optimization funds that are
    provided have been a Godsend in terms of giving us venture
    capital to allow each of us to increase the amount of care we
    deliver in the direct care system, generating dollars for the
    pennies invested and giving us that capability.
        So in summary, I think the Air Force Medical Service is in
    a solid state for the rest of this year and as budgeted for
    fiscal year 2004.

                            RECRUITING AND RETENTION

        Senator Inouye. A bit more specifically, do you have any
    problems in recruiting and retention, and if so, what areas of
    concerns do you have on specialties?
        General Peake. Sir, I think it is a concern for us, and we
    had good success with critical skills retention bonuses that
    we, each of our services funded for us this last year that we
    do not have. It is not a programmed payment. But we have, in
    terms of a net loss of physicians last year between 2002 and
    2003 was 43 and you say that is not that many, but when you
    start looking at them, 17 of them were anesthesiologists, 17
    radiologists. That becomes very expensive.
        We are looking to get a change in our benefit in terms of
    the bonus packages for physicians to be able to recruit better.
    We are, and I think that that is going to be an important thing
    for us to follow through on over the course of this year.
        Nursing is also a shortage for us, and I think we will hear
    about that on the next panel more expansively, that they are
    absolutely critical for our ability for us to do our business.
    We have had the direct hire authority to be able to hire
    civilian nurses and that's been really a big plus for us to be
    able to go out and quickly hire folks and we would, we need to
    have that authority continued.
        Admiral Cowan. Sir, we have shortages in each of the corps.
    In the medical corps we have traditional shortages, and those
    specialties that you would expect to have shortages because of
    pay discrepancies between the civilian and military world.
        Unfortunately, many of those tend to be wartime
    specialties, trauma surgeons, anesthesiologists and the like,
    and they frequently run in the 80 percent range. We are right
    in the process of undertaking some initiatives to get at that.
    We think there are two ways to improve those numbers.
        One is through changing the bonus structure for those
    particular specialties, and the other is providing other
    nonmonetary incentives for people to come in and serve in
    various roles, both active duty and Reserves, providing a
    variety of incentives that we do not have now, particularly in
    Reserves.
        We have a particular problem in the dental corps among
    young dental officers who accrue large personal debts because
    of the equipment that they have to buy to get through dental
    school and the pay differences between civilian practices and
    the military makes it uncomfortable for them to be financially
    stable in the military. And we have similar problems with
    health care providers in the medical service corps such as
    podiatrists who have large debts and find military service
    financially unattractive.
        We are understaffed in some areas in the hospital corps,
    and again looking to new programs and incentives that will move
    corpsmen into those critical specialties.
        Senator Inouye. Are those shortfalls occurring right now?
        Admiral Cowan. Sir, the shortfalls in the medical field
    have been chronic for many years.
        Senator Inouye. And the anesthesiologists?
        Admiral Cowan. Yes, sir.
        Senator Inouye. You do not have enough?
        Admiral Cowan. No, sir. We do have enough, but we do not
    have everybody back home. So if we went to two full wars at the
    same time, it would be very difficult for us to populate all
    those billets that we need.
        General Taylor. Very similar in the Air Force. One story is
    that last summer we had 39 internal medicine physicians who
    were eligible to leave the service and 38 of them did. There
    are pay issues in terms of improving pay. We have great
    authorities to increase pay. We are working diligently to get
    the funds to match that capability and flexibility.
        But it is not only specialty pay and loan repayment plans,
    it is the environment of work, and all three of us are working
    very hard to enhance the capabilities of our direct care system
    facilities, equipment, and staffing to enable all specialties
    from dental care to nursing corps to podiatrists to
    anesthesiologists to be able to practice the full spectrum of
    their capability.
        The money has been important to the Air Force as we try to
    bridge the gap that exists between the staffing we should have
    and the staffing that we actually have.
        We are going to have some terrible shortages in radiology
    coming up in the next 2 or 3 years. We have a terrible problem
    with anesthesia, and a 50 or 60 percent staffing range in
    internal medicine. Those are difficulties that we can contract
    in for if we can get the funds freed up. That's why the
    TRICARE-Nex program will lift those funds in the local group,
    and that optimization money gives us that venture capital to
    cover.
        So those are two important parts. It is not just specialty
    pay and loan repayment. It is the environment of care that will
    help greatly in recruiting and retaining wonderful people.
        Senator Inouye. I have a few other questions, Mr. Chairman.

                             STUDENT LOAN REPAYMENT

        Senator Stevens. Thank you very much. I will submit some
    questions for the record in view of the time frames. I am
    interested, though, in that line of questions Senator Inouye
    asked.
        In terms of the debts that your professionals have as they
    come into the service, do you have the system that we have here
    that we can pay a portion of the debts for each year that they
    serve, the debts they come to Government with from school,
    student loans? Are you paying off student loans for those who
    went to school when they joined the services?
        Admiral Cowan. Yes, sir. The way the Navy accesses
    physicians, we get about 300 a year through either scholarships
    or paying back, helping them pay their medical school debts. We
    get about another 50 through the Uniformed Service University
    and we get a handful through direct accession.
        We have similar programs for the dental corps and nurse
    corps, and in the nurse corps we have a very good incentive
    program that sends them along pending successful careers into
    master's and even Ph.D. programs as a part of their
    professional development.
        Our abilities, for example, to pay for the dentist's debt
    is, however, limited and because of changes in the way dental
    education has occurred, we now find ourselves at a competitive
    disadvantage.
        Senator Stevens. We will be glad to hear some of the
    problems you have encountered and see if funding is any part of
    the problem.
        Admiral Cowan. Sir, that would be very kind of you.
        Senator Stevens. Particularly where we have a situation
    where people who are called up, for instance, we ought to find
    some way to take on that, those debt repayments while they are
    on the service. I'm talking reservists. They have substantial
    burdens that we have discovered in this last call-up period.
        I'm sure Senator Inouye and I would like to pursue that,
    but we would be pleased to have you help us with some
    suggestions that you might have about how we can have a call up
    bonus, termination, a bonus on return to civilian life, but
    somehow reflect the costs that they have incurred by coming
    back in. The Reserve is a very important part of our medical
    services now.

                          MEDICAL COMBAT TECHNOLOGIES

        Secondly, I would like to ask, we spend a lot of time
    trying to help finance development of new systems of care for
    those who are critically wounded, right at the point nearest to
    the point of injury, so that during the period of
    transportation to a permanent care facility, they could receive
    the best care possible. Were any of those new technologies
    utilized in this recent Iraqi conflict?
        General Peake. Yes, sir. There were three different types
    of hemostatic dressings that were quickly pulled off the shelf,
    some out of the research base to be applied. Admiral Cowan
    talked about Quick Clot. Chitosan dressing was also purchased
    and investigational new drug fibrin dressing was provided to
    the special operations units as well.
        Senator Stevens. We had a description once of a possibility
    of developing a chair with diagnostic capability within 90
    seconds of determining the extent of critical harm to that
    person, in order that they might be instantly treated. Were any
    of those facilities, were any of those type of facilities
    utilized in this recent conflict?
        General Peake. Sir, this was some life support trauma and
    transport system forward with a mini intensive care unit with a
    stretcher with the built-ins, which I think you are referring
    to. There were folks treated on it. We are getting ready to
    send a team in for clinical after action lessons learned
    findings, and those are the kinds of things that are going to
    be looked at.
        We had the UH60 Lima helicopters were deployed for the
    first time in the theater with the forward looking infrared
    radar with the patient care capacity in the back that really
    allows you to work on a patient, and that's the first time we
    have had that asset. We are really looking forward to hearing
    the after action reviews on how well all of that worked, and
    the glass cockpit for aviation.
        Senator Stevens. Well, I do hope if you will convene sort
    of a symposium of medics who were there and try to get from
    them, what didn't you have? What could you have used? What type
    of procedures or particularly support concepts did you feel you
    needed, but did not have?
        We have to really investigate support right now for
    military and Defense appropriations. If history repeats itself,
    it is going to go away fairly soon, and we will be back to
    battling to get just the moneys that are necessary to continue
    basic support of the military.
        This is the time to fund the innovations that we proffered
    from the lessons we learned in Iraq, so I hope that you will
    move quickly, move very quickly to determine that. I have heard
    my good friend's comments about his four points, and he is
    absolutely right about the medics. That the difference is right
    now, with embedded journalism and cell phones, I think the
    world and families and everyone were contacted quicker, and
    this was more real exposure to what was going on in Iraq than
    any war in history. And that will only continue to expand.
        So I think that the comments that we have heard, at least
    that I have heard, at least from those people who were embedded
    journalists, was nothing but praise for your people and for the
    medics of this period. I certainly will join Senator Inouye,
    and I thank you all in trying to see to it that there is more
    recognition and valor for those people who were right there
    with the combat forces.
        I think we have to do something more than that, in terms of
    recognition for the future, and again, I think we would like to
    sit down with you all and talk about that. In terms of not only
    recognition for exceptional service and valor, but recognition
    for commitment. I think it takes a special person to be a
    combat medic. We both had experience on that. In our days,
    things were a lot simpler than they are now, and I think the
    stress on these medics must be extreme. Very much extreme.
        I would like us to consider spatial periods of readjustment
    for those medics and have some concept of rest and relaxation
    (R&R) that are built in to give people incentive to want to be
    medics in combat periods. But I commend you for what you are
    doing and hope you will follow through. I do not want to get
    too--our period up here is not going to be that much longer.
        I'm not sure how many wars we are going to sit through. We
    have sat through, in the last past 35 years, all of them. But
    we had eight wars so far. That ought to be a record for people
    on this committee. We want to make sure that we, on our watch,
    do everything we possibly can to make certain that the next one
    is handled even better than this one. This one has been handled
    exceptionally well.
        I agree with you about the comment you made about the young
    soldier who lost his foot. The difference between this
    generation and ours is a majority of ours was drafted. This was
    a volunteer.
        Admiral Cowan. Sir, one of the most inspiring things I have
    seen ever is listening to the Marines and corpsmen at the
    hospital. The corpsmen will only talk about the Marines that
    they feel responsible for and the Marines will only talk about
    the corpsmen who they think saved their lives.
        Senator Stevens. Any other questions, sir?

                                 MENTAL HEALTH

        Senator Inouye. Just one question. A few days ago, I was
    watching the networks as most Americans do. And this network
    spent about half an hour covering an activity with the Marines,
    and I suppose he said that it covers all services. All of the
    men who were scheduled for deployment back to the United States
    were undergoing some psychiatric exercise. Is that the usual
    practice?
        General Peake. Sir, I think maybe it was referring to the
    combat stress debriefing business which we, I think, we all
    have sort of embraced the notion that you want to get folks
    able to talk about in a structured environment, the kind of
    trauma that they may have experienced or seen or been involved
    with.
        As we do the post deployment screening, we expanded the
    format, as some questions that apply to mental health to try to
    get at somebody who is having a particular problem.
        We will be doing an extensive post deployment screening
    process as every one of our soldiers, sailors, airmen come
    back. We will then score that centrally, be able to compare it
    against their predeployment screening, so what we want to do is
    identify those that might need additional help or need
    additional follow up, and so I think we are all planning on
    being a part of that kind of thing, but there is really two
    different pieces to it.
        Admiral Cowan. Sir, exactly the same way we have found over
    the years that people subjected to psychological trauma who sit
    with the others who they went through that with and talk
    through their feelings have good health outcomes, and the
    number of people who end up with post traumatic stress syndrome
    and these sorts of things goes way down, so all three services
    do that extensively.
        General Taylor. That's exactly right. The lessons we have
    learned over the last 100 years in mental health is to treat as
    far forward as you can with your peers. That's exactly what
    each of the services does. We feel, as the other services do,
    that these stress teams are a necessity in all major locations
    and must interact with troops on a daily basis. This is an
    ongoing process for all of us.
        General Peake. If I could add a follow-on, sir, in terms of
    this notion being an ongoing process. That's something
    important and something we in the Army are wrestling with now.
        The Coast Guard has had an employee assistance program
    independent of the medical that offers counseling and family
    counseling and those kinds of things without a ``medical
    statement'' or ``medical record.'' I think that's something we
    do not have in our budget that is something we really need to
    take on and be able to expand and get support for.
        As part of the larger holistic approach was, as you point
    out, sir, this global war on terrorism doesn't stop with Iraq.
    This is going to be an ongoing level of activity for us, and a
    level of stress for our families and our service members, and
    that kind of support will be important for us in the future,
    sir.
        Senator Inouye. I'm glad you are doing that because in war,
    mental illness or mental health is considered a stigma and
    Section 8, so no one talked about it. We just assumed that
    everything was fine. But reality tells us that there are
    psychiatric problems, and I'm glad you are doing that. Mr.
    Chairman, I have many other questions I would like to submit
    for the record.
        Senator Stevens. Yes, sir. We will submit some questions
    for each of you, if you will, and what Senator Inouye said,
    again, I really think if we look back over the years, the
    people who were not really compelled to talk about the problems
    right from the start were the ones that had the greatest
    problems.
        I urge you to think about that, along with we ought to have
    a psychological advisor right there. It will work much better
    in the long run. Thank you all very much. We appreciate what
    you are doing. I hope you'll on behalf of all of us here
    congratulate all of the people for the wonderful job they have
    done under our flag. Thank you very much.
        We are now going to hear from the chiefs of the service
    nursing corps. This committee's views on this is critical to
    our future. We will here from the Army, General William T.
    Bester, Chief of the Army Nurse Corps. We thank you very much
    for the service to the Army and our country. We welcome Admiral
    Nancy Lescavage, Director of the Navy Nurse Corps, and it is
    really a great pleasure to have you with us again, Admiral. We
    will proceed with General Bester, since this is his last
    appearance on our watch.
    STATEMENT OF BRIGADIER GENERAL WILLIAM T. BESTER,
                CHIEF, ARMY NURSE CORPS
        General Bester. Thank you, Mr. Chairman. Senator. Thank you
    for this opportunity to provide you an update on this state of
    the Army Nurse Corps. During the past year the Army Nurse Corps
    has again demonstrated our flexibility and determination to
    remain ready to serve this great Nation during a very
    challenging time in our history.
        Senator Stevens. Let me first, if I may, rearrange your
    testimony. Welcome, General Barbara Brannon, Assistant Surgeon
    General for Air Force Nursing Services. We welcome you back and
    apologize to you for not turning the page. General.
        General Bester. Mr. Chairman, what we ask of and receive
    from our nurses in today's uncertain world is nothing short of
    amazing. I'd like to begin by telling you what Army nurses are
    doing at this very minute in places and under conditions as
    austere as soldiers in this country have ever experienced.
        In Iraq and Kuwait, Army nurses have been moving forward
    with the operational flow, saving lives and treating the
    wounded as they do so. Army nurses are integral to the success
    of each and every forward surgical team, Mobile Army Surgical
    Hospital (MASH) and combat support hospital in the theater.
        And as we sit here today, nearly 2,500 active and Reserve
    component Army nurses have or are currently deployed, with time
    away from home exceeding last year's level by sixfold. These
    are selfless dedicated Army nurses who are proud to serve this
    country of ours and to care for our most precious resource, the
    American soldier.
        I'd like to highlight some of the units currently on the
    ground supporting Operation Iraqi Freedom, the fine soldiers of
    the 86th Combat Support Hospital from Fort Campbell, Kentucky
    are providing far forward medical care. We have watched them
    perform their expert skills on the television, and we have read
    about them in the newspapers. Hundreds of patients have
    benefited from their presence, although the full impact of
    their support will not be fully appreciated until the conflict
    ends.
        The 212th MASH from Miesau, Germany initially deployed to
    Kuwait is now providing the highly mobile surgical care needed
    for Operation Iraqi Freedom. This is the last MASH unit left in
    the Army inventory and is again demonstrating the needs for
    flexible, rapid and mobile medical surgical assets.
        Our Reserve component colleagues have stepped to the plate
    to support current operations. The 396th Combat Support
    Hospital out of Vancouver and Spokane, Washington activated on
    January 25 and moved to Fort Lewis, Washington in a matter of 3
    days. Scheduled to be part of the contingent that was to go
    into Turkey, this unit has remained stateside and is now
    integral to the manning requirements of Madigan Army Medical
    Center.
        The personnel of the 396th that performed over 400 surgical
    cases and are providing expert care in in-patient and
    outpatient critical care units, thereby allowing Madigan to
    maintain a high level of operation, in spite of significant
    personnel losses to deployment. The men and women of the 396th
    are just another example of extreme importance of active and
    Reserve integration.
        Army Nurse Corps officers are providing care for our combat
    casualties throughout the entire continuum of care. As I
    pointed out earlier, nurses are far forward in order to quickly
    receive an ill or injured soldier. Our nurses at the higher
    level care facilities in Europe and in the United States are
    ready and waiting to provide the care needed once a combat
    casualty is stabilized for movement.
        At Landstuhl Army Medical Center in Germany, nurses are
    providing critical care for soldiers such as PFC Jessica Lynch.
    Nurse case managers have been manning the Deployed Warrior
    Management Control Center since Afghanistan and are now in full
    operation during Operation Iraqi Freedom. This center was
    established to enhance case management of any casualty from
    their initial injury in theater through his or her return to
    the United States and has facilitated the coordination of care
    amongst all three services.
        Army nurses are also proud to be an integral part of the
    transformation of the new 91 Whiskey health care specialist,
    our combat medic.
        We are embedded in the training unit as leaders and
    educators and positively impact on sustainment training of this
    critical military occupational specialty at every medical
    treatment facility. I'd also like to commend one of our
    outstanding young Army nurses, Captain Timothy Hudson, the
    recipient of the 2002 White House Military Office Outstanding
    Member of the Year award for a company of great officers.
        Clearly, Senators, Army nurses are at the forefront of
    caring and are responding with excellence to the needs of those
    all the way from the President of the United States to our
    great soldiers and their families and our very deserving
    retirees around the world.
        On the recruiting front, we continue to struggle with our
    recruitment of nurses to support today's health care needs and
    the needs of the Army in the years to come. The affect of the
    national nursing shortage continues to affect our ability to
    attract and maintain quality nurses.
        We are still below our budgeted end strength of 3,381, but
    are actively pursuing incentives to counteract this shortfall
    and promote the force in our years to come. As a direct result
    of the 2003 National Defense Authorization Act, we are actively
    pursuing an increase in the accession bonus beginning in fiscal
    year 2005.
        This spring we plan to implement the health professional's
    loan repayment program for both newly recruited nurses as well
    as our cornerstone company grade officers who are serving in
    their first 8 years of commissioned service.
        Understanding the great potential of our enlisted soldiers
    to serve as commissioned officers, we continue to sponsor
    dozens each year to complete their nursing education to become
    Registered Nurses (RN) and subsequently Army Nurse Corps
    officers via the Army Enlisted Commissioning Program.
        We are very proud of these successes, yet we will continue
    to pursue all recruiting and retention avenues in order to
    secure more long-term stability in our manning posture.
        Sir, the general referred earlier this afternoon to our
    civilian nurses and they now comprise about 60 percent of our
    total nurse work force and are clearly key to our nursing care
    delivery in the medical treatment facilities. I'm pleased to
    tell you, Senator, in fiscal year 2002, we achieved an 89
    percent fill rate of documented civilian Licensed Practical
    Nurse (LPN) positions. This is an increase of 7 percent and 13
    percent, respectively, from last year.
        In the direct hire authority that the Surgeon General
    talked about earlier, granted to us by Congress, has
    dramatically reduced the length of time it takes from
    recruitment to first day of work from 111 days to a remarkable
    23 days for Registered Nurses. This has resulted in a 50
    percent reduction of unfilled RN positions in our facilities.
        Clearly, we need to continue this approach to civilian RN
    recruitment and we will continue to seek expansion of this
    authority to include LPNs and legislative approval that makes
    direct hire authority permanent.
        Although many of our nurses are deployed or dedicating the
    majority of their time to the support of the global war on
    terrorism, nurses are still actively engaged in other nursing
    activities such as research and education.
        I want to offer my thanks and appreciation to this
    committee for the continued steadfast support of the TriService
    Nursing Research Program (TSNRP). Since 1992, TSNRP has funded
    230 research proposals that have resulted in continued advances
    in nursing practice for the benefit of our soldiers and for
    their family members and for our great retirees.
        I would also like to extend my appreciation to the
    Uniformed Services University of the Health Sciences for their
    continued flexibility and support of the Advanced Practice
    nurses. Adeptly responding to the needs of Federal nursing,
    they have established perioperative nursing as well as a
    doctoral program in nursing, with the first candidates for
    study in each of these programs to begin this summer.
        Our continued partnership is key to maintaining sufficient
    numbers of professional practitioners necessary to support our
    mission. Finally, Senators, the Army Nurse Corps once again
    reaffirms its commitment to recognizing the Bachelor of Science
    degree in nursing as the minimum educational requirement and
    basic entry level for professional nursing practice.

                               PREPARED STATEMENT

        In closing, I assure you that the Army Nurse Corps is
    comprised of professional leaders who are totally committed to
    providing expert nursing care. It has been my honor and it has
    truly been my privilege to lead such a tremendous organization.
    Thank you for this opportunity to present the extraordinary
    contribution made by today's Army nurses.
        [The statement follows:]

           Prepared Statement of Brigadier General William T. Bester

        Mr. Chairman and distinguished members of the committee, I am
    Brigadier General William T. Bester, Commanding General, United States
    Army Center for Health Promotion and Preventive Medicine and Chief,
    Army Nurse Corps. Thank you for this opportunity to update you on the
    state of the Army Nurse Corps. In the past year, the Army Nurse Corps
    has again demonstrated our flexibility and determination to remain
    ready to serve our great Nation during challenging and difficult times.
        The effects of the National nursing shortage continue to impact the
    ability of the Army Nurse Corps to attract and retain nurses. The
    decline in nursing school enrollments over the past several years,
    coupled with the increasing average age of a registered nurse, clearly
    dictate the need to focus recruitment and retention efforts towards
    enhancing the image of nursing as a worthwhile and rewarding long-term
    career choice. We are encouraged by the fact that for the first time in
    over six years, enrollment in baccalaureate nursing programs in 2001
    increased. However, since education resources are limited, there is
    still a need for such initiatives as the Nurse Reinvestment Act and we
    applaud the support that you have provided towards this effort. It will
    be critical that we continue to develop programs of this magnitude.
        We are well aware of the impact that the decreased nursing
    personnel pool has had on our civilian nurse recruitment and retention.
    Civilian nurses now comprise over 60 percent of our total nurse
    workforce and we have worked diligently to streamline hiring practices,
    improve compensation packages and enhance professional growth and
    development in order to attract the types of nurses who will commit to
    the military healthcare system. I am pleased to report to you that we
    have experienced some success in our civilian recruitment actions over
    the past year. In fiscal year 2002, we achieved an 89 percent fill rate
    of documented civilian Registered Nurse positions and an 83 percent
    fill rate of documented civilian Licensed Practical Nurse positions.
    This is an increase of 7 percent and 13 percent, respectively, from the
    previous year. The Direct Hire Authority granted to us has dramatically
    reduced the length of time it takes from recruitment to first day of
    work from 111 days to a remarkable 23 days for Registered Nurses. This
    initiative has resulted in a 50 percent reduction of unfilled RN
    positions in our Medical Treatment Facilities. Clearly, we need to
    continue this type of long-term approach to civilian RN recruitment.
        The Army Nurse Corps is actively engaged in a DOD effort to
    simplify and streamline civilian personnel requirements. The intent is
    to recruit, compensate, and promote civilian nursing personnel with the
    flexibility necessary to respond to the rapidly changing civilian
    market. We have clearly identified our needs related to the payment of
    these greatly needed premium, on-call, overtime and Baylor Plan pay
    strategies and are very ready to implement these strategies when the
    Defense Finance Accounting Service (DFAS) support is available. In
    addition, we are progressing with the clinical education template
    currently required in the legislation in order to ensure consistency of
    hiring practices. We strongly value continuing professional development
    of our civilian nurse workforce and are reenergizing our already
    established Civilian Nurse Tuition Assistance Program to enhance
    retention and symbolize our trust in the civilian nurse workforce
    abilities and commitment to taking care of soldiers. We firmly believe
    that enhancing job opportunities for our military family members is
    consistent with the Army's overall goal to support the well being of
    our soldiers and families.
        We are also well aware of the impact of the decreased nursing pool
    on our military nurse recruiting efforts. The Army Nurse Corps is still
    below our budgeted end-strength of 3,381. We ended fiscal year 2002 at
    a strength of 3,152, a deficit of 229. We have taken aggressive
    measures to strengthen our position in both the Army Reserve Officer
    Training Corps (AROTC) and U.S. Army Recruiting Command (USAREC)
    recruiting markets. We have re-established targets in the AROTC program
    and expanded school participation in our AROTC scholarship program by
    four-fold. As a direct result of the 2003 National Defense
    Authorization Act, we are actively pursuing an increase in the
    accession bonus beginning in fiscal year 2005. This year, we were
    successful in offering a Critical Skills Retention Bonus (CSRB) to 54
    percent of our Nurse Anesthetists and 76 percent of our Operating Room
    nurses. This spring, we are implementing the Health Professions Loan
    Repayment Program (HPLRP) for newly recruited nurses as well as to our
    cornerstone company grade Army Nurse Corps officers who are serving in
    their first eight years of commissioned service. The HPLRP and
    accession programs, in conjunction with our already established and
    robust professional and clinical education programs, will allow us to
    consistently reinforce the value of our Army Nurses through the
    critical early career timeframe. Finally, we have been extremely
    successful in providing a solid progression program for our enlisted
    personnel to obtain their baccalaureate nursing degree through the Army
    Enlisted Commissioning Program. This year alone, we will sponsor 85
    enlisted soldiers to complete their nursing education to become
    Registered Nurses and subsequently, Army Nurse Corps officers. Since
    last year, we have increased the number of available slots for soldiers
    qualified for this program by 30, a 55 percent increase. I want to
    emphasize that this program provides us with nurses who already possess
    the strong soldiering and leadership skills that we foster and desire
    in Army Nurses.
        Retention of our junior nurses is extremely important to us. We
    continue to closely monitor the primary reasons that our company grade
    officers leave the Service and have determined that the reasons are
    primarily related to quality of life, work schedules and compensation.
    We have taken this feedback and used it as the basis to address the
    focus of our senior leadership efforts at the local level. Compensation
    strategies such as the Critical Skills Retention Bonus (CSRB) and the
    Health Professions Loan Repayment Program (HPLRP) have been paramount
    in our effort to recognize individuals for their tremendous efforts and
    sacrifices. The Army Nurse Corps continues to sponsor significant
    numbers of nurses each year to pursue advanced nursing education in a
    variety of specialty courses as well as in masters and doctoral
    programs. We are all working to improve the practice environment,
    foster mentoring relationships, and ensure equitable distribution of
    the workload among our nurses. We intend to aggressively capitalize on
    all financial, educational and benefit packages available to recruit
    and retain dedicated officers.
        The Army Nurse Corps continues to answer the call to support the
    Nation's War on Terrorism as well as other contingency missions. In
    fiscal year 2002, 1,001 Army Nurses deployed to over 20 countries
    totaling 25,133 man-days. Since October 2002, the deployment pace is
    swifter than ever, with 1,162 Army Nurses deployed totaling 80,083 man-
    days. Our nurses continue to provide expert nursing care on Forward
    Surgical Teams (FSTs), which provide far forward immediate surgery
    capability that enables patients to withstand further evacuation to
    more definitive care. Currently, nurses are deployed in multiple FSTs
    in support of Operation Enduring Freedom, Operation Iraqi Freedom, and
    other missions worldwide. The 250th FST was the first to deploy to
    Kandahar, Afghanistan in direct support of the Combined Special
    Operations Task Force South-Forward and executed medical operations
    under the most austere combat conditions. The 274th FST provided
    surgical coverage of northern Afghanistan and provided care to more
    than 500 patients to include over 200 combat casualties. In March 2002,
    the 274th FST received and treated all combat casualties sustained
    during Operation Anaconda and provided extensive orthopedic and
    surgical care for the detainees held at the Bagram Airbase. Each of
    these outstanding forward surgical elements contains a substantial
    nurse element that is critical to the team's success.
        The 86th Combat Support Hospital (CSH) is now supporting Operation
    Iraqi Freedom and is providing far forward medical care in the most
    austere conditions for both coalition forces and local nationals. The
    full impact of their support on the numbers of casualties cared for by
    these fine soldiers is not known at this time. Always ready, this same
    Combat Support Hospital was also the most forwardly deployed Level III
    Combat Support Hospital in Central Asia to support Operation Enduring
    Freedom. At that time, the personnel in the 86th included Army Nurses
    from Fort Campbell, Kentucky with augmentation by Army Nurses from Fort
    Bragg, North Carolina, Fort Belvoir, Virginia, Fort Rucker, Alabama and
    West Point, New York. This hospital, consisting of a 2-bed operating
    room, 7-bed emergency medical treatment section, and 24-bed inpatient
    area, provided care for 63 combat related casualties as well as the
    care for the acute health care needs of the deployed forces.
        In the past year, we provided expert nursing care with the 28th
    Combat Support Hospital from Fort Bragg, North Carolina in support of
    Task Force Med Eagle (TFME) in Bosnia-Herzegovina. In the same theater,
    the 249th General Hospital conducted Medical Civil Action Programs
    (MEDCAPs) to improve relations by providing basic medical screenings
    and care to 130 local national personnel within the Multinational
    Division-North Area of Operations in Bosnia. In addition, nursing
    personnel provide support to an ongoing multidisciplinary health
    promotion program for soldiers and civilian employees in the Task
    Force. Flexible and ready, some of these same units are now providing
    the needed support to the soldiers currently in Southwest Asia.
        The Army Nurse Corps continues to strengthen our commitment to
    integrating our Active and Reserve Components. Last year, the 212th
    Mobile Army Surgical Hospital from Miesau, Germany teamed with the
    5501st United States Army Hospital from San Antonio, Texas to conduct
    maneuvers at the Combat Maneuver Training Center (CMTC) in Hohenfels,
    Germany. This was the first time that level III health care support was
    incorporated directly into a CMTC rotation. This is just one example of
    many where Active and Reserve Army Nurses join forces to provide expert
    patient care and superb clinical leadership.
        In light of current world events, we have imbedded training on the
    personal and medical response to the chemical, biological, radiation,
    nuclear and high explosive threat into all our professional nursing and
    military education courses and deployment preparations. I can assure
    you that all Army Nurse Corps Officers will continue to be ready to
    meet any deployment challenge in any environment that they may
    encounter.
        It is a pleasure to be able to highlight good news stories about
    nurses at the many medical treatment facilities around the world. As a
    result of a productive collaboration among the Department of Defense,
    the Army Medical Department's Outcomes Management Section, and the
    Veteran's Health Affairs Quality Assurance and Performance Improvement
    Office, we implemented an additional nine Clinical Practice Guidelines
    (CPGs) in 2002. The practice guidelines relate to the care of Low Back
    Pain, Asthma, Diabetes, Tobacco Use Cessation, Post Deployment Health,
    Post-operative Pain, Major Depressive Disorder, Substance Abuse
    Disorder & Uncomplicated Pregnancy. These compliment the seven other
    Practice Guidelines already in place and demonstrate the unprecedented
    collaboration between clinicians and researchers working at Army, Air
    Force, Navy and Veteran's Affairs facilities. Clinical nurse
    specialists, nurse practitioners, nurse midwives, nurse educators,
    community health nurses, and staff nurses are intimately involved in
    both the development and the implementation of the guidelines. These
    guidelines may be applied to patient care in both the peacetime and
    combat hospital settings and aim to decrease variation in the
    management of specific conditions, thereby improving quality of care. A
    notable success associated with the implementation of the CPGs includes
    the fact that none of the 28 Army Medical Treatment Facilities surveyed
    by the Joint Commission on Accreditation of Healthcare Organizations
    (JCAHO) have had any findings related to the new JCAHO CPG
    implementation mandates.
        Nurses have embraced new technology in support of patient care. The
    Great Plains Regional Medical Command and Brooke Army Medical Center
    nurse practitioners are currently testing a new composite computer
    software program called MEDBASE that will allow Commanders at all
    levels to have visibility of the data necessary to ensure soldier
    medical readiness. This database will also facilitate electronic
    medical record documentation, soldier profiling and tracking, worldwide
    immunization tracking, electronic health and wellness documentation,
    procedure and diagnostic coding, and numerous practical medical
    readiness reports for all levels of the military system. This tool,
    designed to interface with current and programmed DOD information
    technology systems, has incredible potential to conserve personnel and
    fiscal resources and will directly impact our performance improvement
    initiatives.
        MAJ Laura Favand and MAJ Lisa Lehning, Army Nurse Corps Officers
    from William Beaumont Army Medical Center in El Paso, Texas and Brooke
    Army Medical Center in San Antonio, Texas, respectively, assisted in
    the development of another valuable data management tool. The Combat
    Trauma Registry was employed at Landstuhl, Germany and contains data
    entered on soldiers injured in Afghanistan in support of Operation
    Enduring Freedom. The purpose of the Combat Trauma Registry is to
    examine the feasibility of identifying, collecting, and reporting
    combat trauma care information from the point of injury to return to
    duty, discharge from active duty, or death from combat casualties. The
    data collected in this registry will be used as input into the planning
    factors used to develop combat health support models such as casualty
    estimates, personnel at risk, and injury types for future military
    operations. This is the first attempt to collect this type of data
    since the Vietnam conflict.
        Army Nurses at Walter Reed Army Medical Center are supporting
    disaster and bioterrorism preparedness with the implementation of Phase
    I of the DOD plan for smallpox vaccinations. Phase I includes the
    vaccination of the military's smallpox response teams and hospital and
    clinic teams located in military hospitals. Walter Reed personnel
    prepared and conducted a two-day conference for their staff and
    personnel, providing smallpox education and training for people who are
    to be vaccinated and for those administering the vaccine. As Federal
    agencies reorganize and lines of authority are adjusted in the newly
    formed Department of Homeland Security, it is clear that nurses across
    all specialties will play a significant role in the overall medical
    disaster response strategy.
        Army Nurses are proud to be an integral part of the transformation
    of the new 91W Healthcare Specialist Military Occupational Specialty.
    We are imbedded in the training units as leaders and educators. In
    fact, there are thirteen Army Nurse Corps officers directly assigned to
    the training battalion at Fort Sam Houston, TX in which each new 91W
    soldier is initially trained. In addition, Army Nurse Corps officers
    were directly responsible for developing and implementing the hospital
    based clinical training experience that is part of the sixteen-week 91W
    initial entry training. Army Nurse Corps officers also serve as
    preceptors and mentors for these soldiers throughout their initial
    entry training as well as the sustainment training programs in place
    across the Army. I want to share with you my impression of these
    soldiers. Simply put, they are the best-trained combat medics in our
    history and we are proud to serve side by side with these exceptional
    soldiers. We will continue to steadfastly support all aspects of this
    transformation until it is completed.
        Army nurses continue to be at the forefront of nursing research. We
    aggressively pursue evidence-based research focusing on critical
    military healthcare problems that nurses can positively impact. Last
    year, I shared with you our five primary research focus areas: the
    identification of specialized clinical skill competency training and
    sustainment requirements; issues related to pre-, intra-, and post-
    deployment; issues related to the nursing care of our beneficiaries in
    garrison; nurse staffing requirements and their relationship to patient
    outcomes; and finally, issues related to civilian and military nurse
    retention. Today I will share with you our progress and accomplishments
    in these five priority areas.
        To insure that our combat medics are trained in critical life-
    saving skills and ever ready for battle, they are required to become
    nationally certified as Emergency Medical Technicians. The nurse
    researchers at Madigan Army Medical Center are assessing the impact of
    a computer-based three-dimensional virtual Emergency Medical Technician
    training simulator on overall educational outcomes of students and the
    resulting national certification pass rates. To date, one hundred
    thirteen 91W students are enrolled in this study. This adjunct to our
    educational design could result in improved pass rates and related cost
    savings as soldiers will be better prepared to pass the national
    certification examination the first time taken.
        The recent increase in our deployment tempo has kept all our
    medical personnel busy. Nurse researchers at Walter Reed Army Medical
    Center are engaged in a study to identify the physiologic,
    psychosocial, work and lifestyle factors of Army Medical Department
    soldiers who have experienced musculoskeletal injuries. They will
    examine how these factors may be associated with the occurrence of
    these injuries. The results of this study will help us devise
    strategies targeted at reducing the frequency of these injuries in
    these soldiers. In addition, students in our Nursing Anesthesia
    graduate program have studied the safety and efficacy regarding the use
    of an oxygen concentrator in the field environment. Use of this device
    will allow for the delivery of required oxygen to patients in the field
    and eliminate the need to transport heavy oxygen bottles. Army Nurse
    researchers are also conducting a large-scale study to identify the
    ethical issues nurses encounter in caring for patients in deployed and
    garrison-based military hospitals. Early results from this study
    indicate that our military and civilian nurses most often encounter the
    challenges of staffing patterns that limit quality of nursing care,
    protecting patient rights to quality nursing care and staffing patterns
    that limit patient access to nursing care. The intent of this study is
    to develop pre-emptive educational programs that will prepare nurses in
    a variety of military settings to best manage the ethical challenges
    presented to them. All of the studies mentioned are truly targeted at
    improving nursing care for soldiers in all our practice environments.
        Nursing research consistently examines the potential of new
    technology on practice. Nurse researchers at Walter Reed Army Medical
    Center are examining the use of telenursing for our remote, home-based
    patients who are in need of cardiac rehabilitation following coronary
    artery bypass graft surgery. This program will allow nurses to
    ``virtually'' visit patients up to three times per week to follow both
    the physiological progress of the patient such as vital signs, surgical
    incision assessment, and electrocardiograph analysis as well as provide
    educational interventions that the home-bound patient might otherwise
    not receive. The nurse researchers at Brooke Army Medical Center have
    designed a study to decrease ventilator-associated pneumonia in
    patients at Brooke Army Medical Center and at Wilford Hall Air Force
    Medical Center. This study has dramatic potential in both human
    outcomes as well as cost outcomes by determining care criteria that
    could decrease the number of days that a person is on a ventilator.
        Nurse researchers at Madigan and Walter Reed Army Medical Centers
    completed the Army Nursing Outcomes Database study initiated in 2001
    and have extended the concept to include medical treatment facilities
    from both the Air Force and Navy. This Tri-Service project is dedicated
    to the collection of standardized and high quality data related to the
    effects of nurse staffing and patient outcomes. The expanded Military
    Nursing Outcomes Database will assess data integrity, examine new
    indicators of quality nursing care and will add a dimension of the
    rapidity of patient movement into and out of the hospital. The Army
    Nurse Corps also continues to collect data from nurses who have chosen
    to leave the military in order to identify those issues that we can
    positively impact upon with the goal of retaining as many quality Nurse
    Corps officers as possible. This ongoing assessment indicates that
    nurses leave the military in order to pursue life goals such as having
    a family and stabilizing their location. We have taken this feedback
    seriously and are striving to address the retention needs of our nurses
    through the initiatives and incentives outlined earlier in this
    testimony.
        In conclusion, Army nurse researchers continue to seek the
    solutions to the important challenges facing military healthcare. The
    Army Nurse Corps continues to identify areas for collaboration with
    researchers in the Navy and the Air Force. Since 1992, the TriService
    Nursing Research Program has funded 230 research proposals and during
    fiscal year 2002, seventeen military nurse researchers received funding
    in areas that include nursing practice during operations other than
    war, air evacuation, fitness among National Guard personnel, sexually
    transmitted disease and pregnancy prevention during deployment, and
    educational strategies for chemical warfare. The Tri-Service Nursing
    Research Program continues to offer a breadth of supportive activities
    such as workshops and symposiums to promote, encourage and develop both
    our novice and seasoned researchers. It is clearly evident by the types
    of proposals submitted that nursing research is, and will continue to
    be, focused on relevant and timely research problems that necessitate
    solid outcome data. Your continued support of the TriService Nursing
    Research Program is truly appreciated and has resulted in continued
    advances in nursing practice for the benefit of our soldiers, their
    family members, and our deserving retiree population.
        I would like to extend my appreciation to the leadership and
    faculty of the Uniformed Services University of the Health Sciences
    (USUHS) for their continued support in the training of our Certified
    Registered Nurse Anesthetists and Family Nurse Practitioners. USUHS
    continues to provide us with professional nursing graduates who have a
    near perfect pass rate for national certification, easily exceeding the
    national standard. Adeptly responding to the needs of Federal nursing,
    USUHS established this past year the Clinical Nurse Specialist Program
    in Perioperative Nursing as well as the foundation for the Doctoral
    Program in Nursing, with the first candidates for study in each program
    to begin this summer. USUHS continues to refine and evolve strong
    curricula that have three focused research and practice areas including
    Operational Readiness in Changing Environments, Population Health and
    Outcomes, and Clinical Decision-Making in the Federal Health Care
    System. In addition, they have placed cross cutting emphasis on patient
    safety, ethics, force protection, and international health and
    leadership. The curricula are interwoven with the necessary military
    applications essential for the response to any global challenge, such
    as scenarios involving deployment of weapons of mass destruction,
    disaster or humanitarian assistance, and contingencies other than war.
    USUHS continues to be flexible and responsive to our Federal Nursing
    needs and our continued partnership is key to maintaining sufficient
    numbers of professional practitioners necessary to support our mission.
        Finally Senators, the Army Nurse Corps once again reaffirms its
    commitment to recognizing the Bachelor of Science degree in Nursing
    (BSN) as the minimum educational requirement and basic entry level for
    professional nursing practice. We appreciate your continued support of
    this endeavor and your commitment to the educational advancement of all
    military nurses. We continue to be resolute in meeting the challenges
    we face today and are ready and determined to meet the uncertain
    challenges of tomorrow. We will continue with a sustained focus on
    readiness, expert clinical practice, professionalism, leadership and
    the unfailing commitment to our Nation that has been the hallmark of
    our organization for over 102 years. Thank you for the opportunity to
    present the extraordinary contributions made by Army Nurses.

        Senator Stevens. Thank you, General. Admiral Lescavage.

    STATEMENT OF REAR ADMIRAL NANCY J. LESCAVAGE, NURSE
                CORPS, UNITED STATES NAVY, DIRECTOR, NAVY
                NURSE CORPS
        Admiral Lescavage. Good afternoon, Chairman Stevens,
    Senator Inouye. I am Rear Admiral Nancy Lescavage, the 20th
    Director of the Navy Nurse Corps and Commander of the recently
    established Naval Medical Education and Training Command. It is
    indeed an honor and a privilege to represent a total of 5,000
    active duty and Reserve Nurse Corps officers. I welcome this
    opportunity to testify regarding the status of the Navy Nurse
    Corps.
        The Navy Nurse Corps is ``living'' the mission of Navy
    medicine today providing preeminent health care in worldwide
    missions. When called to duty recently, our Navy nurses readily
    packed their seabags and moved forward. Meanwhile, our
    remaining military and civilian nurses back home continued to
    be the backbone in promoting, protecting and restoring the
    health of all entrusted to our care, including those heroes who
    have gone before us in harm's way.
        Not a beat was missed in our mission. This year, to chart
    the course, we have revised our strategic plan which now
    parallels Navy medicine's goals of being ready, caring about
    our people, delivering that health care benefit to all, and
    promoting best practices.
        Through our collective leadership, I'm happy to tell you we
    are also united with our Federal nursing partners to advance
    professional nursing practice. What a thrill that is to be one
    team with my fellow colleagues.
        I will now speak to each of our goals and address the
    status of professional nursing in Navy medicine relative to the
    national nursing shortage. First of all, to stand ready. Our
    mission is exemplified in our continuous commitment to
    readiness in peacetime, wartime, humanitarian and other
    contingency missions.
        Augmenting our 70 Navy nurses who are routinely assigned to
    operational billets, we have deployed a total of approximately
    600 Navy nurses in support of Operation Iraqi Freedom on a
    variety of platforms. They have been and remain assigned to
    forward resuscitative surgical support teams, fleet surgical
    teams, Marine Corps medical battalions, Marine Corps force
    service support groups, our fleet hospitals, our casualty
    receiving and treatment ships, and our hospital ships such as
    the U.S.N.S. Comfort currently deployed. Part of that crew will
    be returning today.
        And they also serve aboard our aircraft carriers. Eighty-
    nine out of 140 nurse anesthetists have been deployed and are
    serving us well. We have also recalled approximately 400
    Reserve Navy nurses to support our operational missions and the
    continuum of care in our military treatment facilities. You
    see, we really do truly work as a team, both active duty and
    Reserve.
        During this past year, there have been an additional 43
    Navy nurses involved in other missions, such as at Camp X-Ray
    in Guantanamo Bay, Cuba, Operation Provide Hope and Operation
    Enduring Freedom. Almost 400 Nurse Corps officers have also
    been involved in various training exercises in the past year,
    such as in our fleet hospital training, fleet hospital
    operational readiness evaluation, and Exercise Battle Griffin.
        Strengthening our emergency preparedness posture, Navy
    nurses now serve in vital leadership roles in Navy medicine's
    Office of Homeland Security, the Department of Defense smallpox
    response team, the Marine Corps chem/bio incident response
    team, and in command emergency preparedness offices. In meeting
    our readiness mission in all operational environments, training
    opportunities occur across Federal, as well as civilian
    agencies. As an example, this past fall, the Navy medicine's
    trauma training program rotated its first class through the Los
    Angeles County University of Southern California Medical
    Center, one of the Nation's top level one trauma centers. We
    successfully trained many Nurse Corps officers by enhancing
    their combat trauma skills and medical readiness, and they do
    that along with their respective platform teams, so they truly
    are ready for trauma cases.
        In addition, five of our Navy medical treatment facilities
    have established agreements with local trauma centers, training
    numerous emergency and critical care nurses, as well as our
    operating room nurses. Collaborating with the Army and the Air
    Force, we have also shared instructors and training
    opportunities to enhance these critical skills.
        Secondly, in caring about our people, we continually strive
    to be recognized as an employer of choice in recruiting,
    training and retaining the right professional nurses. We
    closely monitor the national nursing shortage projections and
    civilian compensation packages and determine the best course
    for us to take in the competitive market.
        The Navy Nurse Corps amazingly continues to meet active
    duty military and civilian recruiting goals and professional
    nursing requirements. We do that through diversified accession
    sources. Those are our pipeline programs, for example, in our
    Reserve Officer Training Corps (ROTC).
        We also do that through pay incentives, graduate education
    and other retention initiatives that address quality of life
    issues, to meet our special needs, such as critical care. And I
    really believe we need more Navy nurses in the mental health
    arena, in midwifery and neonatal nursing. We too are exploring
    the health professional's loan repayment program in those
    areas.
        For our Civil Service nurses who make up a huge part of our
    backbone, recruitment, retention and relocation bonuses are
    used, along with special salary rates and that wonderful
    special hire authority which we can thank you so much for.
        We also had our certified registered nurse anesthetists and
    operating room nurses this year participate in the critical
    skills retention bonus. Ninety percent of our operating room
    nurses who were eligible took that, as well as 70 percent of
    our nurse anesthetists.
        I'd like to highlight our Navy Reserve component. We have
    processed 63 percent of our accession goal of 261 nurses to
    enter the Reserves, maintaining the same pace as we did last
    year. Beneficial incentives in procuring our Reservists in
    critical wartime specialties include an accession bonus for the
    Reserves, as well as loan repayment and stipend programs for
    graduate education. I have noticed through the years that the
    one thing nurses most want is to be greater educated. We are
    now proposing to expand bonus eligibility to new nursing
    graduates. In addition, we are in the initial stages of
    exploring the feasibility of instituting a pipeline scholarship
    program for our Reserve enlisted component, those corpsmen who
    desire to go on to become Navy nurses. And that's similar to
    the pipeline program for our active duty colleagues.
        Through several surveys, graduate education opportunities
    have been cited as one of our most important retention
    initiatives. We now are able to focus all of our scholarship
    training, as Admiral Cowan stated, on master's degrees and
    doctorate degrees based on our operational specialty
    requirements, specific health population needs and staffing
    projections.
        We are sending several of our nurses to the recently
    established perioperative clinical nurse specialist program at
    the Uniform Services University of Health Sciences (USUHS). We
    greatly look forward to the new doctoral program at USUHS, and
    are additionally considering nurse fellowship opportunities in
    such arenas as gerontology, business management and mental
    health.
        This year, we also instituted nursing internship programs
    at our three major medical centers and other naval hospitals
    for all new nursing graduates. The news is good on this as
    well. There have been several hundred military and civilian
    nurses who have completed these programs. These new nurses
    attest to increased self-confidence with clinical practice and
    are eager to assume greater responsibilities.
        Thirdly, delivering that health care benefit. Population
    health management is at the forefront and our Navy nurses are
    actively engaged in various clinical settings through health
    promotion, disease management and case management programs.
    These innovations do four things for us. They expedite a much
    quicker return to full duty for our sailors and Marines. They
    decrease lost work hours, increase productivity, and enhance
    our customer satisfaction. You see the benefits are endless and
    the line really appreciates the return to duty.
        Embracing force health protection, numerous programs have
    been developed to ensure a healthy and fit force such as a
    command preventive health assessment program, nurse managed
    hyperlipidemia clinic at our naval hospital in Rota, Spain, the
    in-garrison rehab platoon program at Camp Pendleton and
    clinical care services, which we call drive-by health care.
    They pull up to the pier in a van and are able to render basic
    primary care to our sailors who have just returned.
        Just as the health and fitness of our military members is
    critical to force readiness, so is the health of our extended
    military family and other eligible beneficiaries. In at least
    four medical treatment facilities, our nurses are leading the
    way in the assessment and management of our patients. Diabetes
    case management has significantly enhanced patient compliance
    with their recommended plan of care. In support of the unique
    needs of seriously ill and terminally ill patients, our first
    Navy palliative care clinic was established at our medical
    center in Portsmouth. Our mother baby clinic provides follow-up
    for high-risk mothers and babies for early detection and
    prevention of complications. Pediatric nurses at our naval
    hospital in Naples liaisoned with the Department of Defense
    school nurses and teachers to collaborate on taking care of
    asthmatic children to prevent asthmatic attacks. This sampling
    of programs demonstrates that Navy nurses indeed are innovative
    and have specialized knowledge that can be applied in any form
    in a military setting.
        Lastly, promoting best health care business practices.
    Nurse Corps officers continue to be strategically placed in
    pivotal roles where they can influence legislation, health care
    policy and delivery systems. We have active duty and Reserve
    Nurse Corps officers in executive roles, including our current
    Navy's Deputy Surgeon General and many others such as
    commanding officers, executive officers and officers in charge.
    Personally, I am honored to have been chosen to lead the charge
    in revolutionizing Navy medicine's education and training.
        Always striving for nursing excellence, many commands have
    aligned their performance metrics with the American Nurse's
    Association magnet recognition program and Malcolm Baldrige
    criteria for excellence. These standards provide the framework
    for sustained quality patient care. Our goal is to complete our
    first application which is at our medical center in Portsmouth,
    Virginia, and have that completed by next year.
        Nursing research has become our cornerstone for excellence
    in all settings, from military treatment facilities to the
    operational environment. Our revised Navy Nurse Corps research
    plan provides the foundation and scope of military nursing
    research ranging from the utilization of doctorally prepared
    Nurse Corps officers in key leadership positions to their
    responsibilities in leading evidence-based practice studies.
        With authority and influence, our Navy nurse researchers
    now create health policies and delivery systems and are right
    at the tip of the spear in leading the way in our major medical
    treatment facilities. We were honored to have one of our nurse
    anesthetists named researcher of the year by the American
    Association of Nurse Anesthetists.
        We do as well appreciate your support of the TriService
    nursing research program funding. I would like to highlight
    just a little bit of our research programs out there. A program
    involving the studies examined Navy recruits at risk for
    depression, after undergoing the bootstrap intervention
    program. This is at Great Lakes. Preliminary results indicate a
    potential for decreased attrition, improved recruit
    performance, and an identified cost-effective method of recruit
    retention.
        On the cutting edge of molecular research, a team led by a
    Navy nurse is investigating the potential use of a readily
    accessible medication to be used in the field to treat
    respiratory problems. We also have a multidisciplinary team
    with nurses in it working on diabetic care and that has
    enhanced the patient's ability to achieve the mastery of self-
    care and live independently with potential savings of $7,000 to
    $42,000 per patient a year.
        In closing, I appreciate your tremendous support of
    legislative initiatives and the opportunity to share our
    accomplishments. In our 95th year of the Corps, our Navy nurses
    are very proud of our heritage and professional practice as
    innovators, change agents and leaders.
        In my other role as Commander, Navy Medical Education and
    Training Command, I fully support the philosophy that
    continuous learning and guidance for all health care
    professionals is integral to what we do in meeting our
    peacetime and wartime missions.
        Regarding lessons learned, Chairman Stevens, my command
    with education and training has a command under it called the
    Naval Operational Medical Institute. Several years ago, we did
    come up with the lessons learned program and we are very
    excited about that. That has already been launched, which
    really has value in learning from what has just occurred.

                               PREPARED STATEMENT

        I look forward to continuing to work with you and my
    colleagues during my tenure as the Director of the Navy Nurse
    Corps. Thank you for this great honor and privilege. In my
    view, there is no better job.
        [The statement follows:]

             Prepared Statement of Rear Admiral Nancy J. Lescavage

        Good morning, Chairman Stevens, Senator Inouye and distinguished
    members of the Committee. I am Rear Admiral Nancy Lescavage, Director
    of the Navy Nurse Corps and Commander of the recently established Naval
    Medical Education and Training Command. It is an honor and a privilege
    to represent a total of 5,000 Active Duty and Reserve Navy Nurse Corps
    officers. I welcome this opportunity to testify regarding our
    achievements and issues.
        The Navy Nurse Corps is ``living'' the mission of Navy Medicine
    today and fulfilling the vision of the Navy Nurse Corps of preeminent
    health care in executing worldwide missions. When called to duty, Navy
    Nurses readily ``packed their seabags'' and moved forward, with dynamic
    leadership, clinical expertise, teamwork, perseverance and patience.
    Meanwhile, military and civilian nurses who remained at the homefront
    continue to be the backbone and structure in promoting, protecting and
    restoring the health of all entrusted to our care.
        This year, to ``chart the course,'' we have revised our Strategic
    Plan, which parallels Navy Medicine's goals of Readiness, People, the
    Health Benefit, and Best Health Care Business Practices. Through
    collective leadership, we have also united with our federal nursing
    partners to advance professional nursing practice.
        I will now speak to each of our goals in the Navy Nurse Corps
    Strategic Plan and address the status of professional nursing in Navy
    Medicine relative to the national nursing shortage.

                                   READINESS

        Our mission to promote, protect and restore the health of all
    entrusted to our care is fully actualized through our continuous
    commitment to readiness in peacetime, wartime, humanitarian and other
    contingency missions. Both active duty and reserve components have
    exemplified unselfish devotion to duty, working side-by-side in the
    continental United States and abroad in a multitude of care delivery
    environments.

    Readiness and Contingency Operations
        Augmenting our seventy Navy Nurses in operational billets, we have
    deployed a total of approximately six hundred nurses in support of
    Operation Iraqi Freedom on a variety of platforms, such as Marine Corps
    Force Service Support Groups, Fleet Hospitals, Casual Receiving
    Treatment Ships, Hospital Ships and with Command Headquarters staff to
    plan and operationalize our health care delivery system. Eighty-nine
    out of a total of one hundred and forty Certified Registered Nurse
    Anesthetists (CRNA) alone have been deployed. We have also recalled
    approximately four hundred reserve nurses to support our operational
    missions and the continuum of care in our military treatment
    facilities. During this past year, there have been an additional forty-
    three nurses involved in other missions, including Camp X-Ray at
    Guantanamo Bay, Cuba, Operation Provide Hope and Operation Enduring
    Freedom. Almost four hundred Nurse Corps officers have also been
    involved in various exercises in the past year such as Fleet Hospital
    Field Training, Fleet Hospital Operational Readiness Evaluation, and
    Exercise Battle Griffin.

    Homeland Security
        Strengthening our emergency preparedness posture, Navy Nurses serve
    in vital leadership roles in Navy Medicine's Office of Homeland
    Security, the Department of Defense Smallpox Epidemiological Emergency
    Response Team, the Marine Corps Chemical-Biological Incident Response
    Force and in command Emergency Preparedness Offices. Involvement in key
    initiatives to execute our Force Health Protection mission under any
    circumstance include: multiple training programs; military-civilian
    partnerships with U.S. hospitals; innovative site visits to identify
    vulnerabilities and exercise command emergency preparedness plans; and
    development of disaster response curriculum with other federal
    agencies.

    Readiness Training
        In meeting our readiness mission in all operational environments,
    training opportunities are collectively optimized across federal and
    civilian agencies. Last summer, Navy Medicine's Trauma Training Program
    rotated its first class through the Los Angeles County/University of
    Southern California Medical Center, one of the nation's finest Level I
    Trauma Centers. We successfully trained many Nurse Corps officers by
    enhancing their combat trauma skills and medical readiness with their
    respective platform teams, the Forward Resuscitative Surgical Support
    or Fleet Surgical Teams. In light of recent events and the national
    focus on homeland security and terrorism, the curriculum has added
    treatment of casualties under these stressors, as well as conventional
    battle injuries.
        Seeking to expand training opportunities for nurses assigned to
    other operational platforms, five military treatment facilities have
    established agreements with local trauma centers, training over fifty
    emergency and critical care nurses through didactic and clinical
    experiences. Collaborating with the Army and Air Force, we have shared
    instructors and training opportunities in support of critical skills
    enhancement at the Army Medical Center in Landstuhl, Germany; Wilford
    Hall Medical Center in San Antonio, Texas; the Critical Care Air
    Transport Team Course at Brooks Air Force Base in San Antonio to name a
    few facilities. In addition, Navy Nurses at the Naval Hospital in Rota,
    Spain are involved in training Embassy, Department of State and foreign
    military physicians and nurses.

                                     PEOPLE

        We continually strive to be recognized as an employer of choice in
    recruiting, training, and retaining the right professionals. To attain
    our prestigious standing, we closely monitor national nursing shortage
    projections and civilian compensation packages and determine the best
    course for us to take in the competitive market.

    National Nursing Shortage
        A 2002 study conducted by the Health Resources and Service
    Administration predicted that the national nursing shortage will
    experience a deficit of over 275,000 nurses by 2010, based on the
    dwindling supply of registered nurses and the increasing demand for
    their clinical expertise. A report by the American Association of
    Critical Care Nurses, cited factors impacting the nursing work force
    supply including the declining number of nursing school graduates, job
    dissatisfaction, and inadequate compensation. We continuously monitor
    each of these factors because the strength of our nursing work force
    can best be maintained through a blend of counter initiatives to these
    dissatisfiers.

    Recruitment and Retention Initiatives

                 FISCAL YEAR 2002 ACCESSION SOURCES: ACTIVE DUTY
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Direct Procurement......................................              77
    Reserve Recall..........................................              15
    Nurse Candidate Program.................................              62
    Naval Reserve Officer Training Program..................              52
    Medical Enlisted Commissioning Program..................              42
    Other...................................................               5
    ------------------------------------------------------------------------

        The Navy Nurse Corps amazingly continues to meet military and
    civilian recruiting goals and professional nursing requirements through
    diversified accession sources, pay incentives, graduate education and
    training programs, and other retention initiatives that address quality
    of life and practice satisfaction. The increase of the maximum
    allowable compensation amount for the Certified Registered Nurse
    Anesthetist Incentive Special Pay (CRNA ISP) and the Nurse Accession
    Bonus (NAB) in the Fiscal Year 2003 National Defense Authorization Act
    will further enhance our competitive edge in the nursing market. To
    meet specialty needs, such as critical care, mental health, midwifery
    and neonatal nursing, we are exploring the Health Professions Loan
    Repayment Program. Successful recruitment and retention tools have been
    the NAB, CRNA ISP, Board Certification Pay and the recent Critical
    Skills Retention Bonus for our uniformed members. For our civil service
    nurses, recruitment, retention and relocation bonuses; special salary
    rates; and Special Hire Authority have significantly decreased our
    vacancy rates in several of our facilities. All of these pay
    initiatives will become even more critical in the future years to meet
    our wartime and peacetime missions and maintain authorized endstrength.
        Now, I'd like to highlight our Navy Nurse Corps, Reserve Component.
    We have processed sixty-eight percent of our fiscal year 2003 accession
    goal of two hundred and sixty-one nurses, maintaining the same pace as
    last year. Beneficial incentives in procuring our reservists in
    critical wartime specialties include: the accession bonus, loan
    repayment and stipend programs for graduate education. To meet our
    contributory support mission, we are proposing to expand bonus
    eligibility to new nursing graduates. In addition, we are in the
    initial stages of exploring the feasibility of instituting a pipeline
    scholarship program for the reserve enlisted component similar to those
    given to our active duty colleagues.

    Education and Training Initiatives
        Since graduate education opportunities have been cited as one of
    our most important retention initiatives, we constantly evaluate our
    patient care requirements to annually update our Duty Under Instruction
    Scholarship Plan. We now focus our training on Master's Degrees,
    Doctoral Programs, and fellowships based on operational and specialty
    requirements, specific health population needs and staffing
    projections. This year, we are sending several of our nurses to the
    recently established Perioperative Clinical Nurse Specialist Program at
    the Uniformed Services University of Health Sciences (USUHS). We look
    forward to the new Doctoral Program at USUHS and are currently
    exploring nursing post-graduate fellowship opportunities.
        Nursing internship programs have been initiated at the National
    Naval Medical Centers in Bethesda, Maryland; Portsmouth, Virginia; San
    Diego and the Naval Hospital in Jacksonville, Florida for all new
    nursing graduates. There have been a total of one hundred and forty
    military and civilian nurses who have completed their respective
    programs. Outcome measures for these new nurses attest to increased
    self-confidence with clinical practice and the ability to assume
    greater responsibilities which facilitates their integration into the
    Navy Nurse Corps.
        Navy Nursing supports national initiatives to increase the nursing
    work force numbers in several ways. Our robust scholarship pipeline
    programs help to support nursing school enrollment. Through agreements
    with schools of nursing, military treatment facilities provide varied
    clinical experiences and clinical experts, who may also serve as
    adjunct faculty. We also enhance the image of nursing in the community
    through numerous presentations and approved advertisement campaigns.

                                 HEALTH BENEFIT

        Through an innovative framework of nursing practice, we deliver
    high quality, cost-effective and easily accessible primary and
    preventive health care services. Population health management has been
    at the forefront in various clinical settings through health promotion,
    disease management and case management programs. These innovations
    expedite a much quicker return to full-duty; decrease lost work hours;
    increase productivity and enhance customer satisfaction.

    Healthy and Fit Force
        Embracing Force Health Protection, many programs have been
    developed to ensure a healthy and fit force. For instance, command
    Preventive Health Assessment Programs identify at-risk active duty
    members and promote therapeutic lifestyle changes, such as in the
    Nurse-Managed Hyperlipidemia Clinic at our Naval Hospital in Rota,
    Spain. The In-Garrison Rehabilitation Platoon Program at our Naval
    Hospital in Camp Pendleton, California has expedited the Marines'
    return to training through improved continuity and coordination of all
    aspects of patient care, saving 2,100 convalescent leave days over a
    two-month period. Health Promotion efforts instituted the Choices
    Program at our Naval Air Station in Sigonella, Sicily. This program
    focuses on pregnancy prevention through education, including the use of
    baby simulators to mimic seventy hours of parenthood. Based on a
    comparison study, female Sailors who successfully completed the course
    were three times less likely to get pregnant. Additionally, Family
    Nurse Practitioners continue to provide support to the Fleet through
    pierside clinical services, health promotion programs, and disaster
    training.

    Family Centered Care
        Just as the health and fitness of our military members is critical
    to force readiness, the health of our extended military family and
    other eligible beneficiaries is equally important. Case Management
    targets prevention, early diagnosis, cost effective intervention and
    quality outcomes. In at least four medical treatment facilities,
    Diabetes Case Management has significantly enhanced patient compliance
    with their recommended plan of care. In support of the unique needs of
    seriously-ill and terminally-ill patients, the Palliative Care Project
    at our Naval Medical Center in Portsmouth is the first of its kind in
    Navy Medicine. This program embraces the philosophy of caring during
    the final phase of life. Our Mother Baby Clinics provide follow-up
    visits for high risk mothers and babies for early detection and
    prevention of complications. Pediatric nurses at Naval Hospital Naples
    liaison with Department of Defense school nurses and teachers to
    collaborate on the development of students' Asthma Action Plans based
    on the National Asthma Education & Prevention Guidelines. This
    initiative alone has decreased emergency room visits by seventy-five
    percent and inpatient admissions by eleven percent. Our Nurse-Run
    Primary Care Clinics use approved protocols to increase access and
    incorporate population health concepts. This sampling of the
    aforementioned programs demonstrates that Navy Nurses are innovative
    and have specialized knowledge that can be applied to many forums
    unique to military settings.

                      BEST HEALTH CARE BUSINESS PRACTICES

        Nurse Corps officers continue to be strategically placed in pivotal
    roles where they can influence legislation, health care policy and
    delivery systems. There are active duty and reserve Nurse Corps
    officers in executive roles, including the Deputy Surgeon General,
    Commanding Officers, Executive Officers, Officers in Charge, policy
    makers and many others.

    Strategic Planning and E-technology
        Always striving for nursing excellence, many commands have aligned
    their performance metrics with the American Nurses Association Magnet
    Recognition Program and the Malcolm Baldridge Criteria for Excellence.
    These standards provide the framework for sustained quality patient
    care outcomes, visionary leadership, strategic planning, and
    exceptional staff performance.
        To enhance communication and conduct business, we have strategized
    and marketed clinical outcomes, research findings and business
    practices through video teleconferences, newsletters, conferences, and
    professional journals. Online clinical training sources, Navy e-
    learning modules and nursing practice resources are tested for
    effectiveness and linked through our website or Navy Medicine's
    Telelibrary.

    Research

        ----------------------------------------------------------------

    Navy Nurse Corps Research Plan: Focus on
        Deployment Health
        Developing and Sustaining Competencies
        Recruitment and Retention of the Work Force
        Education and Training Outcomes
        Clinical Resource Management
        Military Clinical Practice

        ----------------------------------------------------------------

        Our revised Navy Nurse Corps Research Plan provides the foundation
    and scope of military nursing research ranging from the utilization of
    doctoral prepared Nurse Corps officers to their responsibilities in
    leading evidenced-based practice studies. Placed in positions of
    authority and influence, our nurse researchers create health policies
    and delivery systems, advance and disseminate scientific knowledge,
    foster nursing excellence, and improve clinical outcomes. In addition,
    our senior nurse executives have promoted a culture of scientific-based
    practice in all settings from military treatment facilities to the
    operational environment. Ongoing nursing research and evidence-based
    practice ultimately effects quality outcome, captures cost
    effectiveness and enhances patient satisfaction. Nursing Research has
    become our cornerstone for excellence. In fact, we have the honor of
    having one of our Navy Nurses named ``Researcher of the Year'' by the
    American Association of Nurse Anesthetists.
        Through your support of TriService Nursing Research Program
    funding, research has been conducted at our three major medical
    centers, our two Recruit Training Centers, several Naval Hospitals, on
    more than six aircraft carriers and collaboratively with our uniformed
    colleagues and more than thirteen universities across the country. Navy
    nursing TSNRP-funded research has been published in numerous
    professional journals.
        I would like to highlight some of the research that has been
    supported by TSNRP funds. A program of research involving three studies
    examined Navy recruits at-risk for depression. After undergoing the
    BOOT STRAP Intervention Program, preliminary results indicated
    potential for decreased attrition, improved recruit performance and an
    identified cost-effective method of recruit retention. On the ``cutting
    edge'' of molecular research, a team led by a Navy nurse is
    investigating the potential use of a readily accessible drug to be used
    in the field to treat military personnel with respiratory problems.
    Through a multidisciplinary team approach to diabetic care, a third
    study focuses on enabling the patient's ability to achieve mastery of
    self-care and live independently, with potential cost savings of
    $7,000-$42,000/patient/year. Participants report more independence and
    greater satisfaction with the disease management intervention.

                                   CONCLUSION

        In closing, I appreciate your tremendous support of legislative
    initiatives and the opportunity to share our accomplishments and issues
    that face the Navy Nurse Corps. Our nurses are very proud of our
    heritage and professional practice as innovators, change agents and
    leaders at all levels from policymaking to program implementation,
    across federal agencies and in all clinical settings. In my other role
    as Commander, Navy Medicine Education and Training Command, I fully
    support the philosophy that continuous learning and guidance for health
    care professionals is integral to enabling uniformed services personnel
    to meet our peacetime and wartime missions. This foundation transcends
    across all levels of practice and the ``Five Rights'' of nursing, which
    involves placing the right person in the right assignment at the right
    time with the right education and the right specialized training.
    Herein lies the basis of our superior performance in promoting,
    protecting and restoring the health of all entrusted to our care.
        I look forward to continuing to work with you during my tenure as
    the Director of the Navy Nurse Corps. Thank you for this great honor
    and privilege.

        Senator Stevens. Thank you, Admiral. General Brannon.

    STATEMENT OF BRIGADIER GENERAL BARBARA BRANNON,
                ASSISTANT SURGEON GENERAL, AIR FORCE
                NURSING SERVICES AND COMMANDER OF MALCOLM
                GROW MEDICAL CENTER
        General Brannon. Chairman Stevens, Senator Inouye. It is
    once again an honor and my great pleasure to present the great
    accomplishments of Air Force nursing. As we vigorously execute
    our mission at home and abroad, Air Force nurses and enlisted
    nursing personnel are meeting the increasing challenges with
    great professionalism and distinction.
        Aeromedical evacuation is the critical link between
    casualties on the battlefield and definitive medical care. Our
    superb medical crews and the advances in medical technology
    make care in the air more sophisticated than ever before.

                       CRITICAL CARE AIR TRANSPORT TEAMS

        Our critical care air transport teams or CCATTs were
    instrumental in the lifesaving airlift of four Afghan children
    who were caught in the crossfire of war. They received
    emergency care from an Army forward surgical team and then were
    treated by our CCATT team during the 2-hour flight to a combat
    Army surgical hospital. The team worked in total darkness using
    night vision goggles until the aircraft was out of danger.
        Medical teams from all three services have worked together
    very smoothly in the operational environment and the patient
    handoffs were virtually seamless. The teamwork has been
    phenomenal. Embedded journalists and continuous network
    coverage have enabled the world to watch this war unfold.
        What the world hasn't seen is our Air Force independent
    duty medical technicians working with pararescue units at the
    battle's forward edge, their critical skills and training and
    special operations have made a lifesaving difference during
    evacuation of the wounded.
        They have employed leading edge technology, and the
    experiences of these brave airmen have set new standards for
    wartime emergency care. While much of our energy has been
    directed toward wartime support, there were also exciting
    initiatives continuing at the home station.

                           POPULATION HEALTH PROGRAMS

        Last year, I talked about our great progress in deploying
    population health programs. We are now engaged in comprehensive
    health care optimization to improve effectiveness and
    efficiency of services in every clinical area. Nurses and
    medical technicians are the backbone of successful
    optimization. Their expanded support to providers enable not
    only treatment of disease, but also stronger focus on
    preventive services and population health management.
        A great example comes from Charleston Air Force Base, South
    Carolina, where primary care teams launched an aggressive
    preventive screening campaign. Capitalizing on technology, they
    use an automated program to generate a letter to patients in
    their birth month inviting them to come for the recommended
    screening. This is very successful and the percent who complete
    screening exceeds national benchmarks by 6 percent.

                          NURSE CORPS GRADE STRUCTURE

        The key to success in nursing is a strong nursing force, a
    force with the right numbers and with the right experience and
    skills. Today, almost 79 percent of our authorizations are in
    the company grade ranks of lieutenant and captain, with only 21
    percent in field grade rank. Having a relatively junior Nurse
    Corps is a growing concern due to the higher acuity of our in-
    patients, complexity of outpatient care and the robust role
    that we play in wartime support.
        To validate a rebalance in our Nurse Corps grade structure
    we initiated a top down grade review last year, that will
    identify by position the skill and experience required. Early
    data shows a significant need to increase our field grade
    authorizations. A by-product of this increase would be a
    greater promotion opportunity, bringing it more in line with
    other Air Force officer specialties. We expect to recommend
    that to our leadership in the very near future.

                                   RECRUITING

        Recruiting continues to be a significant challenge. We
    ended last year with 104 nurses below our authorized end
    strength of 3,974. This was significantly better due to an
    unusually low rate of separations. We continue to implement new
    recruiting strategies both at headquarters and local levels. We
    are currently working with our sister services to fund an
    increased accession bonus for a 4-year commitment and exploring
    the feasibility of accession bonus for nurses who choose a 3-
    year obligation.
        Our recruiting at the Air Force Academy has been extremely
    successful. Six academy seniors have selected nursing for their
    military profession, the largest group since it became an
    option in 1997. They will attend Vanderbilt University School
    of Nursing to earn a 2 year graduate degree.
        We are making great strides in enhancing the strength of
    our nursing care team by capitalizing on the talents of our
    enlisted personnel. We are partnering with the Army Nurse Corps
    to enable our medical technicians to attend a superb licensing
    program at Fort Sam Houston. We hope to increase the capacity
    of the current program to include 60 Air Force medics per year.
        We also recognize the needs to increase our enlisted in
    baccalaureate nursing programs and are exploring stipend
    initiatives similar to those used by the Navy Nurse Corps to
    make it easier for enlisted Nurse Corps to earn a BS, and be
    commissioned in our Nurse Corps. This year 300 nurses
    participated in a research program. Collective work expanded
    evidence-based nursing practices in several clinical and
    operational areas.

                             AIR MEDICAL EVACUATION

        A key study was on air medical evacuation. As we have
    increased the use of cargo aircraft for patient movement, the
    inability to control the temperature in patient areas has
    adversely affected the seriously ill and injured. Researchers
    have now identified patient location priorities and tested the
    effectiveness of improved monitoring and warming devices. Other
    researchers are using the lessons learned from our deployed
    nurses and technicians to validate war readiness training
    programs.
        One of the roles I enjoy most is being an advisor to the
    Uniformed Services University Graduate School of Nursing. They
    have made incredible progress in their first decade. Under
    energetic and visionary leadership, the school continues to
    grow in scope and build programs to meet the emerging needs of
    military nursing.
        Barely 2 years ago we began discussion on the feasibility
    of a master's program in perioperative nursing, and this fall
    the first class begins. The nursing Ph.D. program also went
    from concept to reality in just 1 year and the new curriculum
    will prepare nursing leaders in research and for key roles in
    health care strategy and policy.
        Mr. Chairman, Senator Inouye, thank you for allowing me to
    share just a few of the many activities of Air Force nursing
    with you today. On behalf of the men and women of the nursing
    services, I want to thank you for your tremendous advocacy, not
    only on behalf of military nursing, but also for the
    advancement of nursing across our Nation.

                               PREPARED STATEMENT

        You can trust that Air Force nursing will continue to serve
    in peace and war with the same professionalism, pride and
    patriotism that we have demonstrated for almost 54 years. There
    has never been a better time to be a member of the Air Force
    nursing team. Thank you.
        [The statement follows:]

            Prepared Statement of Brigadier General Barbara Brannon

        Mister Chairman and distinguished members of the committee, I am
    Brigadier General Barbara Brannon, Assistant Surgeon General, Air Force
    Nursing Services and Commander of Malcolm Grow Medical Center at
    Andrews Air Force Base. This is my fourth testimony before this
    esteemed committee and, once again, I am very proud to represent Air
    Force Nursing and delighted to share our accomplishments and challenges
    with you.
        First and foremost, as the Air Force aggressively executes its
    mission in support of our great nation, Air Force medics are keeping
    our people fit and providing outstanding healthcare wherever it is
    needed. Air Force nurses and enlisted nursing personnel are meeting
    increasing commitments and challenges with great professionalism and
    distinction. Today I'd like to review the following: deployments,
    training, force management, optimization and research, as examples of
    these commitments and challenges.
        Over the past year, hundreds of Nursing Service personnel have been
    deployed to every corner of the globe to support the ongoing war on
    terrorism and to provide humanitarian relief. There are more than 400
    nurses and technicians currently deployed in Expeditionary Medical
    Systems (EMEDS) facilities, and hundreds more prepared and awaiting
    orders to deploy. The Air Force continues to rely on an ambitious Air
    Expeditionary Force (AEF) rotation cycle to accomplish deployment
    missions and maintain home station health care services.
        In addition to supporting ongoing commitments to Operation ENDURING
    FREEDOM, IRAQI FREEDOM and other deployments, Air Force medical
    personnel have been called frequently to support humanitarian
    operations throughout the world. Four months ago, twelve nurses and
    technicians from Yokota AB Japan deployed to Guam to assist in federal
    medical support in the aftermath of the devastating Super Typhoon
    Pongsona. Arriving in the middle of the night, they established initial
    medical capability to triage and treat casualties within 24 hours.
        Nurses and technicians also provide humanitarian support through
    their active engagement in the International Health Specialist program.
    They are successfully forging and fostering positive relationships
    around the world. A great example is Major Doreen Smith, recognized as
    the Air Force International Health Specialist of the Year in Europe
    2002 for her outstanding work in Africa. She was instrumental in
    establishing the first Republic of Sierre Leone Armed Forces (RSLAF)
    HIV/AIDS Prevention Committee that developed treatment protocols used
    by field medical technicians to prevent transmission of HIV/AIDS. She
    later implemented training programs in both Ghana and Nigeria.
        Aeromedical evacuation remains a unique Air Force competency and
    our ability to respond to urgent transport requirements is second to
    none. Nurses and technicians were integral members of teams providing
    care during the evacuation of over 2,548 patients from forward areas in
    Operation ENDURING FREEDOM and IRAQI FREEDOM. Aeromedical evacuation is
    the critical link between casualties on the front lines and progressive
    levels of restorative healthcare abroad and in the continental United
    States.
        Captain Michael McCarthy was on a Critical Care Air Transport Team
    mission over hostile territory to rescue two CIA operatives critically
    injured during the prison uprising in Kandahar, Afghanistan. This was
    not a typical mission for our critical care team--the mission was flown
    in blackout conditions due to Special Operations requirements. Captain
    McCarthy's expert critical care saved the life of a casualty whose
    condition deteriorated in-flight. He received the prestigious Dolly
    Vinsant Flight Nurse Award from the Commemorative Air Force for his
    heroic actions on this mission.
        The tremendous accomplishments of our Air Force Flight Nurses have
    also been heralded by civilian flight nurse organizations. The Air and
    Surface Transport Nurses Association (ASTNA) presented the 2002 Matz-
    Mason Award to Captain Greg Rupert, Critical Care Air Transport Team
    Program Coordinator, Lackland AFB, Texas, for exceptional leadership
    and positive impact on flight nursing on a global scale.
        Three years ago the Air Force identified that many medical
    personnel's peacetime healthcare responsibilities did not adequately
    sustain their proficiency in critical wartime skills. Medical career
    field managers and specialty consultants developed the specific
    readiness skills required for each specialty and established training
    intervals to ensure our people were prepared to meet deployment
    requirements. This year, we refined the program based on lessons
    learned in the deployed environment.
        As I briefed last year, the Air Force has entered into partnerships
    with civilian academic medical centers to provide intense training for
    nurses and technicians prior to deployment. The first ``Center for
    Sustainment of Trauma and Readiness Skills'' (CSTARS) was initiated in
    January 2002 at the Shock Trauma Center in Baltimore. This program
    provides our health care personnel with valuable hands-on clinical
    experience that covers the full spectrum of acute trauma management,
    from first response to the scene, during transport, to trauma unit
    care, to operating room intervention and finally to management in the
    intensive care unit. The three-week session also incorporates the
    Advanced Trauma Care Course for nurses and the Pre-Hospital Trauma Life
    Support Course for our medical technicians. To date, over 200 personnel
    have been trained in Baltimore.
        Building on the success of this first site, the Air Force has
    developed and opened two new CSTARS programs, one at St. Louis
    University primarily for the Air National Guard (ANG) team training,
    and the other at the University Hospital of Cincinnati for Reserve
    teams. The St. Louis program started in January 2003, and we expect to
    train over 270 personnel during their two-week annual tour. Early
    feedback is impressive as reflected by an end-of-course survey comment,
    ``this is far and away the greatest training program I have been able
    to attend in the Air Force/ANG''.
        The CSTARS partnership between the University of Maryland Medical
    Center (UMMC) and the Air Force was key to the great success of the
    exercise ``Free State Response 2002'' conducted in Baltimore, Maryland
    in July of last year. The purpose of the exercise was to train as many
    people as possible in community disaster response and to foster
    effective coordination and collaboration between agencies involved in
    disaster management. The exercise received wide media coverage in the
    national capital area and was judged a huge success.
        Expeditionary Medical Systems (EMEDS) is a five-day course that
    provides hands-on field training for personnel assigned to EMEDS
    deployment packages to prepare them to work in the operational
    environment. There are currently three sites for EMEDS training: Brooks
    City Base, Texas primarily for active duty, Sheppard AFB, Texas for
    Reserves, and at Alpena, Michigan for ANG personnel. So far, 3,608
    personnel have been trained in this critical operational requirement.
        Overall trends in healthcare delivery and the National Defense
    Authorization Act of 2001, allowing care for beneficiaries over age 65,
    have resulted in an increase in the acuity and complexity of the
    patients we serve. This has increased the need for experienced nurse
    clinicians. Facility chief nurses have expressed growing concerns over
    the challenge of providing the most effective care with a relatively
    junior staff. In our military system, rank reflects the relative
    experience of the individual. When we look at our current Nurse Corps
    force structure, we note that more than 72 percent of our
    authorizations are for second lieutenants, first lieutenants and
    captains. These nurses range from ``novice to proficient'' in their
    nursing skills. Nurses at the major and lieutenant colonel level are
    ``expert to master'' in their practice. The ratio of company grade to
    field grade nurses is significantly higher than for other medical
    career fields or the line of the Air Force.
        To correct the imbalance in our mix of novice and expert nurses,
    authorizations for field grade nurses would need to be increased. The
    Air Force Nurse Corps has initiated a Top Down Grade Review (TDGR) to
    identify, justify, and recommended needed adjustments. We are nearing
    the end of our data collection and research phase of the study and
    anticipate draft recommendations for our surgeon general in the next
    couple of months. If approved, and if additional field grade billets
    are indicated, the process to adjust authorizations among career fields
    can be initiated with the Chief of Staff of the Air Force's approval.
        In a separate but related issue, the Nurse Corps has the poorest
    promotion opportunity among Air Force officers. With only 28 percent of
    our authorizations in field grade ranks compared to 46 percent in the
    line of the Air Force, it is easy to understand why so many excellent
    officers are not getting selected for promotion. This lack of promotion
    opportunity is a major source of dissatisfaction in our Nurse Corps.
    The inequity in promotion opportunity has caught the eye of many line
    and medical commanders and garnered some support for our TDGR
    initiative. It is anticipated that a TDGR would validate increases in
    field grade Nurse Corps requirements. An increase in field
    authorizations would improve Nurse Corps promotion opportunity and
    bring it closer to that of other Air Force Officers.
        Although the programs instituted on a national level to address the
    nursing crisis are encouraging, recruiting enough nurses to fill
    positions is still a huge challenge across the United States and in
    many other nations. Last year was the fourth consecutive year the Air
    Force Nurse Corps has failed to meet our recruiting goal. We have
    recruited approximately 30 percent less than the goal each year since
    fiscal year 1999. At the end of fiscal year 2002, we had 104 fewer
    nurses than our authorized end strength of 3974. Early personnel
    projections forecasted we would end the year 400 nurses under end
    strength. Our final end strength reflects an abnormally low number of
    separations last year, 136 compared to our historical average of 330.
    Our fiscal year 2003 recruiting goal is 363 nurses, and, as of February
    2003, 100 have been selected for direct commission. This year
    recruiting service is able to offer an accession loan repayment of up
    to $26,000 as an incentive. With $6.2 million available to fund this
    initiative, we are hopeful that it will be as successful as last years
    retention loan repayment program and boost our accession numbers closer
    to the goal.
        Last year we revived an earlier policy that allowed Associate
    Degree (ADN) nurses who had a Baccalaureate degree in a health-related
    field to join the Nurse Corps. This was in response to Recruiting
    Service's belief that this would give access to a robust pool of
    recruits. But, in reality, only 13 ADN nurses were commissioned under
    this carefully monitored program. I rescinded the policy in October
    2002 since it did not produce the desired effect.
        We continue to recruit nurses up to the age of 47 because it proved
    very successful in fiscal year 2002. Thirty-four nurses over age 40
    were commissioned into the Air Force last year. Many of them have the
    critical care skills and leadership we need to meet our readiness
    mission and most have the years of experience to make them valuable
    mentors for our novice nurses.
        ``We are all recruiters'' is our battle cry as we tackle the
    daunting task of recruiting the nurses we need, and I continue to
    partner closely with recruiting groups to energize our recruiting
    strategies. Among other activities, I have written personal letters to
    nurses inviting them to consider Air Force Nursing careers and have
    manned recruiting booths at professional conferences. I look for
    opportunities to highlight and advertise the exciting opportunities Air
    Force Nurses enjoy, and have had nurses featured in print media
    coverage. I encourage each nurse wearing ``Air Force'' blue to visit
    their alma mater and nursing schools near their base of assignment to
    make presentations to prospective recruits. I have also assigned four
    nurses to work directly in recruiting groups to focus exclusively on
    nurse recruiting. Recruiters are using innovative marketing materials
    that my staff helped develop to champion Air Force Nursing at
    conferences, in their website, and in other publicity campaigns.
        Retention is another key factor in our end strength. In an effort
    to identify factors impacting separations, I directed the Chief Nurse
    of every facility to interview nurses who voluntarily separate. Exit
    interviews were standardized to facilitate identification of the
    factors that most influenced nurses to separate. Nurses indicated they
    might have elected to remain on active duty if staffing improved, if
    moves were less frequent, if they had an option to work part time, or
    if they could better balance work and family responsibilities. Most of
    these are requirements of military life that cannot be changed by the
    Nurse Corps. With regards to staffing, our nurse-patient ratios are
    fairly generous compared to civilian staffing models. The Air Force
    Medical Service has launched an aggressive initiative to develop
    standardized staffing models for functions across all medical
    facilities to optimize staffing effectiveness.
        We are developing a new survey for all nurses to identify
    workplace/environmental impediments so we can target opportunities to
    increase satisfaction. We continue to recommend Reserve, National
    Guard, and Public Health Service transfers for those who desire a more
    stable home environment but enjoy military service and can meet
    deployment requirements.
        We appreciate the continued support for the critical skills
    retention bonus authorized in the fiscal year 2001 NDAA. The Health
    Professional Loan Repayment Program, implemented in fiscal year 2002,
    was embraced by 241 active duty nurses saddled with educational debt.
    These nurses had between six months and eight years of total service
    and were willing to accept an additional 2-year active duty obligation
    in exchange for loan repayment of up to $25,000. This program improved
    our immediate retention of nurses and has great potential to boost
    long-term retention in critical year groups.
        The TriService Health Professions Special Pay Working Group
    identified Certified Registered Nurse Anesthesiologists (CRNAs) and
    Perioperative Nurses as critically manned and therefore eligible for a
    retention bonus. This program was enthusiastically welcomed with 66
    percent of eligible CRNAs and 98 percent of Perioperative Nurses
    applying for a critical skills retention bonus in exchange for a one-
    year service commitment.
        We are looking at the benefits of increasing the number of civilian
    nurses in our workforce. We are grateful for the support of Congress in
    implementing U.S. Code Title 10 Direct Hire Authority to streamline the
    civilian nurse hiring process. During the period from August to
    December 2002, the Air Force was able to use direct hire to bring 14
    new civilian registered nurses on duty. With use of Direct Hire
    Authority, positions that had been vacant for as long as 18 months were
    filled within weeks. Our ability to hire civilian nurses would be
    greatly enhanced if we could hire at a competitive salary. We greatly
    appreciate your support and interest in Title 38-like pay authority for
    health professions.
        We are delighted to report that this year six Air Force Academy
    graduates selected the profession of nursing for their career field.
    This is the largest group to choose nursing since the option was
    instituted in 1997. Cadets selected for direct entry into the Nurse
    Corps attend Vanderbilt University School of Nursing via the Health
    Professions Scholarship Program. This accelerated degree program allows
    non-nurses with a bachelor's degree to obtain a master's degree in
    nursing after two years of study. To date, eight academy graduates have
    completed this program. Graduates of the Vanderbilt program have the
    leadership skills gained at the Academy coupled with a nursing degree
    from a prestigious university. They are prepared as advanced practice
    nurses and have the leadership base and potential to become top leaders
    in military healthcare.
        Air Force Nursing has been actively engaged in optimizing the
    contributions of our enlisted medical technicians by expanding their
    responsibilities and, in some cases, merging skill sets. In November
    2002, the Air Force consolidated three career fields, the aeromedical
    technician, medical service technician and public health technician. We
    now have two key career fields, the aerospace medical service
    technician and public health technician. This consolidation provides
    more robustly trained enlisted medics and increases manpower to support
    force health protection and emergency response. In this transition,
    every health care facility stood up a Force Health Management element
    responsible for ensuring designated personnel are medically cleared,
    prepared and ready to deploy at a moment's notice.
        Air Force Independent Duty Medical Technicians (IDMTs) have been
    tasked to support an expanding variety of missions and have become high
    demand, low-density assets. In Operation Enduring Freedom, they have
    been added to Special Forces teams for a variety of missions. IDMTs
    have provided medical care during prisoner transports, on an expedition
    into Tibet for recovery of remains, on drug interdiction operations, in
    austere, remote locations and on the front lines. This year, we are
    substituting IDMTs for the medical technicians assigned to our Squadron
    Medical Elements, teams deployed with flying squadrons to provide
    medical care in the operational environment. To support these
    additional taskings, we have increased our IDMT training program from
    108 to 168 per year.
        We continue our efforts to expand the scope of enlisted nursing
    practice through licensed practical nurse (LPN) training programs. This
    past year, we continued to send personnel to St. Phillip's College in
    San Antonio, Texas for a six-month program that prepares graduates to
    take the state board LPN licensure exam. To date, 48 medical
    technicians have completed the LPN program at St. Phillips College.
    This year, we are partnering with the Army Licensed Vocational Nurse
    Program to provide a more structured and comprehensive training program
    and increase our numbers of graduates to 60 students per year. As of 1
    November 2002, a special experience identifier was implemented to
    provide visibility in the personnel system for licensed practice nurses
    and enable appropriate assignment actions.
        We are successfully maintaining our medical enlisted end strength.
    The overall manning for technicians in the aerospace medical service
    career field remains above 90 percent, which can be construed as a
    positive reflection of satisfaction and the impact of quality of life
    initiatives. The neurology technician career field has been critically
    manned for some time, and I am pleased to report that the
    implementation of a selective reenlistment bonus has been very
    successful. The neurology career field manning has improved from 69.2
    percent in May 2001 to 88.5 percent in November 2002 and is projected
    to grow to over 90 percent with the graduation of the next training
    course.
        Nursing services is actively engaged in optimizing health care.
    This maintains a healthy, fit and ready force, improves the health
    status of our enrolled population and to provides health care more
    efficiently and effectively. The Air Force has seen continuing growth
    in the success of Primary Care Optimization (PCO) and we are now
    beginning the optimization of specialty services throughout our system,
    moving towards Health Care Optimization (HCO). Nurses and medical
    technicians continue to be the backbone of successful optimization, and
    we are refining the roles of the ambulatory care nurse, medical service
    technician, and Health Care Integrator (HCI) to ensure the patient
    receives the right care, at the right time, by the right provider.
        The PCO team is the epicenter for preventive services, management
    of population health and treatment of disease. We use civilian
    benchmarking to assess our healthcare outcomes and progress. The Health
    Plan Employer Data and Information Set (HEDIS) measures the health of
    our population and compares our outcomes to those of comparable
    civilian health plans. Using ideas generated from ``Best Practices'',
    we have seen impressive increases in the indicators of good diabetic
    management. In fact, 91 percent of Air Force facilities exceed the
    quality indicators for diabetic control measured through blood
    screening.
        Air Force facilities have been highlighted for other outstanding
    achievements in healthcare. Nurses and technicians at VA/DOD Joint
    Venture, 3rd Medical Group (MDG), Elmendorf AFB, AK were part of a
    project to increase the involvement of family and friends in patient
    care. This initiative's tremendous success led to the facility's
    selection by the Picker Institute as the #1 Benchmark Hospital in the
    United States for patient-centered surgical dimensions of care.
        In the 3rd MDG's ICU and multi-service unit (MSU), Air Force and
    Veteran Affairs (VA) nursing personnel are working side-by-side to
    deliver the highest quality care to DOD and VA beneficiaries. Air Force
    nurses train VA nurses in the MSU and VA nurses train Air Force nurses
    in the ICU. The robust and successful professional collaboration is the
    bedrock of this joint venture.
        Another great success in ambulatory care is the implementation of a
    population-based approach to case management. This program proactively
    targets at-risk populations and individuals along the health care
    continuum. One of our leading case managers, Lt. Col. Beth Register at
    Eglin AFB, FL has built an integrated approach that allows her six team
    members to each manage 50 cases, 200 percent above civilian industry
    caseload standards. Lt. Col. Register is preparing a TriService Nursing
    Research grant proposal to look at ``Efficacy of Case Management at an
    Air Force Facility'' and to test and validate the success of this case
    management program.
        Air Force nurse researchers continue to provide the answers to
    clinical questions that improve the science and the practice of
    nursing. Twenty-three Air Force nurses are actively engaged in
    TriService Nursing Research Program (TNSRP) funded research.
        The TNSRP-funded Nurse Triage Demonstration Project is in its
    second and final year of looking at the effective and efficient
    delivery of TeleHealth Nursing Practice. There have been some
    demonstrated positive outcomes. Clinical practice has been standardized
    through the use of medically approved telephone practice protocols;
    documentation has been improved through computer-based technologies and
    training programs have been developed and implemented.
        Another study conducted on in-flight invasive hemodynamic
    monitoring identified inaccuracies due to procedural variance. The
    recommendations resulted in significant process changes--and for the
    first time change was driven by scientific research. These process
    changes will be incorporated into the training programs for Critical
    Care Air Transport Teams (CCATT) and Aeromedical Evacuation (AE)
    nurses.
        The nurse researchers at Wilford Hall Medical Center in Texas are
    studying the care of critical patients in unique military environments.
    One of these studies looked at physiological responses to in-flight
    thermal stress in cargo aircraft used for aeromedical evacuation. The
    study identified areas in the aircraft where thermal stress was at a
    level that could be detrimental to critically ill patients. They also
    identified previously unrecognized limitations in accurate measurement
    of patient oxygenation during flight. These findings led to a study of
    warming devices to protect trauma victims from the deleterious effects
    of thermal stress following exposure in cold field environments or on
    cargo aircraft.
        It has been an exciting year for the Graduate School of Nursing at
    the Uniformed Services University and it is wonderful to be part of the
    planning for the development of a PhD nursing program. This program is
    crucial for Air Force Nursing to help us build leaders who are
    strategically prepared to lead in our unique military nursing
    environment.

                                CLOSING REMARKS

        Mister Chairman and distinguished members of the Committee, I have
    had the opportunity to lead the men and women of Air Force Nursing
    Services for three years and each has been full of new challenges,
    great opportunities and many rewards. Our nurses and aerospace medical
    technicians remain ready to support our Air Force by delivering best-
    quality healthcare in peace, in humanitarian endeavors and in war. The
    escalation of world tensions in the last year has afforded a showcase
    for their enormous talent, stalwart patriotism and devotion to duty. On
    behalf of Air Force Nursing, I thank this committee for your tremendous
    support of military men and women, and in particular, for the special
    recognition and regard you have shown for our nurses. We are forever
    grateful for your advocacy and leadership. Thank you and may GOD BLESS
    AMERICA!

        Senator Stevens. Well, thank you very much, all of you and
    General, thank you very much for your appearances before our
    committee and wish you well in your further endeavors. I'm
    going to have to excuse myself now. I had an appointment at
    noon. This is one of the strangest days. Senator Inouye will
    complete the hearing. Thank you very much.

                                 NURSE SHORTAGE

        Senator Inouye [presiding]. Thank you, Mr. Chairman. As I
    believe all of you are aware, the American Hospital Association
    just announced that there is a shortage at this moment in
    excess of 126,000 nurses in our Nation's hospitals, and the
    American Medical Association announced that by the year 2020,
    this shortage will exceed 400,000.
        Add to this the fact that all three services have had to
    send and deploy nurses to Operation Iraqi Freedom. My question
    to all of you is that during this period, were we able to
    provide appropriate, adequate, and effective nursing care to
    the patients at home here?
        General Bester. Senator, I can answer that question with an
    unequivocal yes. I think each one of our facilities has
    carefully looked at our nursing staffing situations with our
    Reserve backfill. Of course, as you had mentioned earlier not
    at the level that we would like to see it, but certainly with
    the Reserve backfill that we have got with hiring some
    additional contract nurses, and then with the support the
    continued support of our civilian nursing staff, we have looked
    at the staffing situation by hospital.
        In some cases, it means that we have had to divert some
    patients downtown and in some cases, on rare cases we have had
    to close or at least decrease the number of operational beds
    that we have, but I think we have always kept our focus on the
    quality of care to be sure that we are providing the same
    quality of care that we did prior to the war.
        Admiral Lescavage. Senator, I believe the answer all boils
    down to great attitude and team spirit. We watched very
    carefully as we deployed several hundred nurses and saw our
    wonderful Reservists step in who are used to working in our
    facility anyway during their Reserve time, as well as our
    civilian nurses, our backbone.
        We also are in line with the Institute on Health Care
    Improvement, with their big safety initiatives. We have safety
    programs that occur in our hospitals constantly looking for any
    discrepancies in care. We have seen zero, and I'm truly
    confident that our patients continue to receive the best and
    safest care that they possibly can, both in the war scenario,
    as well as back at our MTFs.

                          HOSPITAL SERVICES REDUCTION

        Senator Inouye. I have been told that in some facilities
    they had to curtail certain services like obstetrical surgery
    and such. Did we experience anything like that?
        Admiral Lescavage. Senator, we have curtailed slightly. We
    worked with the network to take care of those patients, but
    between what we expected compared to what truly did happen,
    there wasn't that big of a difference.
        Senator Inouye. So Bethesda is still a full-service
    hospital?
        Admiral Lescavage. Yes, sir.
        General Brannon. Yes. I would echo the comments from my
    colleagues with careful attention to staffing ratios and the
    acuity of the patients in our facilities. We have been able to
    ensure that the care we are rendering is just as safe as when
    we had those other nurses who were deployed.
        We did get some backfill after many of our nurses deployed,
    and that enabled us to keep full services at most
    installations. Occasionally we needed to close beds and divert
    patients downtown. At most facilities it was temporary until
    the acuity of the patients was lower, the same procedure we use
    in peacetime.

                              SPECIALIZED TRAINING

        Senator Inouye. Very few of our nurses have combat care
    experience. What sort of specialized training did you provide
    to prepare them for this? General?
        General Bester. Senator, our nurses are actively engaged in
    a number of programs. First of all, as was mentioned by General
    Peake of the Army Trauma Training Center down at Ryder Trauma
    Training Center in Miami is a place where we train all of our
    forward surgical teams. We have five full time Army Nurse Corps
    officers assigned to that facility and in just this last year,
    we have trained 290 Army Nurse Corps officers, both active and
    Reserve through that facility.
        We send our nurses to the combat casualty care course, a 9-
    day course in San Antonio, that they experience taking care of
    patients under combatlike conditions. General Peake initiated a
    couple years back a superb type of program that is now
    mandatory to take before any of our courses, short courses that
    we take. And so many of our Nurse Corps officers are actively
    engaged in that training.
        We feel in addition to that, we have a lot of professional
    training that goes on. We have some facilities that actually
    have medical sites, and they do real wartime training in those
    facilities. We feel we have kept well ahead of that rolling
    ball as far as training our nurses on a continual basis, so we
    feel they were very well prepared when it came time for them to
    deploy.
        Admiral Lescavage. Senator, we saw this coming and in order
    to increase our comfort level, a while ago, we instituted
    training not only for our nurses but for the teams, the
    corpsmen, the physicians, as well as the nurses who would be
    dealing with combat casualties.
        As I stated in my testimony, we instituted trauma training
    courses with LA County. That's working very well. We also have
    joined our sister services in some of their training as General
    Bester just alluded to, such as the combat casualty care
    course. Across all of our joint service nurses, many of them go
    to that, as well as to our education and training command. We
    offer many courses and again I'm fully confident that they are
    trained very well.
        General Brannon. Well, I think training is one of the real
    strengths in our Air Force and in our air expeditionary
    platforms. We ensure that people go for the training they need
    prior to deployment.
        What we have done in the medical service is identify, by
    task, all of the skills needed by people who are in specific
    deployment modules and we make sure that they have current
    training in each of those tasks. We have set up a modular
    deploying medical force sized from very small units all the way
    up to our EMEDS unit, which provide more sustaining patient
    care.
        For those smaller, more acute critical teams, we use the
    Baltimore shock trauma system at the University of Maryland for
    training through a collaborative partnership. That program has
    been in existence for more than 1 year. We have trained more
    than a couple of hundred medics including 70-some nurses. We
    also have EMEDS training in San Antonio at Brooks City Base.
    All of our EMEDS people go through that training prior to
    deployment.
        Finally, for many years we have had the Top Start programs
    at different medical centers where medics, both enlisted and
    officers, get training for a variety of tasks and procedures.
    It is a great performance-based training.

                           PERCENTAGE OF MALE NURSES

        Senator Inouye. One last question, and I will submit the
    rest and Senator Stevens has requested that his questions be
    submitted also. What percentage of your nurses in the Army are
    male?
        General Bester. Senator, at the current time, 36 percent.
        Senator Inouye. Navy?
        Admiral Lescavage. One-third of our nurses or 3,200.
        General Brannon. A little over 30 percent, sir. Similar
    percentage.
        Senator Inouye. I'm glad to see it coming up. For too long,
    nursing has been looked upon as a secondary position filled
    with women only. And apparently, this is a man's world yet, and
    so the more men you get, the bigger pay you'll get. That's not
    a nice thing to say, but----
        General Brannon. It is very true.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Inouye. Those are the facts of life around here.
    Without objection, all of the statements of the witnesses will
    be made part of the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
              Questions Submitted to Vice Admiral Michael L. Cowan
                   Questions Submitted by Senator Ted Stevens
                        deployment of medical personnel
        Question. The staff's discussions with the Surgeons General
    indicate that the Services have backfilled for deployed medical
    personnel at the Medical Treatment Facilities at varying levels.
        Some of the Services are relying more heavily on private sector
    care rather than backfilling for deployed medical personnel.
        To what extent has the recent deployment of military medical
    personnel affected access to care at military treatment facilities?
    What are you doing to ensure adequate access to care during this time?
        Answer. We have been able to maintain services required to address
    the needs of both patients coming in from the battlefields and those
    seeking regular care through significant deliberate planning. We
    implemented core doctrine and conducted intense scrutiny of Military
    Treatment Facilities (MTFs) services availability. We identified the
    appropriate reservists to support the Military Treatment Facilities
    (MTFs) in maintaining services, in some cases adding contract
    personnel. Each week we tracked the availability of services at each
    MTF. Our MTF personnel, along with activated reservists worked at
    unsustainable levels during the deployment and were able to ensure that
    access to care was maintained at all MTFs. A survey of activated
    reservists is now underway to fully assess the productivity and
    effectiveness of all of our personnel, including our reserve support in
    ensuring that access to care was maintained for all beneficiaries
    during Operation Iraqi Freedom.
                  mobilized reservists in medical specialties
        Question. What percentage of mobilized Reservists in medical
    specialties are being used to backfill positions in the United States?
        Answer. Backfilling of Military Treatment Facilities (MTFs) using
    Reservists in medical specialties is determined on a ``case-by-case''
    basis, and approved by USD (P&R). During Operation Iraqi Freedom (OIF),
    the Navy was approved to backfill Navy MTFs (in a phased plan) at a
    rate of 53 percent of deployed active duty medical personnel. Due to
    the short course of OIF, Navy MTFs were actually backfilled at 43
    percent.
        Question. Are there shortages of personnel in some specialties? If
    so, which specialties are undermanned and by how much?
        Answer.
    Dental Corps
        Due to a significant downward trend in retention of LT/LCDR General
    Dentists coupled with significant under execution of CNRC DC accessions
    the Dental Corps is undermanned; specifically Oral Surgeons,
    Endodontists, and General Dentists.
        Dental Corps overall manning has been trending downward for the
    last three years, ending fiscal year 2002 at 94.4 percent manning
    (1,294 INV/1,370 BA or -76). The EFY 2003 projection is estimated at
    <90 percent.
        In addition to General Dentists, the Oral Surgeon and Endodontist
    communities are significantly short due to reduced numbers of officers
    entering the training pipeline as direct impact from the shortfall in
    the General Dentist community, and an increase in the loss rates in
    these communities.

    ----------------------------------------------------------------------------------------------------------------
                                                                                                     Fiscal   Fiscal
                      Corps Specialty (PSUB)                      INV       BA      PCT      +/-      Year     Year
                                                                                                      2004     2005
    ----------------------------------------------------------------------------------------------------------------
    DC--Dentist (1,700).......................................      486      594       82     -108       80       78
    DC--Oral Surg(1,750J/K)...................................       66       82       80      -16       78       72
    DC--Endodontist (1,710J/K)................................       44       52       85       -8       83       80
    ----------------------------------------------------------------------------------------------------------------

        The remaining Dental Corps specialties are stable at this time with
    sufficient gains to compensate for losses, but is anticipated to become
    a problem in the future if General Dentist retention and accessions is
    not significantly improved, as this is the applicant pool for specialty
    training.

    Medical Corps
        The Medical Corps continues to have difficulty in retaining certain
    specialties. The Medical Corps has less than 80 percent manning in
    Anesthesia, Radiology, General Surgery, Pathology, and Radiation
    Oncology. Internal Medicine and subspecialties (84 percent) and
    Dermatology (83 percent) are near the critical point of under manning.
        Inability to access or retain specialties noted above can be
    attributed to significant military-civilian pay gaps and declining
    number of quality of work attributes that once made practicing in Navy
    Medicine enticing over the private sector (e.g., increased operational
    tempo). Additionally, the changing face of medicine in the civilian
    sector (e.g., fewer applicants for medical school and even fewer
    medical school graduates going into the above specialties) is affecting
    Navy Medicine as well.
        The primary pipeline for Navy physicians is the Health Professions
    Scholarship Program (HPSP), which brings in 300 of the 350 individuals
    entering as medical students. The HPSP recruiting goal for fiscal year
    2003 is 300. The Navy is behind in recruiting in that by May, there are
    usually about 150 recruited. Presently there are only 51. It should be
    noted that not only is the number of HPSP recruits diminishing, but the
    quality has also decreased when utilizing MCAT scores as an indicator
    of quality. In he past, HPSP recipients had MCAT scores of 26-30.
    Applicants with scores as low as 22 are being considered in order to
    fill quotas.

    Medical Service Corps
        Retention in the Medical Service Corps is good overall. End of
    fiscal year 2002 manning was at 98.5 percent with projections for the
    next two years at or near 98 percent manning. However, difficulties
    remain in retaining highly skilled officers in a variety of clinical
    and scientific professions.
        The Medical Service Corps is comprised of 32 different health care
    specialties in administrative, clinical, and scientific fields. The
    education requirements are unique for each field; most require graduate
    level degrees, many at the doctoral level.
        Biochemistry, Entomology, and Podiatry are undermanned by more than
    10 percent. Average yearly loss rates are high in Biochemistry,
    Physiology, Environmental Health, Dietetics, Optometry, Pharmacy, and
    Psychology. Loss rates this year are very high for Microbiologists &
    Social Workers.
        The Medical Service Corps does not have available to them retention
    tools or special pays for scientists and very limited ones for
    clinicians such as Optometrists, Pharmacists, and Podiatrists.

    Nurse Corps
        The Nurse Corps continues to be healthy considering the national
    nursing shortage. The affect of a decreasing number of students who
    choose nursing as a career and the ever-increasing demand for
    professional nursing services will need to be closely monitored to
    ensure Navy Nurse Corps is able to meet the requisite number and
    specialty skill mix.
        Ability to meet Navy Nurse Corps requirements are due to concerted
    efforts in diversifying accession sources and increased retention rates
    and as a direct result of pay incentives and graduate education
    opportunities.

    Hospital Corps
        The Hospital Corps continues to have difficulty in retaining
    certain specialties. Currently there is less than 80 percent manning in
    11 Hospital Corps and one Dental Technician NEC. Inability to access or
    retain some of these specialties can be attributed to significant
    military-civilian pay gaps.
        Question. Are there other ways of structuring the staffing of
    military medical units that might help address shortages in a few
    specialties, such as making increased use of civilian contractors or
    DOD civilian personnel in MTFs stateside?
        Answer. MTF Commanders have been tasked with creating business
    plans for the optimal operation of medical treatment facilities within
    each market area. An integral part of the business planning process is
    the assessment of the supply of critical staffing as compared with the
    expected demand in a given market. MTF Commanders use this analysis in
    determining shortfalls of critical medical staff. Meeting these
    critical requirements can be accomplished using a variety of methods.
    MTF Commanders may shift existing DOD civilian personnel where
    feasible, hire additional contract personnel or request changes in the
    billet structure via Manpower at the Bureau of Medicine.
        Question. Is DOD considering any changes to the mix of active duty
    and reserve personnel in medical specialties?
        Answer. At this time, no changes are anticipated regarding the mix
    of active and reserve personnel within medical specialties from Navy
    Medicine's perspective. Various studies have been initiated but the
    current view of casualty causes for OEF and OIF do not suggest that any
    major changes in force structure mix or specialty will be necessary.

              MONITORING THE HEALTH OF GUARD AND RESERVE PERSONNEL

        Question. An April 2003 GAO report documents deficiencies by the
    Army in monitoring the health of the early-deploying reservists. Annual
    health screening is required to insure that reserve personnel are
    medically fit for deployment when call upon.
        Review found that 49 percent of early-deploying reservists lacked a
    current dental exam, and 68 percent of those over age 40 lacked a
    current biennial physical exam.
        What improvements have been made to the medical information systems
    to track the health care of reservists? Are they electronic, do they
    differ among services?
        Answer. The Naval Reserve is utilizing the Reserve Automated
    Medical Interim System (RAMIS), a web-based Oracle product, deployed in
    March 2002 to serve as an interim system until the Naval Reserve's full
    participation in the Theater Medical Information Program (TMIP). The
    system tracks medical and dental readiness requirements and provides
    roll up reporting capabilities to produce a ``readiness snapshot'' for
    unit commanders, activity commanding officers and headquarters. Plans
    are currently being drafted to begin development work in 2004 for an
    all Navy (Active/Reserve) web-based system using technology from RAMIS
    and a Navy active duty product, SAMS Population Health. This product
    will be part of TMIP and will provide interoperability between all DOD
    components and services.

                   NUMBER OF RESERVISTS WITH MEDICAL PROBLEMS

        Question. During the mobilization for Operation Iraqi Freedom, how
    many reservists could not be deployed for medical reasons?
        Answer. 436 Naval Reservists were unable to be deployed due to
    disqualifying medical or dental reasons.

                NUMBER OF RESERVISTS NOT IN DENTAL CLASS 1 OR 2

        Question. How many deployments were delayed due to dental reasons,
    and how many reservists are not in Dental class 1 or 2?
        Answer. The Naval Reserve averages 90 percent of our personnel in
    dental categories 1 and 2. We estimate that less than 1,600 personnel
    out of more than 20,000 Naval Reservists mobilized (approximately 8
    percent) were delayed for any amount of time for dental reasons.
        Question. What is the current enrollment rate in the TRICARE Dental
    Program for reservists and what action has DOD taken to encourage
    reservists to enroll in TDP?
        Answer. The fiscal year 2003 end strength numbers for eligible Navy
    and Marine Corps Selected Reserve sponsors is estimated to be 127,358
    (Navy Reserve 87,800 and Marine Corps Reserve 39,558). TDP enrollments
    as of January 2003 for this eligible population were 8,599 (Navy
    Reserve 6,566 and Marine Corps Reserve 2,033). These figures represent
    a 6.8 percent enrollment rate. Marketing of the TRICARE Dental Program
    (TDP) to all eligible populations is conducted by the TDP contractor.
    The initial marketing effort by the contractor entailed sending TDP
    information to each reserve and guard unit. Quantities of information
    sent were based on unit end strengths. Health Affairs policy 98-021
    directed the services to ensure all members of the Selected Reserve
    undergo an annual dental examination. The documenting tool provided by
    HA is DD Form 2813; DOD Reserve Forces Dental Examination. A provision
    in the TDP contract requires network providers to complete the DD Form
    2813 for TDP enrolled reservists. It is the responsibility of the
    reservist to present the form to the dentist. The Defense Manpower Data
    Center (DMDC) provides the TDP contractor quarterly file listing newly
    eligible sponsors. This file is used for the ongoing marketing efforts
    under the TDP. The TDP contractor has also established a website for
    the TDP. The contractor has a staff of Dental Benefits Advisors (DBA)
    that travel to military installations to include reserve and guard
    facilities. TMA's Communications & Customer Service marketing office
    has worked with Reserve Affairs to developed and post TDP fact sheets
    on the TMA website that are linked to other reserve and guard websites
    and the TDP contractor.

                   REMAINING MEDICAL AND DENTAL REQUIREMENTS

        Question. What needs to be done and what will it cost to ensure
    that reservists are medically and dentally fit for duty?
        Answer. The Reserve Components have little or no identified funding
    support for medical and dental readiness and, under Title 10 authority,
    are not eligible for Defense Health Program (DHP) funds. OSD(RA) is
    presently drafting a White Paper in support of a Reserve Health Program
    that will require a separate appropriation to support Medical/Dental
    Readiness for the seven Reserve/Guard Components. Cost estimates will
    be available when the White Paper is complete.

                      REPERCUSSIONS FOR UNFIT UNIT MEMBERS

        Question. Are there any repercussions for commanders who do not
    ensure that their troops are fit for duty?
        Answer. Unit commanders are responsible for ensuring personnel are
    trained and ready in all aspects, including medical and dental fitness,
    for mobilization. Unit commanders are evaluated and ranked, in part, in
    Fitness Reports based upon total unit readiness.

                    COMBAT TREATMENT IN IRAQ AND AFGHANISTAN

        Question. All of the Services have undertaken transformation
    initiatives to improve how medical care is provided to our front line
    troops.
        The initiatives have resulted in more modular, deployable medical
    units which are scalable in size to meet the mission.
        How well have your forward deployed medical support units and the
    small modular units performed in Operation Enduring Freedom and
    Operation Iraqi Freedom?
        Answer. Most of the information provided is anecdotal. We will not
    have significant formal input until the ``lessons learned'' are
    provided by the deployed platforms and the receiving component
    commanders. The formal collection of feedback is still ongoing as units
    return from Iraq. Initial reports indicate that the 116 bed
    Expeditionary Medical Facilities forward-deployed into Iraq functioned
    as they were designed. The 250-bed Fleet Hospital staged in Rota, Spain
    also functioned well. The USNS Comfort was on station, on time to
    receive casualties. The casualties received were handled well. Use of
    the Comfort by the theater commands raised issues related to inter-
    theater movement of patients. These issues are being reviewed as part
    of the overall assessment of CASEVAC/MEDEVAC. The Casualty Receiving
    and Treatment Ships were stationed and staffed as required. Due to the
    nature of the conflict, they saw limited action. The Forward
    Resuscitative Surgical Systems were deployed in pairings with the
    surgical companies. These locations were less far forward than
    initially planned and the optimal placement is under review. Reports
    from Level II and Level III facilities strongly support that
    interventions by the FRSS were critical in saving lives that might have
    been lost in previous conflicts. Three PM-MMART teams were deployed to
    Iraq and were highly successful in providing disease vector assessment/
    control, epidemiology and epidemiological humanitarian support,
    industrial and environmental site assessment, sanitation assessment and
    public health education.
        Question. What are some of the lessons learned from our experience
    in Iraq?
        Answer. Smaller, lighter, more mobile works and works well. Task
    orienting enhances the likelihood of success. Communications in the
    field between Level I care and higher levels are not optimal. This is
    also true for inter-service communication. Component UIC's work and
    work well. Management of the component UIC's needs to remain centrally
    located. Arbitrary peripheral changes to platforms by individuals and
    units disrupted the ability to fully staff platforms with qualified
    personnel and hampered the ability to identify replacements and
    augments for future needs. Using Fort Benning to inprocess individual
    augmentees and equip them prior to deployment was highly successful and
    emphasized joint inter-operability. Personnel policies regarding stop-
    loss or stop-move should be determined before deployments commence. The
    policies need to be tailored to the circumstances and not applied
    across the board unless this is indicated. Provision needs to be made
    for providing transportation for the PM-MMART units, either as part of
    COCOM support or as part of the intrinsic equipment package.
        Question. What tools/equipment is still required to improve the
    care provided to combat casualties?
        Answer. Dedicated, durable, mobile, state-of-the-art, easily up-
    gradable communications, both between levels of care and between
    services is needed. Better CASEVAC capability is required under all
    circumstances. As we gather ``lessons learned'' through the formal
    process, more needs may be identified and further recommendations will
    be forthcoming.

                  T-NEX--NEXT GENERATION OF TRICARE CONTRACTS

        Question. The award date for these contacts has slipped from the
    scheduled date in July of 2003. Since the timeline for awarding the
    contracts has slipped, what is the expected start date for the delivery
    of T-Nex?
        Answer. The overall schedule for the suite of T-Nex solicitations
    has not been changed although some award dates may be delayed if
    proposals require more extensive review. The TRICARE Mail Order
    Pharmacy Contract was awarded, and performance began on March 1, 2003.
    The TRICARE Retiree Dental Contract was also awarded and performance on
    this contract began on May 1, 2003. Proposals have been received for
    both the TRICARE Healthcare and Administration Managed Care Support and
    the TRICARE Dual-Eligible Fiscal Intermediary contracts, and the
    evaluation process for both of these is ongoing. Requests for Proposal
    have been issued for the TRICARE Retail Pharmacy and National Quality
    Monitoring contracts, and those proposals are due June 11 and June 3,
    respectively. Procurement sensitivity rules prohibit disclosure of any
    specific information or details about the ongoing evaluation of
    proposals. However, I can tell you that the evaluations are ongoing. No
    decision has been made to alter the implementation schedule for any of
    the contracts.
        Question. What planning is taking place to help ensure that when
    the contracts are entered into there will be a seamless transition for
    beneficiaries?
        Answer. No transition of this magnitude is easy. A customer focused
    perspective in execution is central to making this as seamless as
    possible. We have already transitioned the TRICARE Mail Order Pharmacy
    contract with success. The TRICARE Retiree Dental Plan contract was
    also awarded without protest and now is in its first month of operation
    without issues. With regard to our managed care contracts, going from
    seven contracts to three will simplify administration, but more
    importantly better serve our beneficiaries with incentivized
    performance standards, greater uniformity of service, alleviation of
    portability issues, and simplified business processes.
        I have instituted a solid oversight structure (see attachment), and
    appointed a senior executive to spearhead this transition and supervise
    all aspects of the procurement including the implementation of the new
    regional governance structure. This operational approach and structure
    requires my direct involvement through the Transition Leadership
    Council made up of the Surgeons General, the Principal Deputy Assistant
    Secretary of Defense for Health Affairs and the Health Affairs Deputy
    Assistant Secretaries of Defense. This body is supported by a TRICARE
    Transition Executive Management Team which is chaired by TMA's Chief
    Operating Officer.
        An area of detailed focus right now is access to care and all
    business processes that will impact access including: networks,
    provider satisfaction, appointing and scheduling, Military Treatment
    Facility (MTF) optimization, and local support for MTF commanders. We
    are optimistic that robust networks can be maintained. On all customer
    service fronts, my staff and other participants are poised to execute a
    smooth transition immediately following contract award. Regular
    meetings are underway to measure our progress and formulate sound
    decisions on any problematic issues. A contract transition orientation
    conference is planned for June 2003 to fully engage government
    participants in all aspects of the transition process.
        Question. Are beneficiaries experiencing any change in quality of
    care due to DOD's inability to enter into new long-term managed care
    agreements?
        Answer. The evaluation of contractor proposals is now underway and
    will culminate in the awarding of three new Health care and
    Administration regional contracts. A planned 10-month minimum
    transition period will precede start of health care delivery.
    Surveillance for the delivery of services of outgoing contractors
    during the transition period will remain focused to avoid any
    deterioration in customer service standards. Current contracts have
    been extended beyond original termination dates to ensure there is no
    adverse impact on the beneficiary or quality of care.
        Any signs of negative shifts in quality during this transition
    period will be quickly recognized and dealt with on a priority basis.
    Our proactive posture is expected to result in a near-seamless
    transition to next generation contracts. Additionally, in T-Nex
    contracts, industry best business practices are fully expected to
    emerge through the competitive process. Customer service protocols will
    be favorably impacted by outcome-based requirements and accompanying
    performance standards. Additionally, web-based service applications
    will also improve business processes and the way customers can access
    information. This is all very exciting and bodes well for our customers
    in the new contracts.
        Question. Under T-Nex, what services currently provided by the
    TRICARE contractors will shift to the direct care system and what are
    the costs associated with this shift in services?
        Answer. Appointing, Resource Sharing, Health Care Information Line,
    Health Evaluation & Assessment of Risk (HEAR), Utilization Management,
    and Transcription services will transition from the Managed Care
    Support Contracts to MTFs under T-Nex. The Services have been tasked to
    provide requirements in each of these areas, cost estimates, and
    transition timelines. We have worked with the Services to develop a
    joint approach to determine local support contract methodology.
    Transition of Local Support Contract services must be completed not
    later than the start of health care under T-Nex in each region. Based
    on known contract and staffing lag times, funding is required six
    months prior to the start of health care delivery to ensure smooth and
    timely stand up of new services. At this stage, cost estimates are
    varied and of limited value until the requirement is validated and
    fully known. Initial rough estimates are in the hundreds of millions of
    dollars. The funding source for Local Support will come from funds
    committed to the current Military Health System (MHS) Managed Care
    Support contracts. Those funds were programmed based on existing
    purchased care contracts that included these services. Because it is
    understood that these funds may not cover the entire spectrum of Local
    Support contracts, the Medical Services have prioritized these services
    across the MHS into three tiers based on impact and need. Initial costs
    may ultimately include some investment in telephone and appointing
    infrastructure, thus driving a significant increase in front end costs.

                            RECRUITING AND RETENTION

        Question. Personnel shortfalls still exist in a number of critical
    medical specialties throughout the Services. The Navy reports
    shortfalls in Anesthesiology, General Surgery, Radiology, and
    Pathology, and has stated the civilian-military pay gap is their
    greatest obstacle in filling these high demand specialties. Recruiting
    and retaining dentist appears to be a challenge for all the Services.
        To what extent have Critical Skills Retention Bonuses or other
    incentives been successful in helping to retain medical personnel?
        Answer.

    Dental Corps
        When the CSRB was combined with the renegotiation of Dental Officer
    Multi-year Bonus (DOMRB) contracts, the effect was increased obligation
    for those that took DOMRB contracts. This in effect tied the one-year
    CSRB to a multi-year obligation, having some positive effect.

    Medical Corps
        The CSRB helped retain some individuals in Anesthesia, Radiology,
    Orthopedics, and General Surgery who would have otherwise gotten out of
    the Navy. Because the CSRB was limited to a one year contract, the long
    term benefit is minimal.

    Medical Service Corps
        The Critical Skills Retention Bonus was not offered to any of the
    Medical Service Corps specialties.

    Nurse Corps
        The Critical Skills Retention Bonus was offered to qualified nurses
    resulting in acceptance rates of 87 percent for Certified Registered
    Nurse Anesthetists (CRNAs) and 98 percent for Perioperative Nurses. For
    the CRNAs, it has been a positive influence for staying beyond their
    obligated service period. We are presently at end-strength in both
    communities based on a combination of factors such as special pays,
    scope of practice satisfaction and a focus on quality of life issues.

    Hospital Corps
        When incentive and special pays have been put in place for
    undermanned specialties, accessions have increased.
        Psychiatry Technician and Respiratory Therapy Technician
    communities manning increased, 36 percent and 28 percent respectively,
    after implementation of the Selective Training and Reenlistment (STAR)
    Program and increased Selective Reenlistment Bonus.
        Question. What else needs to be done to maximize retention of
    medical personnel?
        Answer.
    Dental Corps
        The NDAA fiscal year 2003 raised the caps on the Dental Officer
    Multi-year Retention Bonus (DOMRB). It is hoped that the anticipated
    increase in pay while falling significantly short of comparable
    civilian pay, will demonstrate a commitment by Navy to increase
    compensation for dentists in the interim while a more comprehensive
    plan is developed.
        There was a slight enhancement in overall retention as a result of
    increases in dental ASP in 1997 and the initial offering of DOMRB in
    1998 compared to previous years, but that effect has since worn off.
    Despite the introduction of the DOMRB and increase in ASP rates, the
    overall loss rate continues to climb to the highest it has been at 12.2
    percent in fiscal year 2002, higher than the 11-year average of 10.8
    percent. The majority of losses are junior officers (LT-03) releasing
    from active duty at the completion of their first term of obligated
    service. These year groups are not eligible for the DOMRB at this point
    in their careers and the current ASP rates are too low to impact their
    decision to stay on active duty. Furthermore, under current
    legislation, if the junior officer were to enter residency training
    they would have to give up the ASP for up to 4 years depending on the
    program length. Again, reducing the incentive to remain on active duty
    and pursue training.
        There is no incentive special pay (ISP) for dental officers,
    although it may be helpful to target pay increases for dental
    specialties with the largest military-civilian pay gap. A comparison of
    representative civilian and military average pays is as follows
    (source--the American Association of Oral and Maxillofacial Surgeons):

    ----------------------------------------------------------------------------------------------------------------
                            Avg Mil LCDR Pay                           Military Pay    Civilian Pay    Differential
    ----------------------------------------------------------------------------------------------------------------
    Specialist......................................................         $94,654        $202,360        $107,706
    Oral Surgeon....................................................          94,654         297,360         202,706
    General Dentist.................................................          68,871         154,741          85,870
    ----------------------------------------------------------------------------------------------------------------

    Medical Corps
        In addition to closing the civilian to military pay gap, physicians
    look for similar qualities of life as their line counterparts. The
    ability to increase their level responsibility, take on clinical,
    operational and administrative challenges, practice their profession
    the way they feel they should, hone their skills, select for the next
    higher rank, maintain geographic stability for their families, and have
    time to spend with family and friends are all important in retaining
    physicians. Having support staff in adequate numbers, well maintained
    and current technical specialty equipment, and a professional
    environment which respects the physician is tantamount to maintaining
    our physician workforce.

    Medical Service Corps
        Retention in the Medical Service Corps is good overall. However,
    difficulties remain in retaining highly skilled officers in a variety
    of clinical and scientific professions. Retention of these highly
    skilled officers is predominately affected by:
      --Civilian to military pay gap.--Economic influences as well as
            civilian workforce shortages can have a profound effect on the
            size of the pay gap. With the evolving Home Land Security
            requirements, the demand for our scientific officers with
            chemical, biological, radiological and nuclear training and
            experience in the private sector is becoming a significant
            factor in retention. Need to explore the implementation of U.S.
            Code: 37, Section 315, Engineering and Scientific Career
            Continuation Pay to improve the retention of our highly skilled
            scientific officers.
      --Significant student debt load.--Many of our clinical and scientific
            professions require a doctorate level degree to enter the Navy.
            Frequently, there are a limited number of training programs
            available in the United States and often only available at
            private institutions. For example, there are approximately
            seven institutions that train Podiatrists. All of the schools
            are private institutions. Podiatry school is a four-year
            academic program after completing their undergraduate pre-
            professional requirements,. The average student debt load for
            our entering Podiatrists is $150,000. The use of HPLRP, AFHPSP
            and HSCP alleviates much of the student debt load for a few of
            these officers.
      --Personal issues.--Dual family careers, child care and frequent PCS
            moves can impact retention. However, what may be considered a
            strong reason to leave military service by one member may be
            considered a strong reason to stay on active duty for another.

    Nurse Corps
        Nurse Corps officers seek scope of practice satisfaction that
    includes continuing formal education opportunities, collegial
    relationships with physicians and other allied health personnel and
    current technical capability. Nurse Corps officers also vocalize the
    need to attend to quality of life issues such as affordable housing and
    childcare and geographic stability for their families.

                                     ______

                Questions Submitted by Senator Pete V. Domenici

                   JESSE SPIRI MILITARY MEDICAL COVERAGE ACT

        Question. In 2001, a young Marine Corps 2nd Lieutenant from New
    Mexico lost his courageous battle with cancer. Jesse Spiri had just
    graduated from Western New Mexico University and was awaiting basic
    officer training when he learned of his illness.
        However, because his commission had triggered his military status
    to that of ``inactive reservist,'' Jesse was not fully covered by
    TRICARE. As a result, he was left unable to afford the kind special
    treatment he needed.
        I believe that it is time to close this dangerous loophole. That is
    why I intend to offer a bill entitled the ``Jesse Spiri Military
    Medical Coverage Act.''
        This bill will ensure that those military officers who have
    received a commission and are awaiting ``active duty'' status will have
    access to proper medical insurance.
        Would you agree that this type of loophole is extremely dangerous
    for those who, like Jesse, suffer with a dreaded disease?
        Answer. When an individual accepts an offer of a commission in the
    USN or USMC, there is a period of time prior to the beginning of Active
    Duty when they are in a ``inactive reservist'' status. During this
    time, the individual is not covered as a health care beneficiary in the
    TRICARE program. The individual remains responsible for obtaining their
    own health care insurance because they are not yet in ``active duty''
    status.
        Question. And do you agree that our military health care system
    should close this loophole, and can do so very cost effectively (given
    the relatively low number of officers it would affect)?
        Answer. We would like the opportunity to more carefully study this
    situation. There are other categories of individuals who have agreed to
    serve in the Armed Forces and who need to maintain their own health
    insurance until they begin active duty or active training. These would
    include all officer candidates on some type of delayed entry program
    such as medical students in the Health Scholarship Program, ROTC
    students, as well as personnel who agree to join the military following
    college. In addition, there are many enlisted personnel who join the
    military on a delayed entry program and are required to maintain their
    health insurance until they begin active training. These individuals
    are also awaiting entry on ``inactive reservist'' status. Without
    studying each of these categories of individuals, estimating their
    numbers and their likelihood of developing illnesses, it is premature
    to estimate the financial burden to the Navy in implementing the
    proposed changes.

                   MILITARY FAMILY ACCESS TO DENTAL CARE ACT

        Question. I think everyone here is familiar with the adage that we
    recruit the soldier, but we retain the family. That means taking care
    of our military families and giving them a good standard of living.
        I have introduced a bill that would provide a benefit to military
    families seeking dental care, but who must travel great distances to
    receive it.
        Specifically, my bill, the ``Military Family Access to Dental Care
    Act'' (S. 336) would provide a travel reimbursement to military
    families in need of certain specialized dental care but who are
    required to travel over 100 miles to see a specialist.
        Often, families at rural bases like Cannon Air Force Base in
    Clovis, NM meet with financial hardship if more than one extended trip
    is required. This bill reimburses them for that travel and is a small
    way of helping our military families.
        Given that current law provides a travel reimbursement for military
    families who must travel more than 100 miles for specialty medical
    care, do you believe it is important to incorporate specialty dental
    care within this benefit?
        Answer. Concur. The Bureau of Medicine and Surgery recommends that
    Sec. 1074i of title 10 United States Code be amended incorporate
    specialty dental care within this benefit. By providing a travel
    reimbursement to military families in need of specialized dental care
    who must travel over 100 miles to seek that care, we demonstrate our
    utmost support and recognition of their roles as critical members of
    the Navy healthcare team.
        Currently family members who are enrolled in TDP (TRICARE Dental
    Program) (Sec. 1076a.--TRICARE dental program) are not eligible for
    care in military DTFs except for emergencies or when OCONUS. All other
    (nonenrolled) Family Members are only eligible for ``Space A'' Care in
    CONUS. The USAF (with input from USN/USA) is currently sponsoring a
    proposal to change Title 10 to permit limited treatment of AD family
    members to meet training, proficiency and specialty board
    certification.
        Question. Do you think this benefit would improve the standard of
    living of our military families?
        Answer. Yes. Dental care is a quality of life enhancement. Reducing
    out of pocket costs for specialty dental care available only at
    distances away the homebases of Military Family Members would increase
    the likelihood that needed dental services would be accessed and result
    in increased dental health.

                                     ______

                 Questions Submitted by Senator Mitch McConnell

                  RESEARCH ON COMPOSITE TISSUE TRANSPLANTATION

        Question. Admiral Cowan, it is my understanding that the Navy
    Bureau of Medicine and Surgery has been engaged in important research
    into composite tissue transplantation. Clearly, such research has great
    potential to radically advance our ability to perform reconstructive
    surgeries on limbs and patients with considerable burn injuries. I have
    followed similar research into hand-transplantation that is being done
    in my hometown of Louisville, Kentucky, and have been impressed with
    the great potential for such surgical and tissue regeneration
    techniques.
        Could you please provide information regarding the extent of
    injuries sustained by members of our Armed Services who could benefit
    from reconstructive or transplantation surgeries due to combat or
    service related injuries?
        Answer. During the period of March through May 2003, NNMC received
    a total of 251 medevac casualties transferred from the Iraqi theater of
    operations, primarily via Army Medical Center--Landstuhl, Germany and
    Naval Fleet Hospital--Rota, Spain. Of these, 135 patients required
    admission to NNMC (112 Marines, 22 Sailors, and 1 Soldier) and 116 were
    evaluated as transient ``RONs'' in the NNMC Ambulatory Procedures Unit
    (104 Marines and 12 Sailors) during their transit through the Aero-
    Medical Staging Facility at Andrews Air Force Base, Maryland.
        Of the 135 patients admitted to NNMC, 63 percent were combat
    casualties. Of the combat casualties, the majority of patients
    sustained either blast injuries to upper or lower extremities, crush
    injuries, or gun shot wounds. These injuries resulted in many extremity
    fractures, both open and closed. Many of these patients underwent
    emergency surgery at forward treatment sites which included emergency
    fasciotomies. As a result, many of the patients required subsequent
    plastic surgical repair as part of their tertiary care at NNMC. This
    might be one area of combat injury that would be enhanced by
    reconstructive or tissue transplantation surgeries.
        In addition to the large number of fractures, 6 patients sustained
    significant traumatic amputations of extremities (3 lower leg, one
    foot, one forearm, and two patients with finger amputations). These
    would also be patients who might benefit from tissue transplantation
    advances.
        Question. Could you describe the Navy's composite tissue
    transplantation program? What is the current level of annual funding
    for this program? And could you describe work being done under related
    extramural grants funded by this program.
        Answer. The Navy Bureau of Medicine and Surgery has had, for many
    years, a research effort in the induction of ``tolerance'' in
    transplanted tissues with the hope of developing non-immune suppressing
    therapies to allow active duty victims of trauma to return to active
    duty. To this end, a kidney transplant model has been studied, since
    the mechanisms of rejection are similar to other tissues, though the
    kidney is a less immune-provoking organ than composite tissues. Thus,
    the kidney transplant serves as a simpler model for studying rejection
    and developing therapies against it. The transplant effort is now
    contained within the Combat Injury and Tissue Repair Program of the
    Combat Casualty Care Directorate at the Naval Medical Research Center
    (NMRC), under the leadership of Barry Meisenberg, M.D. The funding for
    ``transplantation'' research has been reduced over the past 5 years,
    leading to a significant scale-back and unfortunate turnover in
    personnel. The current funding is through the direct Congressional
    appropriation via the Office of Naval Research. The lead physician
    investigator on this effort is Dr. Stephen Bartlett, Director of Organ
    Transplantation at the University of Maryland School of Medicine in
    Baltimore. The Navy laboratory supports Dr. Bartlett's efforts with
    laboratory investigations into the science of transplantation and
    mechanisms of rejection. The sum of $964,690 was received from fiscal
    year 2002 Congressional funding for these efforts. In addition to this,
    the NMRC supplied $250,000 from internal ``core competency'' dollars
    for a specific project, initiated in fiscal year 2002. In fiscal year
    2003, no core competency funds were available to continue this
    research. It is anticipated that approximately another $1 million will
    be received from direct Congressional appropriation for fiscal year
    2003.
        Question. Has the Navy conducted research on efforts to reduce the
    extent to which current procedures rely on immuno-suppressive drugs to
    combat rejection of tissue in transplant patients?
        Answer. A brief description of the work that is being performed at
    NMRC is provided:
        Project 1: Cytokine mediators of rejection in kidney transplant
    patients. This study performs real-time PCR to measure low levels of
    inflammatory molecules, such as cytokines that may predict rejection
    among actual patients receiving clinical kidney transplants who undergo
    periodic surveillance kidney biopsies. Specimens are obtained in a
    clinical program at the University of Maryland Transplant Program and
    transported to laboratories at the NMRC in Bethesda.
        Project 2: Cytokine mediation of rejection in primate composite
    tissue transplant. Pre-clinical research at the University of Maryland
    School of Medicine involves transplantation of complex tissues (bone,
    muscle and skin) in primates. The Navy research laboratories perform
    assays on biopsied tissue, looking at mediators of information and
    rejection. Tailored immunosuppressive therapies are being developed and
    studied featuring an anti-CD154 ligand to block the pathways of immune
    rejection.
        Project 3: Studies into the mechanism of action of anti-CD154
    ligand--Studies into the mechanisms of thrombotic complications with
    the use of anti-CD154 ligand. Currently, available supplies of anti-
    CD154 ligand do inhibit immune recognition, but may also cause
    activation of platelets leading to clinical thrombosis. These
    investigations look at the mechanisms involved in both lymphocyte
    blockade, as well as the mechanisms of thrombosis.
        Project 4: Cell-signaling mechanisms after CD154 binding. This
    study is funded by core capability money from fiscal year 2002 and
    looks at the cell-signaling mechanism after CD154 binds the lymphocyte
    to look for potential targets for blockade of lymphocyte activation. A
    skin transplant model in mice is being developed and potential
    therapies will be tested in the mice model and available for use in the
    primate model currently at the University of Maryland. In addition to
    the above projects, funding has been requested from ONR for studies
    into the problem of ischemia/re-perfusion injury, which injures tissues
    both in the hemorrhagic-shock battle field situation, as well as
    transplantation of harvested tissues.
        Additional techniques for immune suppression, including the use of
    immature dendritic cells, bone marrow cells, expanded bone marrow
    cells, other ligands with inhibitory properties against lymphocyte
    activation, are in the preparatory stages pending funding availability.
        Question. Does the Navy plan to extend this program to the stage of
    human clinical trials?
        Answer. The Navy would like to see advances in the pre-clinical
    biology of ``tolerance'' inducing molecules so that clinical trials can
    be conducted. More pre-clinical science, however, needs to be
    performed, including animal models. There are many potentially
    interesting avenues of investigation, which require collaboration with
    university laboratories and biotechnology companies.
        Question. Are you aware of the clinical research and experience in
    human hand-transplantation at the University of Louisville and Jewish
    Hospital in Louisville, Kentucky?
        Answer. The Combat Injury and Tissue Repair Program of the NMRC has
    had informal contacts with the University of Louisville Jewish Hospital
    in Louisville, Kentucky. There is interest on both sides in conducting
    collaborative efforts into the pre-clinical biology of tolerance.
    Currently, there is no funding for such collaboration, although both
    sides see scientific merit. Other collaborations exist with other
    universities that also show promise and need further development.

                                     ______

                Questions Submitted by Senator Richard C. Shelby

                           PATIENT PRIVACY (TRICARE)

        Question. I would like to get your comments about several concerns
    and questions I have related to the December 14, 2002 break-in of the
    offices of TriWest, a TRICARE contractor. I am told that TriWest did
    not notify the Department of Defense of the break-in and theft of
    personal information of over 500,000 TRICARE beneficiaries for almost a
    week after the event. Apparently, TriWest didn't have even basic
    security equipment--guards, locks, cameras--and, as a result, this
    incident amounts to the biggest identity theft in U.S. history.
        Is this information true?
        Has the Department of Defense finished its investigation of this
    case and have sanctions been levied against TriWest or punitive actions
    taken against TRICARE officials?
        Answer. The criminal investigation is being conducted by the
    Defense Criminal Investigative Service (DCIS) and the Federal Bureau of
    Investigation (FBI), in coordination with other Federal and local law
    enforcement agencies. The Assistant Secretary of Defense, Health
    Affairs [ASD(HA)] directed the Services and TRICARE Managed Care
    Support Contractors to conduct an assessment of their information
    security safeguards using a matrix composed of Defense Information
    Systems Agency physical security requirements and industry best
    practices. TRICARE Management Activity (TMA) conducted on-site
    validation of these assessments. The ASD(HA) asked the DOD Inspector
    General to conduct facility security evaluations and a draft report is
    expected by July 2003.
        Sensitive information pertaining to TRICARE beneficiaries is
    maintained by TRICARE contractors subject to the Privacy Act of 1974,
    as implemented by the DOD Privacy Program (DOD 5400.11-R). The Act
    provides criminal penalties for any contractor or contractor employee
    who willfully discloses such protected information, in any manner, to
    any person or agency not entitled to receive the information. The Act
    also provides for civil penalties against DOD if it is determined that
    the Department (or contractor) intentionally or willfully failed to
    comply with the Privacy Act. To date, no sanctions have been levied
    upon or punitive actions taken against TriWest or TRICARE officials.
    The investigation is still ongoing, and its findings are pending.
        Question. Would you please share what you can about the lessons
    learned as a result of this incident and the steps the Department and
    the TRICARE organization and its contractors are taking to guarantee
    beneficiary privacy?
        Answer. Maintaining information security controls and awareness has
    always been a critical priority for the senior leadership of the
    Military Health System (MHS), in the interest of both national security
    and beneficiary privacy.
        Some of the lessons learned as a result of the TriWest incident
    include:
      --Scrutinized security practices across the entire MHS;
      --Emphasized the necessity of staying alert to new information
            security threats; and
      --TriWest widely publicized a new process whereby individual
            beneficiaries may, through TriWest, seek to place fraud alerts
            on their records at national credit bureaus.
        Some of the steps taken by the Department and its TRICARE
    contractors to enhance beneficiary privacy include:
      --Led and coordinated a health care information security assessment
            at MTFs and contractor locations;
      --Reviewed existing procedures at all locations;
      --Ensured physical security of facilities that house beneficiary
            information;
      --Conducted on-site validations of its contractors' assessments;
      --Initiated DOD Inspector General facility physical security
            evaluations;
      --Verified that DOD health information systems are compliant with
            Health Insurance Portability and Accountability Act Protected
            Health Information requirements;
      --Established plan of action for TRICARE contractors to correct
            deficiencies of the facility security assessment;
      --Strengthened the overall security posture of the Military Health
            System (TRICARE Management Activity, its contractors, and
            Military Treatment Facilities); and
      --Broadened the scope of information assurance and security programs.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                          MEDICAL TREATMENT FACILITIES

        Question. Healthcare, pay, and housing are the greatest Quality of
    Life issues for our troops and their families. With the numbers of
    health care staff deployed from your Military Treatment Facilities,
    what strategies did you use to effectively plan and care for
    beneficiaries back home?
        Answer. Navy Medicine implemented core doctrine and conducted
    intense scrutiny of Military Treatment Facilities (MTFs) services
    availability. We identified the appropriate reservists to support the
    Military Treatment Facilities (MTFs) in maintaining services, in some
    cases adding contract personnel. Navy Medicine made every effort to
    take care of our patients in the MTFs, and assisted in both referral
    and care management for those patients that required care in the local
    healthcare network. Each week we tracked the availability of services
    at each MTF. Personnel (both active duty and reservists) exerted
    extraordinary efforts (which were possible in the short term but would
    not be sustainable indefinitely) to ensure access to care was
    maintained at all MTFs. The health care team felt the same devotion to
    their special duties during the conflict as did the deployed forces.
    They recognized that providing care for both returning casualties and
    local beneficiaries was their part in the war effort. For these
    reasons, individual productivity was particularly high and resulted in
    minimal reductions in health care access. A comprehensive survey of
    activated reservists and MTF operations during Operation Iraqi Freedom
    is now underway to fully assess the productivity and effectiveness of
    our MTFs in ensuring that access to care was maintained for all
    beneficiaries.
        Question. How are you able to address the needs of patients coming
    in from the battlefields and is this affecting the care of
    beneficiaries seeking regular care?
        Answer. We have been able to maintain services required to address
    the needs of both patients coming in from the battlefields and those
    seeking regular care through significant deliberate planning. We
    implemented core doctrine and deployed active duty forces that were
    well trained in providing advanced medical care in the field. As a
    result, intense scrutiny of Military Treatment Facilities (MTFs)
    services availability and their ability to sustain the Graduate Medical
    Education (GME) programs were conducted, and we identified the
    appropriate reservists to support the Military Treatment Facilities
    (MTFs) in maintaining services and future readiness via sustainment of
    GME programs.
        Question. What authority were you given to back-fill your vacancies
    and are the funds sufficient to attain that goal?
        Answer. Navy Medicine issued $18 million that was originally
    targeted for our Maintenance of Real Property, Facility Projects in
    order to provide MTFs with the funding needed to obtain contract
    physician and medical personnel needed as backfill in addition to the
    50 percent Reserve Recall. The commands were able to obligate $11
    million of that $18 million and obtained critical physician specialists
    on short timeframe contracts and other medical support personnel.
        Question. What measurements were used in determining what the
    services were able to back-fill and how does that compare to current
    requirements?
        Answer. The measurement tool used to assess services requiring
    augmentation was based on weekly reports that monitored facility
    services by beneficiary category i.e. AD/ADFM/RET/RETFM. This tool
    provided the level of detail needed to reflect which MTFs were in need
    of support based on the services identified, taking into account
    geographic issues related to Network availability and GME program
    sustainability. The report is being utilized to follow the flow of
    returning forces ensuring efficient demobilization of reserve personnel
    while maintaining MTF service availability.

                           RETENTION AND RECRUITMENT

        Question. With increasing deployments in support of Operation Iraqi
    Freedom and the Global War on Terrorism, can you describe your overall
    recruitment and retention status of the Medical Department in each of
    your services? What specific corps or specialties are of most concern?
        Answer. There is no way to predict the influence the current
    increased operational tempo will have on recruiting and retention.
    Because active duty personnel must request release from active duty 9-
    12 months in advance in order to arrange for their billet to be
    backfilled, the effect upon release from active duty rates won't be
    known until approximately spring/summer 2004.
    Dental Corps: The Dental Corps is currently undermanned at 93 percent
        The loss rate for dentists in fiscal year 2002 was 12.2 percent,
    which was above the 11-year average of 10.8 percent. Projections are
    for increasing shortfalls with manning at 90 percent or below at the
    end of fiscal year 2003.
        Accession goals have not been reached over last 3 years; accessed
    only 85 percent of goal. Most significant shortfall is in the Direct
    (non-scholarship) accession category.
        Recruiting goals are not being met with only 10 percent of the goal
    for Direct accessions (3/39), Reserve Recalls (2/7) and 1925i Dental
    Student program (0/5) met midway through the third quarter fiscal year
    2003. The primary accession pipelines for Navy dentists are the
    scholarship programs. The Health Professions Scholarship Program (HPSP)
    and the Health Services Collegiate Program (HSCP) have both been
    successful in meeting 100 percent of goal for fiscal year 2003 and we
    expect to access 67 HPSP and 22 HSCP students upon graduation from
    dental school. HSCP has in the past been a significant but not the
    largest source of accessions for the Dental Corps. Currently only 25
    percent of the combined fiscal year 2004/05 recruiting goal has been
    attained for HSCP accessions in fiscal year 2004 (12/25) and fiscal
    year 2005 (0/25). Interest in this program has significantly declined
    due to the increasing cost of dental school education, which continues
    to diminish the benefits offered through this program.
        Retention rate at first decision point for junior officers steadily
    declined over past 6 years; low point was 38 percent in fiscal year
    2001 from high of 64 percent in fiscal year 1995. Disparity between
    military and civilian pay and education debt are major factors in low
    retention rates.

    Medical Corps
        The Medical Corps continues to have difficulty in retaining certain
    specialties. The Medical Corps has less than 80 percent manning in
    Anesthesia, Radiology, General Surgery, Pathology, and Radiation
    Oncology. Internal Medicine and subspecialties (84 percent) and
    Dermatology (83 percent) are near the critical point of under manning.
        Inability to access or retain specialties noted above can be
    attributed to significant military-civilian pay gaps and declining
    number of quality of work attributes that once made practicing in Navy
    Medicine enticing over the private sector (e.g., increased operational
    tempo). Additionally, the changing face of medicine in the civilian
    sector (e.g., fewer applicants for medical school and even fewer
    medical school graduates going into the above specialties) is affecting
    Navy Medicine as well.
        The primary pipeline for Navy physicians is the Health Professions
    Scholarship Program (HPSP), which brings in 300 of the 350 individuals
    entering as medical students. The HPSP recruiting goal for fiscal year
    2003 is 300. The Navy is behind in recruiting, in that by May, there
    are usually about 150 recruited. Presently there are only 51. It should
    be noted that not only is the number of HPSP recruits diminishing, but
    the quality has also decreased when utilizing MCAT scores as an
    indicator of quality. In he past, HPSP recipients had MCAT scores of
    26-30. Applicants with scores as low as 22 are being considered in
    order to fill quotas.

    Medical Service Corps
        Retention in the Medical Service Corps is good overall. End of
    fiscal year 2002 manning was at 98.5 percent with projections for the
    next two years at or near 98 percent manning. However, difficulties
    remain in retaining highly skilled officers in a variety of clinical
    and scientific professions.
        The Medical Service Corps is comprised of 32 different health care
    specialties in administrative, clinical, and scientific fields. The
    education requirements are unique for each field; most require graduate
    level degrees, many at the doctoral level.
        Biochemistry, Entomology, and Podiatry are undermanned by more than
    10 percent. Average yearly loss rates are high in Biochemistry,
    Physiology, Environmental Health, Dietetics, Optometry, Pharmacy, and
    Psychology. Loss rates this year are very high for Microbiologists &
    Social Workers.
        The Medical Service Corps does not have available to them retention
    tools or special pays for scientists and very limited ones for
    clinicians such as Optometrists, Pharmacists, and Podiatrists.

    Nurse Corps
        The Nurse Corps continues to be healthy considering the national
    nursing shortage. The affect of a decreasing number of students who
    choose nursing as a career and the ever-increasing demand for
    professional nursing services will need to be closely monitored to
    ensure that the Navy Nurse Corps is able to meet the requisite number
    and specialty skill mix.
        The successful ability of the Nurse Corps to meet requirements is
    due to concerted efforts in diversifying accession sources and
    increased retention as a direct result of pay incentives and graduate
    education opportunities.

    Hospital Corps
        HM and DT Retention has never been higher and we have met/fulfilled
    recruiting goals for the last two years. In the past two years our
    overall manning has significantly increased from 87 percent to 97
    percent.
        8404 HM E1-6 are on STOP LOSS per NAVOP 005/03 over 2,616 Sailors
    are affected by this program.
        Per the OPHOLD MSG NAVADMIN 083/03 all hospital corpsmen assigned
    to deployed USMC units, possessing NEC's 8403, 8404, 8425 and 8427 may
    be OPHELD.
        The HM Rating ended fiscal year 2002 at 95.8 percent manning
    (23,218 INV/24,320 BA or -1,102). The HM Rating has been undermanned
    since 1997 (low point was 89.1 percent manning as of end fiscal year
    2000), but has steadily increased to current end February 2003 of 97.1
    percent (23,843/24,553). The improved manning is the result of an
    increase in the HM A-School plan from a traditional 3,000 inputs to
    4,500 inputs per year along with a reduction in HM A-school attrition
    from 18 percent to 8 percent. Out year projections have the rating
    maintaining 98 percent manning for the next two years.
        As overall HM rating manning has improved, C school seats are
    increasingly being filled. Along with realignment of SRB and SDAP to
    retain existing and attract applicants, inventories in the shortfall
    NECs are steadily improving. Of the 40 distinct HM NECs, the following
    are critically manned (manning <90 percent) as of end February 2003.

    ------------------------------------------------------------------------
       NEC                NAME              INV      EPA      PCT      +/-
    ------------------------------------------------------------------------
      HM-8401 SAR TECH                       89      111       80      -22
      HM-8403 RECON IDC                      26       29       90       -3
      HM-8408 CARDIOVASULAR TECH             77      105       73      -28
      HM-8416 CLIN NUC MED TECH              59       70       84      -11
      HM-8425 SURFACE IDC                   868    1,020       85     -152
      HM-8427 RECON IDC                      43       70       61      -27
      HM-8432 PREV MED TECH                 642      710       90      -68
      HM-8452 ADV XRAY TECH                 566      654       87      -88
      HM-8466 PHYS THERAPY TECH             201      252       80      -51
      HM-8467 OCC THERAPY TECH               12       19       63       -7
      HM-8478 MED REPAIR TECH               197      270       73      -73
      HM-8485 PSYCH TECH                    273      376       71     -103
      HM-8486 UROLOGY TECH                   68       87       78      -19
      HM-8489 ORTHO TECH                    124      153       81      -29
      HM-8492 HM SEAL                       124      164       76      -20
      HM-8493 HM DIVER                       83      106       78      -23
      HM-8494 HM DIVER IDC                   69       80       86      -11
      HM-8495 DERMATOLOGY TECH               40       54       74      -14
      HM-8506 LAB TECH                    1,246    1,594       78     -348
      HM-8541 RESP THER TECH                102      147       69      -45
    ------------------------------------------------------------------------

    Dental Technicians
      --Overall DT rating manning has held constant over the last several
            years with end February 2003 inventory at 102 percent (3,177/
            3,150). The DT NECs listed below are critically manned.

    ------------------------------------------------------------------------
       NEC                NAME              INV      EPA      PCT      +/-
    ------------------------------------------------------------------------
      DT-8703 DT ADMIN TECH                 241      268       90      -27
      DT-8708 DT HYGIENE TECH                53       84       63      -31
      DT-8753 DT LAB TECH                   100      113       89      -13
      DT-8783 DT SURGICAL TECH               99      111       89      -12
    ------------------------------------------------------------------------

        The shortages in these NECs have been caused by limited
    availability of school quotas at tri-service schools. The exception is
    DT Hygiene Tech, established in fiscal year 2000. The Hygiene Tech
    school pipeline is two years long and inventory has been slowly growing
    toward the billet target. For the remaining shortages, efforts continue
    to obtain quotas at the tri-service schools to ensure that we obtain
    the seat increases we need to maintain the inventory.
        Question. Did the Critical Skills Retention Bonus given for this
    year help these specialties? In light of shortages and the disparity
    between military and civilian salaries, how have you planned for
    additional retention bonuses in future years?
        Answer. A detailed explanation is provided by Corps in order to
    detail the impact of the CSRB.

    Dental Corps
        When the CSRB was combined with the renegotiation of Dental Officer
    Multi-year Bonus (DOMRB) contracts, the effect was increased obligation
    for those that took DOMRB contracts. This in effect tied the one-year
    CSRB to a multi-year obligation, having some positive effect. However,
    a more comprehensive pay plan is needed for the long term.
      --The NDAA fiscal year 2003 increased the caps on the Dental Officer
            Multi-year Retention Bonus (DOMRB).
      --Fiscal year 2004 and fiscal year 2005 dental pay plans need to take
            advantage of the increase in the cap for the DOMRB as provided
            by the fiscal year 2003 NDAA which would help bring pay to
            higher levels, although are not in parity with civilian pay,
            demonstrate a commitment by Navy to increase compensation.
            However, in fiscal year 2004, funds have not been budgeted for
            increases in Medical Special Pays.
      --The Health Professions Incentives Work Group (HIPWG) is working on
            a ULB fiscal year 2006 proposal that will raise Additional
            Special Pay (ASP) for targeted year groups to enhance retention
            after the first decision point for junior officers and after
            training obligations are paid off by mid-career officers. This
            ULB also proposes retaining ASP while in a training (DUINS)
            status in efforts to attract more qualified applicants for
            residency training. This proposal is under review within the
            Department.
      --A comprehensive pay plan is needed to enhance retention and narrow
            the civilian-military pay gap. In the absence of such a plan
            and in recognition that the status of the Incentive
            Optimization Plan previously worked by OSD/TMA is unknown, the
            Navy has proposed utilizing a multi-year dental CSRB to
            critical shortages, namely dental officers with 3 to 7 years of
            service. This is designed to address a significant downward
            trend in retention of LT/LCDR General Dentists (anecdotally due
            to high debt load). This shortage in turn has significantly
            diminished our pool of applicants for residency training.
            Applications for post-graduate residency training are down 54
            percent over past 10 years, which has resulted in increasing
            difficulty of producing specialists with the skills required to
            meet mission requirements. This proposal is under review within
            the Department.

    Medical Corps
        The CSRB helped retain some individuals in Anesthesia, Radiology,
    Orthopedics, and General Surgery who would have otherwise gotten out of
    the Navy. Because the CSRB was limited to a one year contract, the long
    term benefit is minimal.
        The fiscal year 2003 NDAA raised the maximum on special pays to
    increase flexibility and utility of special pays. Development of a
    special pay plan for fiscal year 2005 by OOMC and N131 is in progress
    which takes advantage of the new maximums and increases the Multiyear
    Special Pay (MSP) to levels that although not in parity with civilian
    pay, demonstrates a commitment by the Navy to increase compensation.
    Because of the process involved in creating a DOD Pay Plan, the final
    pay plan for fiscal year 2005 may not emphasize the Navy's needs,
    reflecting instead the overall needs of DOD (Air Force and Army.) This
    proposal is under review within the Department.

    Medical Service Corps
        The Critical Skills Retention Bonus was not offered to any of the
    Medical Service Corps specialties.
        During fiscal year 2001, DOD (HA) provided guidance allowing the
    Services to begin paying an Optometry Retention Bonus and a Pharmacy
    Special Pay based on each Service's ``own accession requirements and
    capabilities.'' The Army and Air Force have funded the new pays. Due to
    funding constraints, the Navy has not yet begun paying the Optometry
    Retention Bonus or the Pharmacy Special Pay, however, the Navy has
    planned and budgeted for future funding of these bonuses and specialty
    pays.

    Nurse Corps
        The Critical Skills Retention Bonus was offered to qualified nurses
    resulting in acceptance rates of 87 percent for Certified Registered
    Nurse Anesthetists (CRNAs) and 98 percent for Perioperative Nurses. For
    the CRNAs, it has been a positive influence for staying beyond their
    obligated service period. We are presently at end-strength in both
    communities based on a combination of factors such as special pays,
    scope of practice satisfaction and a focus on quality of life issues.
    Therefore because the process involved in creating a DOD Pay Plan must
    reflect the overall needs of DOD (including Army and Air Force,) the
    final pay plan for fiscal year 2005 may not emphasize the Navy's
    specific requirements.
        The fiscal year 2003 NDAA raised the maximum on special pays to
    increase flexibility and utility of special pays. Development of a
    special pay plan for fiscal year 2005 by the Nurse Corps Office and
    N131 is currently under review within the Department. The proposal,
    which takes advantage of the new maximums and increases the Nurse
    Accession Bonus and CRNA Incentive Pay to levels that although not in
    parity with civilian pay, demonstrates a commitment by the Navy to
    increase compensation.

    Hospital Corps
        We are working on an increase in our critical NEC's in SRB, SDAP
    and accelerated advancement programs.
        Question. Are there recruitment and retention issues within certain
    specialties or corps? If so, what are your recommendations to address
    this in the future?
        Answer.

    Dental Corps
        As a result of a significant downward trend in retention of LT/LCDR
    General Dentists coupled with significant under execution of CNRC DC
    accessions, the Dental Corps is undermanned.
      --Dental Corps overall manning has been trending downward for the
            last three years, ending fiscal year 2002 at 94.4 percent
            (1,294 INV/1,370 BA or -76). The EFY 2003 projection is
            estimated at <90 percent.
      --A BUMED-BUPERS working group is evaluating the following
            recommendations for the future: increase in HPSP Scholarships
            from 70 to 85 per year, establish a special pay that targets
            General Dentists with 3 to 7 years of service; establish Dental
            Corps Health Professions Loan Repayment (HPLRP) Program;
            increasing the number of years of service for statutory
            retirement to 40 years of service for 06s, along with raising
            the age limit to 68. Active Duty dentists tend to leave the
            service at 22 years vice 30 in order to enter the civilian
            market at a competitive age range. If given the option of a
            career for an additional ten years of service, many dentists
            would choose to stay on Active Duty. Prior to approval
            additional study is required on how this will impact the 06
            promotion cycle.
      --The shortage of General Dentists has directly impacted the Oral
            Surgery and Endodontic communities, which are also
            significantly undermanned. Since we train the vast majority of
            our specialists from within, the shortage of General dentists
            and the increase in loss rates has resulted in a reduction in
            the numbers of officers available to enter the training
            pipeline.

    ----------------------------------------------------------------------------------------------------------------
                                                                                                     Fiscal   Fiscal
                      Corps Specialty (PSUB)                      INV       BA      PCT      +/-      Year     Year
                                                                                                      2004     2005
    ----------------------------------------------------------------------------------------------------------------
    DC--Dentist (1,700).......................................      486      594       82     -108       80       78
    DC--Oral Surg(1,750J/K)...................................       66       82       80      -16       78       72
    DC--Endodontist (1,710J/K)................................       44       52       85       -8       83       80
    ----------------------------------------------------------------------------------------------------------------

      --The remaining Dental Corps specialties are stable at this time with
            sufficient gains to compensate for losses, but that will take a
            turn for the worse if the problems with General Dentist
            retention and accessions are not corrected, as this is the
            applicant pool for specialty training.

    Medical Corps
        Although pay is just one part of the benefits of a military career,
    the civilian to military pay gaps are so large in some specialties that
    it is difficult to recruit or retain someone after completion of their
    obligated service for training. A comparison of civilian and military
    average pays is as follows (this data was retrieved from an internet
    physician pay site used by medical students):

    ------------------------------------------------------------------------
                                         Civilian    LCDR Mil
                 Specialty                  Pay         Pay     Differential
    ------------------------------------------------------------------------
    Anesthesia........................    $278,802    $140,556     $138,246
    Radiology.........................     319,380     140,556      178,824
    General Surgery...................     261,276     133,556      127,720
    Pathology.........................     197,300     120,556       76,744
    Internal Medicine.................     160,318     118,556       41,762
    Dermatology.......................     232,000     122,556      109,444
    Orthopedics.......................     346,224     140,556      205,668
    Neurosurgery......................     438,426     140,556      297,870
    ------------------------------------------------------------------------

        To improve accessions (in the above specialties), the following
    monetary and marketing tools are being evaluated by CNP/BUMED
    Integrated Process Team (IPT):
      --A Health Professional Loan Repayment Program (HPLRP).
      --An increase in recall and direct accession goals for medical
            officers.
      --An increase in accession bonuses for health professionals from
            $30,000 to an $80,000 cap for high demand specialties.
      --An increase in Incentive Specialty Pay (ISP) and Multiyear
            Specialty Pay (MSP) to decrease the pay gap. Emphasis is being
            placed on increasing MSP so that retention may be improved.

    Medical Service Corps
        All specialties have met (or are expected to meet) fiscal year 2003
    recruiting goals except for:
      --Entomology (Goal: 4; 0 attained) have not met direct accession goal
            since fiscal year 1999. There are limited Medical Entomology
            graduate programs in the United States. Fiscal year 2002
            manning was 89 percent.
      --Physiology (Goal: 2; 0 attained) have not met direct accession goal
            since fiscal year 1998. Fiscal year 2002 manning was 86
            percent.
        Use of the Health Services Collegiate Program (HSCP), a Navy
    student pipeline program for Entomology was instituted in fiscal year
    2002 and for Physiology in fiscal year 2003.
        Retention in the Medical Service Corps is good overall. However,
    difficulties remain in retaining highly skilled officers in a variety
    of clinical and scientific professions.
        Explore the possible use of Engineering and Scientific Career
    Continuation Pay (U.S. Code: 37, Section 315) to improve the retention
    of our highly skilled scientific officer.
        Other tools being considered:
      --Health Professional Loan Repayment Program (HPLRP). Those HPLRP
            scholarships allocated to Medical Service Corps will be used
            for both retention and accession.

    Nurse Corps
        The Active Duty force is expected to meet fiscal year 2003
    recruiting goal.
        The Reserve force has met 61 percent of the fiscal year 2003
    recruiting goal, maintaining the same pace as last year. Successful
    recruiting incentives for reservists in the critically undermanned
    specialties include: The $5,000 accession bonus and loan repayment and
    stipend programs for graduate education.
        The BUMED Integrated Process Team (IPT) will evaluate two
    initiatives to improve the end-strength of the Reserve force:
      --Allocating the $5,000 accession bonus for all new nursing graduates
            to the Reserve force. With the civilian recruiting bonuses and
            loan repayment programs for student graduates, new nurses are
            deferring entry into the Navy Nurse Corps Reserves until they
            gain the one-year experience required to qualify for a bonus.
      --Instituting ``pipeline'' scholarship nursing programs for the
            reserve enlisted component similar to those available to active
            duty enlisted.

    Hospital Corps
        No recruitment issues as CNRC has been able to fill requirements.
        We have increased retention and programs have been put in place
    directing Sailors into our undermanned NEC's. Some of the programs
    instituted include job fairs, Detailers visits along with visits from
    the Force Master Chief.
        Question. Have incentive and special pays helped with specific
    corps or specialties?
        Answer.

    Dental Corps
        Although pay is just a portion of the military benefits package,
    the dental military-civilian pay disparity is so large in certain
    specialties that it is very difficult to recruit or retain a dental
    officer after completion of their obligated service for training.
      --There was a slight enhancement in overall retention as a result of
            increases in dental ASP in 1997 and the initial offering of
            DOMRB in 1998 when compared to previous years, but that effect
            has since worn off. Despite the introduction of the DOMRB and
            increase in ASP rates, the overall loss rate continues to climb
            to the highest it has been at 12.2 percent in fiscal year 2002,
            higher than the 11-year average of 10.8 percent. The majority
            of losses are junior officers (LT-03) releasing from active
            duty at the completion of their initial obligated service.
            These year groups are not eligible for the DOMRB at this point
            in their careers and the current ASP rates are too low to
            impact their decision to stay on active duty.

    Medical Corps
        There is no study that correlates retention and accession with
    special pays.

    Medical Service Corps
        The Medical Service Corps has very limited incentive and special
    pays.
      --Optometry Special Pay (U.S. Code: Title 37, Section 302a).--Each
            optometry is entitled to a special pay at the rate of $100 a
            month. This special pay has not been increased in thirty years
            and therefore has lost value as an incentive or retention tool.
            Fiscal year 2001 and 2002 manning was 88 percent and 98
            percent. The manning is expected to drop below 98 percent
            during fiscal year 2003.
      --Psychologist and Nonphysician Health Care Providers Special Pay
            (U.S. Code: Title 37, Section 302c).--This Special Pay is
            better known as Board Certification Pay. Board Certified
            Nonphysician Health Care Providers are entitled to a pay of
            $2,000 per year, if the officer has less than 10 years of
            creditable service; $2,500 per year (10-12 yrs); $3,000 per
            year (12-14 yrs); $4,000 per year (14-18 yrs); and $5,000 per
            year (18 or more). This special pay does not become a
            significant annual amount until late in an officer's career and
            therefore has a minimal impact as a retention tool. The Navy is
            manned at 70 percent licensed psychologists.
      --Accession Bonus for Pharmacy Officers (U.S. Code: Title 37, Section
            302j).--This accession incentive of $30,000 may be paid to a
            person who is a graduate of an accredited pharmacy school and
            who, executes a written agreement to accept a commission as an
            officer and remain on active duty for a period of not less that
            four years. This accession bonus was first used in fiscal year
            2002 and accession quotas were met in that year. Long-term
            effectiveness as a successful accession incentive has not yet
            been established. Fiscal year 2002 manning was 96 percent. The
            manning is expected to drop below 96 percent during fiscal year
            2003.

    Nurse Corps
        The Nurse Accession Bonus, Incentive Pay for Certified Registered
    Nurse Anesthetists (CRNAs), and Board Certification Pay (for those
    eligible) contribute to successful recruitment and retention efforts.
    Current CRNA manning is 108 percent. Manning is expected to drop to 100
    percent throughout the year as members depart.
        The increase of the maximum allowable compensation amount under
    NDAA for the CRNA Incentive Pay and the Accession Bonus will further
    enhance our competitive edge in the nursing market.

    Hospital Corps
        When incentive and special pays have been put in place for
    undermanned specialties, accessions have increased.
        Psychiatry Technician and Respiratory Therapy Technician
    communities manning increased, 36 percent and 28 percent respectively,
    after implementation of the Selective Training and Reenlistment (STAR)
    Program and increased Selective Reenlistment Bonus.
        Question. How does the fiscal year 2004 budget request address your
    recruitment and retention goals?
        Answer.

    Medical Service Corps
        The fiscal year 2004 budget request includes funding for the
    Optometry Retention Bonus and the Pharmacy Special Pay (both
    discretionary pays).

    Nurse Corps
        The fiscal year 2004 budget request includes increases to both the
    Nurse Accession Bonus and the Incentive Pay for Certified Registered
    Nurse Anesthetists.

                         FORCE HEALTH PROTECTION (FHP)

        Question. As a result of concerns discovered after the Gulf War,
    the Department created a Force Health Protection system designed to
    properly monitor and treat our military personnel. What aspects of the
    Department's Force Health Protection system have been implemented to
    date? What are the differences between the system during the Gulf War,
    Operation Iraqi Freedom, and Operation Enduring Freedom and Operation
    Noble Eagle?
        Answer. There has been a fundamental shift in Navy Medicine from
    treating illness, to focusing on prevention and health. Our mission is
    to create a healthy and fit force, so that when we deploy a pair of
    muddy boots, the Sailor or Marine wearing them is physically, mentally
    and socially able to accomplish any mission our nation calls upon them
    to perform. This focus on prevention and health includes the delivery
    of care to the spouses and families at home because by caring for them,
    our warriors can focus on the fight. The Navy Medicine ``office place''
    is the battlefield because our Sailors and Marines deserve the best
    possible protection from all potential hazards that could prevent
    mission execution. A critical element of our FHP continuum is having in
    place, along with the Department of Veterans Affairs (DVA), mechanisms
    for making sure that people who become ill after deployment are
    evaluated fully. Navy Medicine has several established mechanisms with
    the DVA regarding post deployment illnesses. Between the Gulf War and
    Operation Noble Eagle, several specific Force Health Protection (FHP)
    measures were implemented. These include: Pre-Deployment Health
    Assessment with the DD2795, Disease and Non-Battle Injury (DNBI)
    surveillance, Post-Deployment Health Assessment with the DD2796, pre-
    and post-deployment serum archival at the DOD Serum Repository, anthrax
    and smallpox vaccination programs, occupational and environmental
    health surveillance, formation of specialized deployable teams for FHP
    (Navy Forward Deployable Preventive Medicine Units, Theater Army
    Medical Laboratory, and Air Force Theater Medical Surveillance Team),
    and the Post Deployment Health Clinical Practice Guideline. Just before
    Operation Iraqi Freedom, the Joint Medical Work Station (JMeWS) was
    deployed in the CENTCOM theater of operations, providing the capability
    to collect patient encounters, DNBI, and general medical command and
    control reports. With over 26,000 patient encounters and 1,000 DNBI
    reports, this system has provided a substantial analysis and archival
    tool for the combatant commanders and senior leadership.

                                  OPTIMIZATION

        Question. Congress initiated optimization funds to provide
    flexibility to the Surgeons General to invest in additional
    capabilities and technologies that would also result in future savings.
    It is my understanding that a portion of these funds are being withheld
    from the Services. Can you please tell the Committee how much
    Optimization funding is being withheld from your service, what are the
    plans for distributing the funds, and why funds since fiscal year 2001
    are being withheld?
        Answer. In fiscal year 2002 59 Optimization Projects were approved
    but only one was funded before April 2002. Total funding for fiscal
    year 2002 was $49.6 million. Twenty-seven of the projects were funded
    in late September 2002 and are in their infancy. Since most of the
    projects involved personnel actions, up to six months passed before
    personnel were in place due to required DOD civilian hiring processes.
    Hard evidence of financial return on investment is not yet available.
    Anecdotal positive feedback, however, is plentiful, especially in the
    following areas:
      --Case management ($8.5 million fiscal year 2002).--All facilities
            are reporting that the recently hired case managers are
            champions for the transition from intervention to prevention.
            Commanders have commented that case management is ``one of the
            best BUMED programs in 30 years.'' The primary barrier to
            success is the lack of integration of case management software
            with the Composite Health Care System (CHCS).
      --Clinic manager's course ($400,000 fiscal year 2002).--Over 500
            personnel have benefited from the week long course and 80
            percent of participants reported in follow up surveys that the
            course adequately prepared them to implement optimization
            concepts within their clinics. Barriers to achievement of the
            goal of improved clinic effectiveness include lack of reliable,
            readily available performance data and high turnover of clinic
            management teams.
      --Population Health Website ($400,000 fiscal year 2002).--Access to
            real time patient level data regarding disease prevalence, care
            provided, and patient panel demographics was viewed as
            ``extremely valuable'' by the 103 users trained thus far. Key
            to success is WEB access (begun January 2003) and dedicated
            training.
        $11.4 million was devoted to critical advances in Medical Practice
    supporting longer term goals of sustaining quality and reducing
    invasive procedures where possible. The remaining $29.3 million was
    devoted to targeted improvements in the Primary Care Product Line,
    Birth Product Line and Mental Health Product Line as well as specific
    interventions designed to ensure continued excellence in training in
    mission-critical specialties (radiology and cardiology). Many of the
    initiatives are designed to correct staffing ratios allowing clinicians
    more time to devote to direct patient care. A full review of financial
    and non-financial performance measures is underway for each of the
    projects but conclusive data is not yet available given the recent
    start up of the vast majority of the initiatives.
        Question. How have you benefited from optimization funds? What
    projects are on hold because OSD has not released funding?
        Answer. Navy Medicine has not delayed projects due to OSD
    withholding funds.
        Question. What are the projected projects using the proposed $90
    million in the fiscal year 2004 budget request?
        Answer. If the Navy's share of the $90 million in the fiscal year
    2004 budget request amounted to $30 million, the following is the
    current proposal for the use of funds. Continuation of current
    optimization projects is expected to require $16.6 million, planned
    advances in medical practices (AMP) programs will require an additional
    $10 million, and focused improvements in perinatal care, early mental
    health intervention and training of clinic managers will require the
    final $3.4 million. A full review of the proposed use of the funds is
    underway as part of the annual budget and business planning process.

                                     ______

            Questions Submitted to Lieutenant General James B. Peake
                   Questions Submitted by Senator Ted Stevens

                        DEPLOYMENT OF MEDICAL PERSONNEL

        Question. The staff's discussions with The Surgeons General
    indicate that the Services have backfilled for deployed medical
    personnel at the Medical Treatment Facilities at varying levels.
        Some of the Services are relying more heavily on private sector
    care rather than backfilling for deployed medical personnel.
        To what extent has the recent deployment of military medical
    personnel affected access to care at military treatment facilities?
        Answer. Recent deployments of medical personnel have had varying
    impacts upon access to care in individual Army medical treatment
    facilities (MTFs). With the initial deployment of medical personnel,
    there was an approximate 15-30 day underlap until Reserve Component
    (RC) personnel arrived at the various MTFs. Additionally, RC backfills
    were authorized only at approximately 50 percent of the deployed
    losses. Although some have indicated that there should be no impact on
    access to care because medical personnel were deployed as well as
    troops (i.e., patients), this assumption is flawed. Troops are
    generally the healthiest of the patient population served and do not
    comprise a significant portion of the care provided at any one MTF. In
    addition, at several posts, the medical personnel deployed long before
    the troop populations mobilized.
        While MTFs had varying strategies in dealing with these significant
    shortages, there was some impact on access to routine and wellness
    care. Strategies included utilization of the network, hiring/
    contracting for civilian positions and reserve backfill. Success was
    limited by network inadequacy, inability to hire, and insufficient
    reserve backfills. Success varied by location due to the variability of
    these factors.
        Question. What are you doing to ensure adequate access to care
    during this time?
        Answer. Most MTFs have skillfully attempted to manage the access to
    care issue by closure/consolidation of clinics, beds and operating
    rooms; shifting of care to the network; extending shifts for both
    physicians and nurses; double-booking appointments; overtime, including
    mandatory weekend overtime; increasing resource-sharing contracts and
    increasing contract hires. Urgent care access was maintained, but all
    MTFs have had varying degrees of success in maintaining access to
    routine and wellness visits. They have managed to decrease the number
    and significance of access-to-care issues, but most MTFs continue to
    struggle with the issue.
        Question. What percentage of mobilized reservists in medical
    specialties are being used to backfill positions in the United States?
        Answer. The Reserve Component (RC) provided 22 percent of its
    mobilized medical specialties to backfill the Army's Active Component
    (AC) losses in the Medical Treatment Facilities (MTFs). This accounts
    for 1,631 reservists' backfilling AC personnel losses in MTFs out of
    the total mobilized RC medical force of 9,195. This does not take into
    consideration the physicians, dentists, and nurse anesthetists that are
    on a 90-day rotation policy. There are 485 scheduled 90-day rotators in
    the aforementioned 1,631 RC personnel backfill. To further compound the
    backfill requirements the Senior Civilian Leadership only authorized a
    50 percent backfill cap or one RC backfill for every two AC losses.
        Question. Are there shortages of personnel in some specialties?
        Answer. Yes.
        Question. If so, which specialties are undermanned and by how much?
        Answer. The Reserve Component (RC) backfill was initially
    undermanned by seven medical specialties for a total of sixteen
    personnel. These medical specialty shortages were Nuclear Medicine
    Officer, Pulmonary Disease Officer, Dermatologist, Allergist, Pediatric
    Cardiologist, Peripheral Vascular Surgeon, and ten Obstetrics Nurses.
    The 90-day rotation policy added additional requirements by having to
    rotate physicians, dentists, and nurse anesthetists. In the second 90-
    day rotation the following medical specialties were undermanned by an
    additional ninety-five physicians and dentists: three Urologists, an
    Obstetrician and Gynecologist, six Psychiatrists, thirty-six Family
    Physicians, six General Surgeons, five Thoracic Surgeons, five
    Orthopedic Surgeons, two Radiologists, five Emergency Physicians, and
    twenty-six Dentists.
        Question. Are there other ways of structuring the staffing of
    military medical units that might help address shortages in a few
    specialties, such as making increased use of civilian contractors or
    DOD civilian personnel in MTFs stateside?
        Answer. The staffing of Army Medical Treatment Facilities (MTF) is
    a mix of Active Duty military, direct hire civilians, and resource
    sharing/contract arrangements. The Active Duty component is based upon
    the wartime needs of the numbers and types of health care providers
    needed to staff the deploying medical support units (Professional
    Filler System and cadre hospital organizations). Many of the more
    expensive specialties required at the MTF are the same specialties
    needed for deployments. Even though more than 50 percent of the MTFs'
    staffing is non-military, this tends to be in specialties that can be
    afforded by the General Schedule payment tables. Beyond the direct hire
    civilian staffing, MTFs also form a number of resource sharing
    agreements and local contracts for services available in the area.
    These contracting efforts are in addition to the TRICARE network that
    may have some health care resources in the area. Healthcare providers
    not already engaged with the MTF are fulltime engaged in their own
    practices with limited expansion capability. The sudden demand for
    additional health care services in an area is an immediate shock and
    drain on the limited healthcare resources in the area.
        Changes to structure and policy would assist in the future. There
    should be a restructuring of Reserve Component Table of Distribution &
    Allowance assets to match those of PROFIS losses in our MTFs. Modules
    within Combat Support Hospitals (CSHs) and Forward Surgical Teams
    (FSTs) to facilitate the mobilization/movement of mission-specific
    teams should have corresponding backfill modules in the reserves.
    Military authorizations for high OPTEMPO specialties--61J (General
    Surgery), 61M (Orthopedic), 60N (Anesthesia), 66F (Nurse Anesthetists),
    66H8A (Intensive Care Nursing) and 66E (Operating Room Nurse)--should
    be increased for these hard-to-hire specialties. Pay scales need to be
    increased for health care specialties as current scales and funding
    levels for Civil Service and contracts are out-of-sync with the
    civilian market. Increasing military authorizations for primary care
    specialties in order to fill the PROFIS requirements for 62Bs (Field
    Surgeon) would prevent the military from having to use critically short
    subspecialties, such as pediatric cardiologists, to fill these slots.
    Some specialties--60C (Preventive Medicine) and 61N (Flight Surgeons)--
    have had to be structured to the military setting and it is difficult
    to recruit for these same positions through the civilian sector since
    the training, education, and experience levels are so different. This
    lack of military-focused training in these specialties has made it
    impossible to backfill losses in these specialties with the reserves.

              MONITORING THE HEALTH OF GUARD AND RESERVE PERSONNEL

        Question. What improvements have been made to the medical
    information systems to track the health care of reservists? Are they
    electronic, do they differ among services?
        Answer. The Army Medical Department's (AMEDD) Medical Operational
    Data System (MODS) has added modules to address the need of improving
    the health care for both the Guard and Reserve. The Active Duty Medical
    Extension (ADMR) Web Reporting module manages those Guard and Reserve
    soldiers requiring medical treatment that cannot be completed in less
    than 30 days. The Line of Duty (LOD) Automated module automates the
    completion of LOD Investigations and ancillary activities. To assist
    the National Guard (NG) MODS has a NG Physical Web Reporting module
    that allows the NG to obtain the physical information on each soldier
    by state. The Automated Voucher System (AVS) facilitates scheduling
    physical exams, dental exams, and immunizations for Army National Guard
    and Army Reserve personnel. As a closeout to the AVS cycle, AVS
    provides Medical Readiness results to MEDPROS module. MEDPROS provides
    the Army Knowledge On-line (AKO) with a real time update of Active
    Duty, National Guard and Army Reserve Individual Medical Readiness
    elements to over 1.2 million registered AKO users at logon.
        There is no significant difference in the Individual Medical
    readiness tracking between the active or reserve component of the Army.
        Question. During the mobilization for Operation Iraqi Freedom, how
    many reservists could not be deployed for medical reasons?
        Answer. Overall the medically non-deployable rate for reserve
    component (RC) soldiers was 2.2 percent or 3,147 out of 141,365 RC
    soldiers processed for mobilization. 566 of these non-deployable
    soldiers are currently undergoing a medical board. More than 80 percent
    of the non-deployable soldiers had a chronic medical problem. The most
    common medical reasons for non-deployability were orthopedic and mental
    health problems followed by adult onset diabetes. 27 percent of reserve
    component soldiers had orthopedic conditions with the most common
    problem areas being the back (32 percent), knees (24 percent), and
    shoulders (14 percent). 8 percent of the non-deployable RC soldiers had
    mental health problems and 6 percent had diabetes. Orthopedic
    conditions and diabetes are expected to be more common in reserve
    component soldiers given their generally older average age.
        This information will be used to guide policy changes. Health
    Affairs has mandated an Individual Medical Readiness metric that
    requires the armed services to monitor compliance with required
    periodic health assessments and identification and management of those
    soldiers with deployment limiting conditions. Improving and enforcing
    the profile process will enable earlier identification of significant
    medical problems. However, until a digital profile process is in place
    early identification of deployment limiting conditions will remain
    problematic.
        Question. An April 2003 GAO report documents deficiencies by the
    Army in monitoring the health of the early-deploying reservists. Annual
    health screening is required to ensure that reserve personnel are
    medically fit for deployment when called upon. Review found that 49
    percent of early-deploying reservists lacked a current dental exam, and
    68 percent of those over age 40 lacked a current biennial physical
    exam. In addition, monitoring the health of reservists returning from
    deployment will be critical to ensuring the long term health of those
    service members, and assisting in the identification of common
    illnesses, such as those associated with the Gulf War Syndrome.
        How many deployments (soldiers) were delayed due to dental reasons,
    and how many reservists are not in Dental Class 1 or 2?
        Answer. Only 192 soldiers (0.11 percent of 176,846 mobilized) were
    delayed due to dental reasons; 33 were disqualified (0.02 percent).
    However, several factors contributed to this extremely low number.
    First, dental assets at mobilization sites, composed of both active and
    reserve dental assets, worked very assiduously to bring mobilizing
    reservists to deployable standards. Despite poor dental health of many
    reservists, dental facilities worked tirelessly to accommodate their
    acute oral health needs. Second, as funding for dental readiness of the
    reserve components is lacking, Army G-3 provided an additional $23
    million in OMA funds to support medical and dental readiness. As a
    result, many reservists obtained dental examinations and requisite
    dental care prior to mobilization. This care was provided primarily by
    contracts with civilian network providers. Recent figures from
    mobilization sites reflect that only 14 percent of those reporting to
    mobilization sites were dental class 3 (non-deployable), reflecting a
    vast improvement in dental readiness of our reserve forces over
    previous mobilizations.
        Current dental readiness of the reserves, reflected in MEDPROS
    data, reflects that 64.4 percent (223,140) of the Army National Guard
    are dentally non-deployable, and 72.9 percent (241,907) of the U.S.
    Army Reserve (USAR) are dentally non-deployable. For the USAR, a
    significant number of Class 4 soldiers are in the Individual Ready
    Reserve, who are not considered early deployers. With adequate funding,
    these statistics would be greatly improved.
        Question. What is the current enrollment rate in the TRICARE Dental
    Program (TDP) for reservists, and what action has DOD taken to
    encourage reservists to enroll in TDP?
        Answer. Data provided by TRICARE Management Activity (TMA) reflects
    an overall DOD reserve component enrollment rate of 4.9 percent as of
    January 2003. Mobilizations and deployments have decreased enrollment
    temporarily; as a result, latest numbers were not used. Army specific
    numbers are: USAR = 4.3 percent, and ARNG = 3.1 percent.
        The TDP contractor markets the plan to its potential beneficiaries.
    The initial marketing effort by the contractor entailed sending TDP
    information to each reserve and guard unit. Quantities of information
    sent were based on unit end strengths. The Defense Manpower Data Center
    provides the TDP contractor quarterly files listing newly eligible
    sponsors. This file is used for the ongoing marketing efforts under the
    TDP. The contractor has also established a website for TDP. The
    contractor has a staff of Dental Benefits Advisors that travel to
    military installations to include reserve and guard facilities. TMA's
    Communication and Customer Service marketing office has worked with
    Reserve Affairs to develop and post TDP fact sheets on the TMA website
    that are linked to other reserve and guard websites.
        Question. What needs to be done and what will it cost to ensure
    that reservists are medically and dentally fit for duty?
        Answer. Despite numerous initiatives, the active component dental
    assets shoulder the majority of Reserve Component (RC) mobilization
    workload, a requirement for which they are not resourced. Additionally,
    when active component dental assets are shifted to accommodate RC
    mobilization requirements, a concomitant drop in active component
    dental readiness occurs (a 7 percent drop in dental readiness of the
    3rd Infantry Division occurred at Fort Stewart during mobilization of
    the 48th Infantry Brigade [ARNG]). Use of active component dental
    assets will remain a necessity, but ideally only as a back up and not
    the primary means of preparing RC soldiers for deployment.
        Title 10 USC Section 1074a authorizes members of the Selected
    Reserve that are assigned to units scheduled for deployment within 75
    days after mobilization, an annual dental screen and dental care
    required to ensure deployability, at no cost to the soldier. However,
    funding for this requirement is lacking. When OMA funds were recently
    shifted to support this requirement for current operations, dental
    Class 3 (non-deployable) rates dropped to 14 percent for RC soldiers
    reporting to mobilization sites, a vast improvement from earlier
    deployments that documented a range of 20-35 percent dental Class 3
    (depending on mobilization and units involved). If a greater response
    time had been available, even greater improvements in dental readiness
    would have been realized. Adequate funding for this requirement would
    greatly enhance dental readiness of the RC.
        Several avenues are being studied to fulfill the dental
    requirements outlined in Title 10 USC Section 1074a. DOD(HA) has
    chartered an integrated process team to determine the best course of
    action. However, one estimate of Class 3 costs, based on a Tri-Service
    Center for Oral Health Studies Year 2000 Recruit Study of oral health
    needs reported a cost of $334 per trainee. Annual dental examination
    and required radiographs are estimated at $116 per soldier. Another
    estimate using the TRICARE Dental Program to pay the entire premium and
    selected co-pays to eliminate only Class 3 dental conditions resulted
    in a government cost of $124.4 million for premiums and $16.5 million
    for Class 3 dental care.
        Question. Are there any repercussions for commanders who do not
    ensure that their troops are fit for duty?
        Answer. Fitness for duty effects overall readiness of a unit. It is
    the commander's responsibility to ensure that all of his soldiers are
    medically fit. He can do this by ensuring the soldiers have current
    physicals, immunizations, dental exams, and participate in the semi-
    annual Army Physical Fitness Test (APFT) and weigh-in. It is also the
    commander's responsibility to take appropriate action when a soldier
    does not meet the medical fitness standards as prescribed in Army
    Regulation (AR) 40-501, Standards of Medical Fitness. Appropriate
    action would include the medical board process and/or separation of
    soldiers in accordance with (IAW) AR 135-175, Separation of Officers or
    AR 135-178, Enlisted Administrative Separations. Repercussions for
    commanders who do not enforce individual medical readiness standards
    are not punitive in nature, but could include relief of command or less
    than adequate comments on the commander's performance evaluations.

                    COMBAT TREATMENT IN IRAQ AND AFGHANISTAN

        Question. How well have your forward deployed medical support units
    and the small modular units performed in Operation Enduring Freedom and
    Operation Iraqi Freedom?
        Answer. The transformation initiatives have greatly enhanced the
    ability of the medical planners and commanders to place the appropriate
    amount of medical care, up close where the soldiers needs it, yet
    balanced with an economical use of the force. The Forward Surgical
    Teams (FST) were used very effectively first in Afghanistan and then
    they demonstrated dramatic results in Operation Iraqi Freedom (OIF).
    The FST is extremely lightweight, 100 percent mobile and has the speed
    to stay close to the combat element and provide immediate surgical care
    close to the place of injury. In OIF a FST was placed with each Brigade
    Combat Team. In addition each Brigade Combat Team was assigned 3
    Medical Evaluation Helicopters to link the FST with the next element of
    care the Combat Support Hospital (CSH). The CSH has a split base
    operating capability demonstrated in OIF with the 21st CSH and the 86th
    CSH. This flexibility allowed for the unit to more appropriately move
    with the flow of Combat, remain with evacuation distance, yet provide
    the next echelon of medical care in the theater. Three CSHs were
    assigned to the 5th Corp and 3 CSHs were in the theater rear.

                        DEPLOYMENT OF MEDICAL PERSONNEL

        Question. What are some of the lessons learned from our experience
    in Iraq?
        Answer. Operation IRAQI Freedom (OIF) reinforced the timeless
    lessons of military medicine of proximity to the wounded, preventive
    medicine, echeloned care, flexibility, and mobility. What was unique
    about this war was the large dimensions of the battlefield and the
    speed of the operation. The AMEDD has applied many of the lessons
    learned from the first Gulf War and recent operations other than war.
    As a result, our service members reaped the benefits of revised
    doctrine and procedures during OIF. During the first Gulf War, Combat
    Support Hospitals (CHSs) designed for the Cold War were large and
    immobile. Today our CSHs are modularized and able to provide split
    based operations. This war validated the importance of Forward Surgical
    Teams (FST), which are attached to brigade combat teams. These teams
    are light, extremely mobile, and have been trained as a trauma team at
    some of the most advanced trauma centers in the United States. FSTs
    take advantage of the ``Golden Hour'' and quickly provide life-saving
    surgery close to the point of wounding. OIF also validated our 91W
    transformation program. The 91W (Health Care Specialist) program
    increased the training of basic combat medics to the Emergency Medical
    Technician (EMT) level. Furthermore, medical planning officers were
    included at the various operational staff levels in the planning of OIF
    military campaign plan.
        The Army and the Army Medical Department (AMEDD) have a formal
    lessons learned process. As part of the initial OIF planning, The
    Surgeon General directed comprehensive data collection to facilitate
    the lessons learned process. Currently data collection is in process
    and additional lessons learned will result from formal data analysis.
        The preliminary analyses of injuries from this war indicate that
    improved ballistic protection for the head and thorax resulted in a
    reduction of immediately life threatening injuries. Patterns of injury
    were very different in Iraqi vs. U.S. soldiers. Iraqi soldiers
    experienced the whole spectrum of injuries: upper and lower
    extremities, chest, abdomen and back. U.S. soldiers have had
    predominately upper and lower extremity injuries. The use of body armor
    has reduced abdominal, chest and head penetrating injury.
        Excellent pre-deployment screening and preventive medicine kept the
    disease rate extremely low. Increased automation of the AMEDD's major
    systems such as logistics and patient tracking highlighted the need for
    improved access to assured data communications throughout the
    battlefield. The TRANSCOM Regulating and Command and Control Evacuation
    System (TRACES) improved the ability to evacuate casualties. However
    this system is still evolving and with appropriate funding, should have
    the capability to electronically track patients from point of injury to
    final disposition. The lessons learned from this war indicate that the
    AMEDD is on the right track and will keep improving as medical
    transformation continues.

               IMPROVEMENT OF EQUIPMENT FOR COMBAT CASUALTY CARE

        Question. What tools/equipment is still required to improve the
    care provided to combat casualties?
        Answer. In order to expedite treatment, it is critical that
    evacuation assets be available to facilitate the continuity of patient
    care. Current modes for patient evacuation include ground and air
    platforms, which includes the modernization of the UH60 Aero-medical
    fleet. As part of the Aviation Modernization Program, the HH60 Aero-
    medical evacuation helicopter has demonstrated exceptional capability
    in providing enroute care in Afghanistan and during Operation Iraqi
    Freedom. This is a significant improvement in the standard of care
    provided during Operation Desert Storm. Continued fielding throughout
    the entire MEDEVAC fleet is paramount to continued future success.

                T-NEX, THE NEXT GENERATION OF TRICARE CONTRACTS

        Question. The next generation TRICARE contracts will replace the
    seven current managed care support contracts with three contracts. This
    consolidation is intended to improve portability and reduce the
    administrative costs of negotiating change orders and providing
    government oversight across seven contracts.
        The award date for these contacts has slipped from the scheduled
    date in July of 2003.
        Since the timeline for awarding the contracts has slipped, what is
    the expected start date for the delivery of T-Nex?
        Answer. The Army has not been notified of the slippage of award
    date you describe. However, if that were to occur, we anticipate that
    the currently planned start dates for all regions except Region 11 will
    likely remain the same and that the Region 11 start date will be
    adjusted to allow for a full ten month transition period.
        Question. What planning is taking place to help ensure that when
    the contracts are entered into there will be a seamless transition for
    beneficiaries?
        Answer. It is very important that transition to the T-Nex family of
    contracts be seamless to beneficiaries and that continuity of care be
    preserved to the greatest extent possible. Planning for seamlessness
    and continuity started with the development of the T-Nex contract
    request for proposals (RFP). Rules for interfacing of outgoing and
    incoming contractors to ensure smooth hand off of claims, records, and
    the like are designed into each RFP. A communications plan to inform
    beneficiaries and providers about the change has been developed and is
    being executed. Further, our beneficiary counseling and assistance
    coordinators are trained and ready to assist beneficiaries should T-Nex
    issues, questions, or problems arise. For example, the first T-Nex
    contract--TRICARE Mail Order Pharmacy (TMOP)--occurred March 1, 2003.
    Based on a very low number of patient complaints, hand off of patient
    records and prescriptions and delivery of pharmaceuticals according to
    schedule went well from the beneficiary perspective. When problems
    occurred, they were relatively minor and the incoming contractor moved
    quickly to correct them. Our beneficiary counseling and assistance
    coordinators were prepared and ready to assist beneficiaries if
    problems occurred.
        The larger Managed Care Support Services T-Nex contract, due to be
    awarded this summer, is a larger and more complex contract than TMOP,
    but the principles of execution to support seamless transition and
    continuity still apply: intense prior planning and designing in phase
    in/phase out rules to ensure smooth hand offs of records and claims
    information, develop and execute a communication plan to inform
    beneficiaries and all TRICARE providers of the coming contract change,
    and intense preparation of the cadre of beneficiary counselors to
    directly assist with beneficiary problems, issues, and concerns should
    they occur. Other more specific provisions in this contract include
    requiring the incoming contractor to negotiate with all current network
    providers and encourage them to remain in the network, careful planning
    to preserve continuity of care when resource sharing agreements are
    converted to direct contracts or other contracting arrangements within
    the military treatment facilities, preservation of the access standards
    as in the previous contracts, preservation of the primary care manager
    concept, and continuation of major programs--like TRICARE for Life and
    TRICARE Prime Remote--continue unchanged.
        Question. Are beneficiaries experiencing any change in quality of
    care due to DOD's inability to enter into new long-term managed care
    agreements?
        Answer. Due to extensions of all seven current managed care support
    contracts, beneficiaries continue to access quality health care both in
    military treatment facilities and in the civilian networks just as they
    have over the course of the current contracts. Quality of care
    complaints from beneficiaries remain rare and almost always come from
    beneficiaries in remote areas. When quality of care issues are raised
    by beneficiaries, the complaint is immediately validated and is brought
    to the attention of the relevant Lead Agent medical director. The
    medical director presents the case to the responsible managed care
    support contractor for investigation and resolution of the complaint.
        Question. Under T-Nex, what services currently provided by the
    TRICARE contractors will shift to the direct care system and what are
    the costs associated with this shift in services?
        Answer. Services that shift from the current TRICARE contractors to
    the direct care system are military treatment facility appointing/
    referral management, management of all resource sharing agreements,
    internal utilization management services, management of the Health
    Evaluation Assessment Report, management of the health care information
    line, and transcription services. The estimated total cost to implement
    these services by Army facilities is $753.4 million through the last
    contract option, fiscal year 2008.
        The cost for appointing services consists of personnel and
    essential telephone equipment upgrades. To start health care delivery
    in fiscal year 2004 (prorated to account for staggered start ups) $16.7
    million is required with $26.5 million needed for the full fiscal year,
    2005.
        The estimated cost for replacing contractor personnel and equipment
    to perform internal utilization management services for fiscal year
    2004 is $6.5 million and $21.9 million in fiscal year 2005.
        Converting over 1,100 resource sharing providers to direct
    contracts or other arrangements to preserve continuity of care requires
    $15.8 million in fiscal year 2004 and $104.6 million in fiscal year
    2005.
        To manage the health care information line, we estimate $2.3
    million in 2004 and $7.3 million in 2005 is necessary. To assume
    management of the Health Evaluation Assessment Report within our
    facilities, the Army requires $.3 million in 2004 and $1.1 million in
    2005.

                            RECRUITING AND RETENTION

        Question. Personnel shortfalls still exist in a number of critical
    medical specialties throughout the Services. The Navy has reported
    shortfalls in Anesthesiology, General Surgery, Radiology, and
    Pathology, and has stated the civilian-military pay gap is their
    greatest obstacle in filling these high demand specialties. Recruiting
    and retaining dentists appears to be a challenge for all the services.
        To what extent have Critical Skills Retention Bonuses or other
    incentives been successful in helping to retain medical personnel?
        Answer. The table below shows the results of the recent Critical
    Skills Retention Bonus (CSRB).

    ------------------------------------------------------------------------
                  Corps                  Eligible      Takers     Percentage
    ------------------------------------------------------------------------
    Medical Corps....................          753          177           24
    Dental Corps.....................          596          416           70
    Nurse Corps......................          493          329           67
    ------------------------------------------------------------------------

        As can be seen, the program seems more successful within the Dental
    and Nurse community than the physician. What overall effect this will
    have on retention has yet to be determined. We are hopeful that those
    who opted for the CSRB in fiscal year 2003 will remain in the force
    beyond that. The increases in the Fiscal Year 2003 National Defense
    Authorization Act (NDAA) to the special pay ceilings may help us retain
    some assuming that appropriation support for these increases is also
    forthcoming.
        Question. What else needs to be done to maximize retention of
    medical personnel?
        Answer. The retention of our highly trained and skilled health care
    professionals is one of our greatest challenges. A recent study
    submitted to Congress indicated that the pay compatibility gap at seven
    years of service is between 13 and 63 percent, depending on the
    specialty. The Fiscal Year 2003 National Defense Authorization Act
    (NDAA) raised the ceilings on discretionary special pays for our health
    care providers for the first time in ten years. We are now working
    within our system to obtain funding to support increases in our special
    pays against these new ceilings. However, we need to recognize that it
    isn't all about the money. The pay compatibility gap will never be
    completely closed. There are a multitude of other factors that we have
    addressed and keep addressing. Such things as adequate and skilled
    administrative support staff to allow our clinicians to maximize the
    time they spend practicing their craft is vitally important. That,
    coupled with modern facilities and equipment, create an environment of
    practice that is attractive to health care providers, and is often more
    important than pure economics. In many cases the scope of practice of
    our non-physician health care providers is greater than that in the
    civilian community and is extremely satisfying. The ability of our
    personnel to enter academic or research fields, in additional to the
    purely clinical is another important facet that we will continue to
    support. Quality of life is equally important to many of our personnel.
    The benefits of service, such as housing, paid leave, and base
    facilities, are difficult to replicate in the civilian sector. By
    addressing the whole package--money, quality of life and environment of
    practice, we hope to retain dedicated health care professionals that
    will insure the soldier on point will not be alone and will have world
    class health care both at home and while deployed.

                                     ______

                Questions Submitted by Senator Pete V. Domenici

                   JESSE SPIRI MILITARY MEDICAL COVERAGE ACT

        Question. In 2001, a young Marine Corps 2nd LT from New Mexico lost
    his courageous battle with cancer. Jesse Spiri had just graduated from
    Western New Mexico University and was awaiting basic officer training
    when he learned of his illness. However, because his commission had
    triggered his military status to that of ``inactive reservist,'' Jesse
    was not fully covered by TRICARE. As a result, he was left unable to
    afford the kind of special treatment he needed. I believe it is time to
    close this dangerous loophole. That is why I intend to offer a bill
    entitled the ``Jesse Spiri Military Medical Coverage Act.'' This bill
    will ensure that those military officers who have received a commission
    and are awaiting ``active duty'' status will have access to proper
    medical insurance.
        Would you agree that this type of loophole is extremely dangerous
    for those who, like Jesse, suffer with a dreaded disease?
        Answer. Yes, we agree that for someone like Jesse, who has a
    terminal illness, having no health insurance is very dangerous. We
    mourn, as well, for the tragic loss of Jesse Spiri. The death of one's
    child is perhaps the most difficult thing a parent must bear, and my
    heart goes out to his family. The more potent issue for the Military
    Health System is that Jesse suffered from a disease which made him
    unable to perform military duties, and that existed prior to service
    (EPTS). Similarly, any soldier on active duty who had Jesse's condition
    would have been separated from active duty. And for those on active
    duty less than 8 years who suffer from congenital or hereditary
    conditions, they would not receive any disability benefits or coverage
    for health care after they are discharged.
        Question. And do you agree that our military health care system
    should close this loophole, and can do so very cost effectively (given
    the relatively low number of officers it would affect)?
        Answer. We agree that individuals such as Jesse, who are part of
    the 41.2 million uninsured (2001) in our country, face negative health
    and financial consequences from terminal illnesses. We also recognize
    that finding solutions to the problem of health coverage for the
    uninsured is difficult and will require the efforts of both the
    government and private sectors. The mission of the Military Health Care
    System is to meet the challenge of maintaining medical combat readiness
    while providing the best health care for all eligible personnel. These
    include active duty and retired members of the uniformed services,
    their families, and survivors, which today total approximately 8.5
    million. Congress can expand the categories of eligible personnel, but
    there are significant policy and equity issues of expanding eligibility
    only to selected inactive Reserve Component officers. And any expansion
    of TRICARE benefits to any Reserve Component personnel and/or families
    must be accompanied by increases in Defense Health Program budgets. The
    list of hereditary or congenital components (e.g., brain damage from an
    Arteriovenous malformation, certain types of breast cancer, retinitis
    pigmentosa) is continually growing as medical science advances, making
    it impossible to implement fairly a system that mandates denial of
    benefits if a condition is determined to be hereditary or congenital.
    The Army would like to attain congressional approval of an initiative
    that would reduce the 8-year provision to requiring only 18 months of
    continuous active service before pre-existing conditions are covered.

                   MILITARY FAMILY ACCESS TO DENTAL CARE ACT

        Question. I think everyone here is familiar with the adage that we
    recruit the soldier, but we retain the family. That means taking care
    of our military families and giving them a good standard of living. I
    have introduced a bill that would provide a benefit to military
    families seeking dental care, but who must travel great distances to
    receive it. Specifically, my bill, the ``Military Family Access to
    Dental Care Act'' (S. 336) would provide a travel reimbursement to
    military families in need of certain specialized dental care but who
    are required to travel over 100 miles to see a specialist. Often,
    families at rural bases like Cannon Air Force Base in Clovis, NM meet
    with financial hardship if more than one extended trip is required.
    This bill reimburses them for that travel and is a small way of helping
    our military families.
        Given that current law provides a travel reimbursement for military
    families who must travel more than 100 miles for specialty medical
    care, do you believe it is important to incorporate specialty dental
    care within this benefit?
        Answer. I fully concur with the concept of providing a travel
    reimbursement for military families who must travel more than 100 miles
    for specialty dental care. However, most active duty family members
    participate in the TRICARE Dental Program (TDP), the DOD-sponsored
    dental insurance program. If these family members must travel greater
    than 100 miles for specialty dental care at a civilian TDP provider,
    travel reimbursement would ease some of their financial burden.
    Management of this program may prove difficult, however. Unlike the
    TRICARE Health Plan, DOD does not monitor nor control where TDP
    enrollees go for care. Verification of that travel may prove
    problematic, as greater reliance on the contractor (United Concordia)
    for verification would be necessary.
        Question. Do you think this benefit would improve the standard of
    living of our military families.
        Answer. Clearly, this benefit would improve the standard of living
    of our military families.

                                     ______

                Questions Submitted by Senator Richard C. Shelby

                           PATIENT PRIVACY (TRICARE)

        Question. I would like to get your comments about several concerns
    and questions I have related to the December 14, 2002 break-in of the
    offices of TriWest, a TRICARE contractor. I am told that TriWest did
    not notify the Department of Defense of the break-in and theft of
    personnel information of over 500,000 TRICARE beneficiaries, for almost
    a week after the event. Apparently, TriWest didn't even have basic
    security equipment--guards, locks, cameras--and as a result, this
    incident amounts to the biggest identity theft in U.S. history. Is this
    information true?
        Answer. The physical break-in of the locked TriWest Healthcare
    Alliance corporate offices and theft of computer equipment occurred on
    Saturday, December 14, 2002. On Monday, December 16, 2002, the break-in
    and theft was discovered, authorities contacted, and TRICARE Management
    Activity (TMA) operations staff were advised. Back-up tapes were run on
    Tuesday, December 17, 2002, (which took 30 hours), and on Friday,
    December 20, 2002, TMA/HA leadership was notified of the beneficiary
    information theft. TriWest at that time had available from their back-
    up tapes beneficiary information including names, addresses, phone
    numbers, Social Security Numbers, some claims information with relevant
    procedure codes, and personal credit card information on 23
    individuals.
        To date, the Army Medical Department has not received notification
    of a single verified case of identity theft related to TriWest stolen
    computer equipment.
        Question. Has the Department of Defense finished its investigation
    of this case and have sanctions been levied against TriWest or punitive
    actions against TRICARE officials?
        Answer. The criminal investigation is being conducted by the
    Defense Criminal Investigative Service (DCIS) and the Federal Bureau of
    Investigation (FBI), in coordination with other federal and local law
    enforcement agencies.
        To date, no sanctions have been levied upon or punitive actions
    taken against TriWest or TRICARE officials. The investigation is
    ongoing, and its findings are pending.
        Sensitive information pertaining to TRICARE beneficiaries is
    maintained by TRICARE contractors subject to the Privacy Act of 1974,
    as implemented by the DOD Privacy Program (DOD 5400.11-R). The Act
    provides criminal penalties for any contractor or contractor employee
    who willfully discloses such protected information, in any manner, to
    any person or agency not entitled to receive the information. The Act
    also provides for civil penalties against DOD if it is determined that
    the Department (or contractor) intentionally or willfully failed to
    comply with the Privacy Act.
        Question. Would you please share what you can about the lessons
    learned as a result of this incident and the steps the Department and
    the TRICARE organization and its contractors are taking to guarantee
    beneficiary privacy?
        Answer. As a result of close evaluation of our physical and
    information security we found the following:
      --Backup tapes not protected. For example, tapes left on the top of
            servers, or left lying out in the open.
      --A general lack of proper security in areas where servers reside. In
            particular, Defense Blood Standard System and Pharmacy servers
            were not being properly protected.
      --Most sites had excellent password management policies and
            guidelines in place, but they were not being followed.
      --In general, there were proper locks on doors, but in several cases,
            not being properly used. Many doors that should have been
            locked after hours were found open which allowed entry to areas
            where patient information is kept. Most items not secure were
            portable medical devices containing patient medical information
            and medical records.
      --In many cases contingency plans for disaster recovery were lacking
            or out-of-date.
      --Lost hardware not reported through official channels.
      --Hardware being turned in without data being wiped from hard drives.
      --Concerning recent physical security self-assessments, a second look
            found almost 60 percent of local assessments were inaccurate or
            inexact.
      --As a result of the TriWest issues all Army medical activities
            participated in a Health Affairs directed self-assessment of
            local physical security practices. Mitigation plans for all
            deficiencies are due on May 16, 2003.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                          MEDICAL TREATMENT FACILITIES

        Question. Healthcare, pay, and housing are the greatest Quality of
    Life issues for our troops and their families. With the numbers of
    health care staff deployed from your Military Treatment Facilities,
    what strategies did you use to effectively plan and care for
    beneficiaries back home?
        Answer. The most expeditious means to maintain services for our
    beneficiaries was accomplished by looking across our own regional
    medical commands for opportunities to cross-level providers when
    possible. The TRICARE Health Plan was designed with contingency
    operations in mind and the Managed Care Support Contractor's (MCSC)
    network of providers becomes the second echelon for health care
    services if the MTF is unable to provide the care. Before requesting
    any reserve component activation for backfill support, the MEDCOM staff
    coordinated with the TRICARE Lead Agents and the MCSC to evaluate the
    adequacy of the civilian provider network, especially in relation to
    specific clinical specialties and locations that were hard hit. When
    network adequacy was less than adequate, the request for reserve
    component backfill request was prepared to maintain health care
    services. Additionally, the MCSC provided backfill providers and
    support staff through resource sharing agreements. A summary of
    resource sharing backfill by DOD Region and skill type is provided
    below for Army MTFs. The MCSC was successful in providing 88 percent of
    the requested backfill. The majority of those filled by the MCSC were
    in the Registered Nurse and Para-Professional skills. For those
    positions capable of being filled with resource sharing personnel, the
    MCSC's average ``fill time'' was 16 days compared to the industry
    standard of 90 days.

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        DOD TRICARE Region
                   Skill Type                                    Data                    -----------------------------------------------    Grand    Percent
                                                                                             3        5        6        12       7/8        Total    By Type
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Physicians.............................  Subtotal FTEs Requested....................        3        5      0.5     1.66        8.5       18.66       12
                                             Subtotal FTEs Filled.......................        3        5      0.5     1.66        8.5       18.66       14
    PAs/NPs................................  Subtotal FTEs Requested....................        1        1  .......  .......  .........        2           1
                                             Subtotal FTEs Filled.......................        1        1  .......  .......  .........        2           1
    RNs....................................  Subtotal FTEs Requested....................       21        9  .......  .......       39         69          45
                                             Subtotal FTEs Filled.......................       11        9  .......  .......       39         59          43
    Paraprofessionals......................  Subtotal FTEs Requested....................       19        5  .......  .......       30         54          35
                                             Subtotal FTEs Filled.......................       10        5  .......  .......       30         45          33
    Administrative.........................  Subtotal FTEs Requested....................  .......        9  .......  .......        2         11           7
                                             Subtotal FTEs Filled.......................  .......        9  .......  .......        2         11           8
                                            ----------------------------------------------------------------------------------------------------------------
          Total FTEs Requested.............  ...........................................       44       29      0.5     1.66       79.5      154.66  .......
          Total FTEs Filled................  ...........................................       25       29      0.5     1.66       79.5      135.66       88
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. How are you able to address the needs of patients coming
    in from the battlefield and is this affecting the care of beneficiaries
    seeking regular care?
        Answer. Casualties evacuated from Operation IRAQI Freedom (OIF) and
    Operation Enduring Freedom (OEF) were initially sent to either the
    fleet hospital at ROTA Spain or Landstuhl Regional Medical Center
    (LRMC). The staffing of LRMC was increased to manage the flow of
    casualties. This enabled LRMC to execute both its peacetime mission of
    providing health care to beneficiaries stationed in Europe and its
    wartime mission of the primary OCONUS military treatment facility (MTF)
    supporting the Global War on Terrorism. Evacuation from Europe was
    facilitated by the TRANSCOM Regulating and Command and Control
    Evacuation System (TRACES). This system improved the ability to send
    casualties to medical centers best equipped to manage their specific
    medical problem. For example: TRACES expedited the evacuation of burn
    patients to the specialized burn center at Brooke Army Medical Center
    (BAMC).
        Army Medical Centers, such as Walter Reed Army Medical Center and
    Womack Army Medical Center/Fort Bragg, and Army Community Hospitals,
    such as the hospital at Fort Hood, deployed many health care providers
    and paraprofessionals. Reserve component backfill and cross leveling
    within the Army Medical Department maintained the capacity of most MTFs
    in the Army. Localized shortages of certain beneficiary services did
    occur. However, when the network capability was adequate, beneficiaries
    were able to obtain health care on the local economy through TRICARE if
    care within the MTF was not available or if waiting times exceeded
    TRICARE access standards. In some locations, the TRICARE network
    capability and the adequacy of that network, remains problematic. In
    these areas, TRICARE access standards were exceeded. Across the Army
    there has been approximately a 20 percent increase in purchased care.
    This increase combined with the augmented numbers of reserve soldiers
    on active duty, and the need to send health care providers on extended
    temporary duty, will significantly increase the resource requirements
    of the Army Medical Department.
        Question. What authority were you given to backfill your vacancies
    and are the funds sufficient to attain that goal?
        Answer. The Army Medical Department has supported and is supporting
    a number of missions requiring the deployment of medical personnel in
    addition to those deployed in support of Operation Iraqi Freedom (OIF)
    and Operation Noble Eagle. None of our MTFs are overstrength, and the
    impact of these deployments is always felt, but can generally be
    managed for the short duration missions.
        Dr. David Chu, Under Secretary of Defense for Personnel and
    Readiness, authorized a 50 percent backfill by Reserve Component
    personnel of the number of vacancies created by the deployment of
    active duty in PROFIS (professional filler system) positions to OIF
    only. Additionally, limiting the amount of active duty time to 90-day
    rotations for RC physicians, dentists, and Nurse Anesthetists has been
    problematic as there are insufficient reserves to fill multiple
    rotations in some specialties. Attempting to maintain the high quality
    of care and the access to care for our beneficiaries with this
    reduction in personnel has been extremely challenging. Increasing the
    amount of funding for reserve backfill would increase the ability to
    replace losses, especially in areas of inadequate TRICARE networks. To
    accommodate the 90-day rotational policy, a significant increase in the
    number of slots for reserves will be needed.
        Question. What measures were used in determining what the services
    were able to backfill and how did that compare to current requirements?
        Answer. Current staffing before deployment; staff losses, by
    specialty, due to deployment; loss of borrowed military manpower;
    losses due to other taskings; TRICARE network adequacy; non-network
    adequacy; historical ability to hire/contract healthcare workers;
    reserve availability; and the ability of the regions to cross-level
    losses, especially low-density specialties, were all taken into account
    to determine the level and kind of backfill needed. As deployment
    schedules, troop mix and actual units changed for this fluid operation,
    reserve backfill and cross-leveling were and continue to be adjusted.

                           RETENTION AND RECRUITMENT

        Question. With increasing deployments in support of Operation Iraqi
    Freedom and the Global War on Terrorism, can you describe your overall
    recruitment and retention status of the Medical Department in each of
    your services?
        Answer. Our current accession projections for the year (as of May
    7, 2003) are in the table below:

    ----------------------------------------------------------------------------------------------------------------
                                  Corps                                   Mission       Projection      Percentage
    ----------------------------------------------------------------------------------------------------------------
    Army Nurse Corps................................................             373             283           75.87
    Dental Corps....................................................             117             112           95.73
    Medical Corps...................................................             389             389          100.00
    Medical Service Corps...........................................             369             369          100.00
    Medical Specialist Corps........................................              83             106          127.71
    Veterinary Corps................................................              40              43          107.05
                                                                     -----------------------------------------------
          Total.....................................................           1,371           1,302           94.97
    ----------------------------------------------------------------------------------------------------------------

        Our current loss projections seem to be following a historical
    glide path, but this may have been influenced by the various programs
    put in place to stop personnel from exiting the service. Once these
    programs are no longer in place, it is unclear how our force will
    react. If we utilize, for example, the number of people eligible for
    Incentive Special Pay compared to those that elected to execute a
    contract, we see that this fiscal year is significantly below the last
    three years. This may well indicate a problem within the Medical Corps.
    We project meeting our accession program for Medical Corps officers.
    However, chronic shortages in some specialties (such as surgical
    subspecialties) continue to exist in the Medical Corps.
        Question. What specific corps or specialties are of most concern?
        Answer. Currently, the Army Nurse Corps is of the most concern. The
    nation wide shortage, coupled with two years of an inability to achieve
    our accession target, has created a significant shortage of skilled
    nurses. We are hopeful that utilization of the Health Professions Loan
    Repayment Program, changes with United States Army Cadet Command and
    planned increases in the Accession Bonus will enable us to more
    successfully compete within the civilian market place for these skills.
    Within the Medical Corps, our surgical specialties continue to present
    us with the largest challenge. General surgery, orthopedic surgery and
    anesthesiology continue to be specialties with a high Operational
    Tempo. This high Operational Tempo, coupled with a significant pay gap
    when compared to civilian situations, makes the retention of these
    specialties difficult. Our radiology community is also experiencing a
    decline in the inventory. Our past efforts within the Dental Corps are
    now starting to pay dividends. While still short in terms of total
    inventory, past increases in our student program support for this Corps
    has resulted in positive strides toward eliminating our accession
    problems.
        Question. Did the Critical Skills Retention Bonus given for this
    year help these specialties?
        Answer. Within the Nurse Corps, 55 percent of the Nurse
    Anesthetists and 76 percent of the Operating Room Nurses that were
    eligible for the Critical Skills Retention Bonus (CSRB) opted for the
    program. Within the Dental Community, 70 percent of those eligible took
    the program. Medical Corps response was somewhat less than this with
    only 24 percent of the eligible physicians opting for the program.
        Question. In light of shortages and the disparity between military
    and civilian salaries, how have you planned for additional retention
    bonuses in future years?
        Answer. The Fiscal Year 2003 National Defense Authorization Act
    (NDAA) increased the ceilings on our retention and accessions pays. In
    the absence of any appropriation to support these additional
    authorizations, we have attempted to make small modifications within
    existing budgets for fiscal year 2004. However, working with our sister
    services and Health Affairs, we are developing an aggressive plan with
    increases in all specialties for fiscal year 2005 and beyond. The
    actual amount of the increase will be determined based on projected
    inventory. The proposed increases range anywhere from $2,000 to $25,000
    (assuming a four year contract) depending on the specialty. This plan
    is contingent on the availability of funds. Currently funds are not
    programmed within the Defense Health Program or the services military
    personnel accounts for this initiative.
        Question. Are there recruitment and retention issues within certain
    specialties or corps?
        Answer. Currently, the Army Nurse Corps is of significant concern.
    The nation-wide shortage, coupled with two years of an inability to
    achieve our accession target--86 percent (288 of 333 authorizations)
    and 79 percent (291 of 367 authorizations) for fiscal year 2001 and
    fiscal year 2002 respectively--has created a significant shortage of
    skilled nurses. Our predominant nursing shortages are for Operating
    Room Nurses--86 percent (290 of 339 authorizations), Nurse
    Anesthesists--72 percent (200 of 277 authorizations) and OBGYN Nurses--
    73 percent (129 of 177 authorizations). We are hopeful that utilization
    of the Health Professions Loan Repayment Program, changes within United
    States Army Cadet Command and planned increases in the Accession Bonus
    will enable us to more successfully compete within the civilian market
    place for these skills. Within the Medical Corps, our surgical
    specialties continue to present us with the largest challenge. General
    Surgery--50 percent (126 of 251 authorizations), Orthopedic Surgery--54
    percent (116 of 215 authorizations) and Anesthesiology--84 percent (138
    of 164 authorizations) continue to be specialties with a high
    Operational Tempo. This high Operation Tempo, coupled with a
    significant pay gap when compared to civilian situations--36 percent
    for General Surgeons, 48 percent for Orthopedic Surgeons and 42 percent
    for Anesthesiologist (data as of fiscal year 2000 for providers at
    seven years of service as reported in the Health Professions'
    Retention-Accession Incentives Study Report to Congress by the Center
    for Naval Analysis) makes the retention of these specialties difficult.
    Our radiology community--58 percent (119 of 204 authorizations) is also
    experiencing a decline in the inventory. Our past efforts within the
    Dental Corps are now starting to pay dividends. While still short in
    terms of total inventory--87 percent (987 of 1,136 authorizations),
    past increases in our student program support for this Corps has
    resulted in positive strides toward eliminating our accession problems
    (achieved an average of 77 percent of accession requirements over the
    past five years, as opposed to an average of 64 percent success rate
    over the last ten years). We continue to use a variety of bonus
    programs as well as initiatives to improve the quality of medical
    practice to enhance provider satisfaction and improve retention.
        Question. If so, what are your recommendations to address this in
    the future?
        Answer. Fully funded student programs coupled with accession
    incentives comparable with those offered within the civilian market
    place will be critical to maintaining our force structure. Aggressive
    utilization of the Health Professions Loan Repayment Program as a
    retention tool within the Nurse Corps will hopefully change some
    retention behavior. We are also increasing the use Reserve Officer
    Training Corps scholarships, restructuring bonuses and seeking
    increased funding to increase bonus payments. We are also working to
    improve our providers' satisfaction with the quality of their clinical
    practice to improve retention. If this is successful within this Corps,
    we will evaluate its utility within other Corps.
        Question. Have incentive and special pays helped with specific
    corps or specialties?
        Answer. This is a difficult question to quantify. The percentage of
    officers who elected to avail themselves of these special pays can be
    an indication of success. For example, when we offered new retention
    pays to our Optometry and Pharmacy community, 86 percent and 88 percent
    respectively, opted for the pays. There is no way to refute the
    argument that some of these individuals would have been retained
    without these pays, however the bottom line is they work and are a
    valuable aid to retention.
        Question. How does the fiscal year 2004 budget request address your
    recruitment and retention goals?
        Answer. The Army has funded to 100 percent the requested Program
    Objective Memorandum (POM) through fiscal year 2004. Even though the
    fiscal year 2003 NDAA increased the discretionary special pay caps,
    additional dollars were not appropriated. The Army is supportive of
    validated POM requirements submitted for fiscal year 2005-09. We
    anticipate the ability to implement partial changes in fiscal year 2004
    and further aggressively increase special pay rates in fiscal year 2005
    and the out-years.

                            FORCE HEALTH PROTECTION

        Question. As a result of concerns discovered after the Gulf War,
    the Department created a Force Health Protection system designed to
    properly monitor and treat our military personnel.
        What aspects of the Departments' Force Health Protection system
    have been implemented to date?
        Answer. The Persian Gulf War and experience with illnesses among
    Gulf War veterans highlighted some deficiencies in the Army's force
    health protection capabilities. The Army Medical Department (AMEDD) has
    made significant progress in addressing these shortfalls, but more
    needs to be done.
        The U.S. Army Center for Health Promotion and Preventive Medicine
    (USACHPPM) was formed in 1994 to improve integration of AMEDD's force
    health protection efforts for the warfighter. The emerging capabilities
    of USACHPPM allow the AMEDD to anticipate, communicate, and protect
    against health threats to deployed soldiers, including those posed by
    the environmental health threats on the battlefield, through
    Occupational and Environmental Health Surveillance. The USACHPPM, in
    collaboration with the Armed Forces Medical Intelligence Center (AFMIC)
    and other elements of the Defense intelligence community, has
    dramatically improved the intelligence preparation of the battlefield
    so that commanders are informed about potential environmental health
    risks before they occupy a site that could cause their soldiers to
    become ill. This is accomplished in part through a secure website. The
    USACHPPM deploys preventive medicine teams to survey the occupational
    and environmental health (OEH) risks to our forces. As these potential
    OEH risks are identified, control measures are quickly recommended to
    local commanders in the field. In addition, these exposure data are now
    archived and will be included as part of the Defense Occupational and
    Environmental Health Readiness System (DOEHRS) for review in later
    retrospective health studies. Occupational and environmental health
    surveillance policy, doctrine, tactics, techniques and procedures are
    also continually being developed and updated by the AMEDD to further
    promote the safety of our deployed forces.
        The AMEDD tracks soldiers health throughout the career life-cycle
    through the Defense Medical Surveillance System, which includes data on
    pre- and post-deployment health assessments, episodes of health care,
    immunizations, reportable disease conditions for over 7.6 million
    personnel serving on active duty since 1990, and is linked to the DOD
    Serum Repository in Silver Spring, MD, housing over 31 million serum
    specimens collected from active duty service members since the late
    1980's.
        The 520th Theater Army Medical Laboratory, bringing state-of the-
    art medical laboratory science and technical support for the combatant
    commander, was established in 1995 and first deployed to Bosnia in
    early 1996.
        The Medical Protection System (MEDPROS) automates the Army's
    medical readiness system, including tracking immunizations for
    soldiers, beginning with anthrax vaccine in 1998, and continuing with
    smallpox and other militarily important vaccines today.
        The Army is Executive Agent for the DOD Global Emerging Infections
    Surveillance and Response System (GEIS), established in 1996. Since
    2001, GEIS has operated Project ESSENCE to provide early notification
    of outbreaks of infectious diseases in military communities around the
    world, including those that may represent manifestations of use of a
    biological weapon.
        Since 1991, the U.S. Food and Drug Administration has licensed
    vaccines against hepatitis A, Japanese encephalitis, and smallpox, and
    Soman Nerve Agent Pretreatment, Pyridostigmine (SNAPP). These and other
    products of military medical research allow the AMEDD to provide high
    quality disease countermeasures to protect the deployed force.
        As always, the AMEDD attends to the health care needs of soldiers
    while they are deployed. In 2000, the AMEDD began the transformation of
    the combat medic into the 91W (``Whisky''), the medical soldier for the
    objective force.
        The AMEDD provide quality care for soldiers following deployment,
    employing valuable lessons learned from the first Persian Gulf War in
    the Deployment Health Clinical Practice Guideline, and establishment of
    the DOD Deployment Health Clinical Center at Walter Reed Army Medical
    Center, Washington, DC in 1998.
        Question. What are the differences between the system during the
    Gulf War, Operation Iraqi Freedom, and Operation Enduring Freedom and
    Operation Noble Eagle?
        Answer. All accomplishments listed above reflect the growth and
    evolution of the Army's robust deployment surveillance capability since
    1991. Probably the most significant improvements in this capability are
    the Deployment Health Clinical Practice Guideline and the extensive
    longitudinal baseline health database provided by the Defense Medical
    Surveillance System.
        The Deployment Health Clinical Practice guideline is a very useful
    tool for health care providers to assist patients with any health
    problem or concern that the patient judges to be related to a military
    deployment. By addressing deployment-related concerns proactively, we
    anticipate that this guideline will facilitate appropriate, timely, and
    trusted health care for soldiers and their families following
    deployments.
        The Defense Medical Surveillance System permits extensive analysis
    of health issues among deployed personnel from all Services. In the
    wake of the Gulf War, we were unable to answer many basic questions
    about health and disease among military members due to lack of
    appropriate data. With the establishment and growth of the Defense
    Medical Surveillance System, including the DOD Serum Repository, we can
    provide much more timely, accurate, and comprehensive answers to
    questions about the health of the service members, individually and
    collectively, including those deployed on contingency operations.
        For Operation Iraqi Freedom, the deployment health surveillance
    program has been enhanced with the addition of a more extensive post-
    deployment health assessment questionnaire, a requirement for face-to-
    face encounter between a health care provider and each service member
    before demobilization, and the collection of a post-deployment serum
    specimen to be added to the DOD Serum Repository. In this way, we are
    collecting adequate information on the health of redeploying service
    personnel to satisfy our surveillance requirements while assuring that
    each service member receives the appropriate medical attention and care
    he or she deserves before demobilization.
                                  optimization
        Question. Congress initiated optimization funds to provide
    flexibility to the Surgeons General to invest in additional
    capabilities and technologies that would also result in future savings.
    It is my understanding that a portion of these funds are being withheld
    from the Services.
        Can you please tell the Committee how much Optimization funding is
    being withheld from your service, what are the plans for distributing
    the funds, and why funds since fiscal year 2001 are being withheld?
        Answer. The AMEDD validated and approved 23 projects in fiscal year
    2003. At this point, 15 of those projects with a fiscal year 2003 cost
    of $2,143,800 have not been funded by OSD. My staff is reviewing an
    additional 14 Optimization projects targeting fiscal year 2003 funding.
    Once approved, they will be forwarded to OSD for funding. Optimization
    funding is being held by OSD to resource a portion of their fiscal year
    2003 $800 million shortfall. OSD does not plan to distribute funding
    until they resolve the funding shortfall.
        Question. How have you benefited from optimization funds?
        Answer. Army Medical Treatment Facilities have benefited greatly
    from your support to optimize the direct care system. This support
    enables the Army to exploit cost effective opportunities to achieve
    maximum benefit from existing MHS structure. The AMEDD actively manages
    32 Optimization initiatives with an annual investment value of $16
    million and a projected net annual savings at maturity of $5 million.
    Although these projects are in varying stages of maturity the majority
    have achieved self-financing status and are positioned to recoup their
    initial investment. Much of the savings occur in private sector care
    expenditures. Optimization funding is being used not simply to
    recapture workload from the private sector but rather optimize the mix
    of services making the most efficient use of existing MHS
    infrastructure and private sector care capability. The benefits of
    optimization may not always be apparent due in large part to the gap
    between budgeted and actual medical inflation rates and changes to the
    medical benefit. Optimization funding reduces the overall cost to the
    MHS. Those costs would be rising at an increased rate absent your
    support and commitment to the Optimization program.
        Question. What projects are on hold because OSD has not released
    funding?
        Answer. The AMEDD has 15 Optimization projects on hold awaiting OSD
    release of funds. Although time may not permit me to go into great
    detail on each, there are some interesting characteristics of this
    group. A VA/DOD sharing agreement brings MRI capability to the Fort
    Knox community while increasing the VA's capacity to deliver those same
    services in their local market. Optimization projects targeting child
    mental health in the Northwest, active duty inpatient psychiatry in the
    Southwest, and substance abuse in Hawaii are awaiting funding. A number
    of projects such as lithotripsy at Fort Bliss and automated surgical
    clothing swap stations at Fort Campbell can be implemented quickly and
    offer rapid return with a modest investment.
        Question. What are the projected projects using the proposed $90
    million in the fiscal year 2004 budget request?
        Answer. My subordinate commanders continue to develop optimization
    opportunities in anticipation of fiscal year 2004 and beyond funding.
    The AMEDD has institutionalized the optimization process. Early
    successes improved our ability to develop and implement initiatives. I
    anticipate increasing incremental benefit of the Optimization program
    going forward.

                                     ______

                Questions Submitted by Senator Dianne Feinstein

                           PATIENT PRIVACY (TRICARE)

        Question. In December, 2002, one of the Department's managed care
    support contractors for the military's TRICARE program experienced a
    significant theft of military beneficiary personal identification--
    possibly the largest personal identification theft in U.S. history.
    This theft has potentially significant and serious implications for
    those beneficiaries, and the vulnerability of these individuals may
    well extend for years.
        The Department pledged a full investigation of this matter, yet
    little has been heard on the status and outcome of internal and
    external reviews and investigations.
        What is the status and outcome of the Department's Inspector
    General investigation into this theft?
        Answer. As requested by the Assistant Secretary of Defense for
    Health Affairs [ASD(HA)], the DOD Inspector General will complete all
    facility physical security evaluations, by the end of May 2003. Soon
    thereafter, they will brief the ASD(HA) on their preliminary findings.
        Question. Has the Department determined that its policies and
    oversight of its TRICARE managed care support contractors' personal
    information security are adequate given the December incident?
        Answer. We believe that our policies are strong, sound and
    adequate, and this has been verified by a study conducted by the
    Gartner consulting group. Each TRICARE contractor has the primary
    responsibility for implementing sufficient security safeguards to
    prevent unauthorized entry into its data processing facility and
    unauthorized access to TRICARE beneficiary records in contractor
    custody. We have also initiated a review of TRICARE contract language
    to ensure that it incorporates current security policies. In addition,
    we continue with oversight of managed care support contractors through
    DOD's process of ongoing accreditation and certification of contractor
    systems and networks, a process which incorporates into its criteria a
    variety of facility physical security controls.
        Question. Is the Department convinced its policies for the security
    of personal health care information adhere to established industry best
    practices?
        Answer. The results of recent assessments, validations and the
    Gartner study demonstrate that the Department's policies for the
    security of personal health information meet, and in some cases, exceed
    established Federal, DOD, and industry information security standards.
        Question. Does the Department need any new authorities to address
    personal information security and deal appropriately with entities
    failing to adequately safeguard such sensitive information?
        Answer. At this time, DOD does not require any additional
    authorities to address personal information security.
        Question. Is the Department considering implementing a system of
    sanctions or penalties against companies who fail to provide reasonable
    protections for personal information?
        Answer. DOD currently has procedures and mechanisms in place to
    address inappropriate management of personal and medical information.
    Sensitive information pertaining to TRICARE beneficiaries is maintained
    by TRICARE contractors subject to the Privacy Act of 1974, as
    implemented by the DOD Privacy Program (DOD 5400.11-R). The Act
    provides criminal penalties for any contractor or contractor employee
    who willfully discloses such protected information, in any manner, to
    any person or agency not entitled to receive the information. The Act
    also provides for civil penalties against DOD if it is determined that
    the Department (or contractor) intentionally or willfully failed to
    comply with the Privacy Act.

                                     ______

       Questions Submitted to Lieutenant General George Peach Taylor, Jr.
                   Questions Submitted by Senator Ted Stevens

                        DEPLOYMENT OF MEDICAL PERSONNEL

        Question. The staff's discussions with the Surgeons General
    indicate that the Services have backfilled for deployed medical
    personnel at the Medical Treatment Facilities at varying levels.
        Some of the Services are relying more heavily on private sector
    care rather than backfilling for deployed medical personnel.
        To what extent has the recent deployment of military medical
    personnel affected access to care at military treatment facilities?
    What are you doing to ensure adequate access to care during this time?
        Answer. Despite deployments, access to routine health care in the
    Air Force Medical Service (AFMS) has improved seven percent since
    August 2002. Currently, military medical treatment facilities (MTFs)
    are able to provide routine access to health care (within seven days)
    83 percent of the time. MTFs are able to provide access to acute care
    (within 24 hours) 96 percent of the time. MTFs have met peacetime
    standards, but there has been an overall increase in costs,
    particularly to supplemental care, in order to meet the health care
    needs of Guard and Reserve members called to active duty.
        Through the working relationships between our Managed Care Support
    Contractors (MCSCs) and our MTFs, gaps in beneficiary access were
    determined and resolutions sought throughout the activation and
    deployment of service members to contingency locations. A multi-level
    communication plan was developed and disseminated to support our MTF
    effort to educate our beneficiaries of where and how medical services
    could be accessed.
        Question. What percentage of mobilized reservists in medical
    specialties are being used to backfill positions in the United States?
        Answer. No Air Force medical reservists were activated as backfill
    during Operation Iraqi Freedom.
        Question. Are there shortages of personnel in some specialties? If
    so, which specialties are undermanned and by how much?
        Answer. The Air Force Medical Service has personnel shortages in a
    variety of specialty areas. According to the Health Manpower Personnel
    Data System Data from September 30, 2002, some of our more significant
    shortages can be found in:
      --Anesthesiology (63 percent staffed)
      --Aviation/Aerospace Medicine (Residency Trained Only) (81 percent
            staffed)
      --Cardiology/Cardiovascular (64 percent staffed)
      --Emergency Medicare (79 percent staffed)
      --Otorhinolaryngology (ENT) (77 percent staffed)
      --Radiology (65 percent staffed).
        Question. Are there other ways of structuring the staffing of
    military medical units that might help address shortages in a few
    specialties, such as making increased use of civilian contractors or
    DOD civilian personnel in MTFs stateside?
        Answer. The TRICARE Next Generation (T-Nex) of contracts addresses
    this very issue. While the current contracts provide staffing during
    times of war, the new contracts allow for civilian backfill staffing
    through a spectrum of military operations. Specifically, the T-Nex
    Statement of Work states: ``a contingency plan designed to ensure that
    health care services are continuously available to TRICARE eligible
    beneficiaries as the military treatment facilities respond to war,
    operations other than war, deployments, training, contingencies,
    special operations, et cetera.'' Additionally, contingency plans
    require an annual review and require the contractor to implement their
    contingency plan within 48 hours of notification.
        Question. Is DOD considering any changes to the mix of active duty
    and Reserve personnel in medical specialties?
        Answer. The mix of skill sets in the Active and Reserve Components
    is currently being examined in several forums. The Operational
    Availability Study, the OSD AC/RC Mix study, as well as individual
    Service studies are all looking at the right mix of Active and Reserve
    capabilities to ensure that the needs of the National Security Strategy
    are met through the key factors of availability, responsiveness,
    agility, and flexibility. The studies are ongoing, but initial results
    indicate some capabilities need to be addressed. We will be examining
    the possibility of rebalancing capabilities within war plans and
    between the Active and Reserve Components. While recent mobilizations
    have highlighted shortages in certain capabilities that stressed
    Reserve forces, there are multiple solutions to address those issues.
    Application of a variety of actions, including innovative management
    techniques for the Reserves, will maximize the efficiency of our
    existing forces and may therefore require very little change to
    existing force structure.

              MONITORING THE HEALTH OF GUARD AND RESERVE PERSONNEL

        Question. An April 2003 GAO report documents deficiencies by the
    Army in monitoring the health of the early-deploying reservists. Annual
    health screening is required to insure that reserve personnel are
    medically fit for deployment when call upon.
        Review found that 49 percent of early-deploying reservists lacked a
    current dental exam, and 68 percent of those over age 40 lacked a
    current biennial physical exam.
        In addition, monitoring the health of reservist returning from
    deployment will be critical to ensuring the long term health of those
    service members, and assisting in the identification of common
    illnesses, such as those associate with the Gulf War Syndrome.
        What improvements have been made to the medical information systems
    to track the health care of reservists? Are they electronic, do they
    differ among services?
        Answer. Although I am not familiar with the capabilities of the
    other services, both the Air Force Reserve Command, and Air National
    Guard unit programs have developed independent state-of-the art
    computer physical exam management systems that track the health and
    dental status of all assigned personnel, in real time. Data is
    available at each supervisory level so all commanders can know the
    status of their troops.
        The Air National Guard and the Air Reserve Personnel Center
    implemented the Reserve Component Periodic Health Assessment and
    Individual Medical Readiness (PIMR) software this fiscal year to track
    the medical readiness of the Air National Guard. Air Force Reserve
    Command will soon attain this milestone. This software tracks six key
    elements identified by Health Affairs for monitoring individual medical
    readiness.
        Headquarters Air Reserve Personnel Center has developed an access
    database for all the 12,000+ Individual Mobilization Augmentees. It
    provides Direct demographics downloaded from personnel system;
    Tracking/recording of physical exam dates; Tracking/management of
    medical/dental deferment, assignment and deployment restrictions, and
    medical board action; Tracking/management of deployment and post-
    deployment medical information (DD2796). Post-deployment assessment has
    recently been upgraded to include a more robust questionnaire, an
    interview with a provider, and a blood sample for later analysis.
        Question. During the mobilization for Operation Iraqi Freedom, how
    many reservists could not be deployed for medical reasons?
        Answer. The Air Force Reserve Unit program was able to meet 100
    percent of its taskings with 1.5 percent not being able to deploy for
    medical reasons (only 22 out of 1,450 total mobilized).
        Five percent of our Individual Mobilization Augmentees were unable
    to deploy; 40 out of 800 mobilized. Of these 40, four were later
    mobilized by exception to policy (ETP) due to mission requirements. A
    plan of care for these members was identified before mobilization and
    approved by the wing commander.
        The Air National Guard was able to meet 100 percent of its mission
    taskings with 5,500 members deploying, each being medically and
    dentally qualified for deployment. Local units may have substituted
    personnel, but numbers are not available at this time.
        Question. How many deployments were delayed due to dental reasons,
    and how many reservists are not in Dental class 1 or 2?
        Answer. Air Force Reserve Command: Five personnel had deployments
    delayed for dental reasons. Currently 1,470 reservists are dental class
    three and 34,473 are in dental class four (35,943 are not class one or
    two). It is important to note that the majority of class three or four
    reservists are in that category because of administrative and dental
    records issues that can be corrected quickly if notified of deployment.
    At a minimum, 78 percent of all class three and four members are in
    that category because they have yet to insert their most recent
    civilian dental examination paperwork into their Air Force dental
    record. This issue is usually rectified immediately upon notification
    of deployment and has not had negative impact on readiness during
    Operation Iraqi Freedom or previous contingencies.
        Air Reserve Personnel Center had 21 personnel out of 800 (2.6
    percent) with delayed deployments for dental reasons. Currently the
    Immediate Medical Associates (IMA) dental program has 328 personnel in
    class three, and 4,616 (37 percent) who are class four.
        Air National Guard had no deployments delayed due to dental
    reasons. As of April 15, 2003 with 50 percent of the Air National Guard
    units reporting: One percent was Class III (622); five percent was
    Class IV--no exam (2,488). NOTE: When PIMR gets 100 percent populated
    (July 2004) with data, the Air National Guard will be able to see
    percentages on a real time basis.
        Question. What is the current enrollment rate in the TRICARE Dental
    Program for reservists, and what action has DOD taken to encourage
    reservists to enroll in TDP?
        Answer. Air Force Reserve Command (unit and IMA programs): 11
    percent (8,290 Personnel with Dental Contracts of the 73,961 assigned);
    Air National Guard 8 percent (6,158 Personnel with Dental Contracts of
    the 78,663 assigned).
        The Air Force Reserve and Air National Guard have all fully
    advertised the TDP including notices on their web pages, coverage of
    the program at major conferences and direct mailings to all personnel.
        Question. What needs to be done and what will it cost to ensure
    that reservists are medically and dentally fit for duty?
        Answer. Both the Air Force Reserve Command and the Air National
    Guard welcome enactment of legislation authorizing funding for annual
    dental exams.
        The Air Force Reserve favors funding annual dental exams, which
    would cost approximately $3 million to $4 million. It is likely this
    cost will be offset by the number of personnel who see their civilian
    dentists and provide a completed DD Form 2813 (DOD Active Duty/Reserve
    Forces Dental Examination). To ensure that reservists are medically
    ready for duty, full funding of validated dental support Unit Type
    Codes and full time manpower requirements will give medical units the
    requirements necessary to accomplish the exams and assessments.
        The Air National Guard favors providing dental treatment as a
    benefit; pay the member's premium for dental insurance. The projected
    cost to provide such a benefit to 78,663 traditional members at $9.00
    per month is $8.5 million.
        Unlike medical examinations, annual dental examinations are a new
    unfunded requirement. Compliance with this requirement is contingent on
    receipt of funds unlike the medical examination process, which is well
    established and fully supported through POM submissions.
        Both Air Force Reserve Command and Air National Guard continue to
    enhance long established medical examination processes and record
    keeping. This evolving process enjoys a robust partnership with active
    duty support, the guidelines for which are included in the Program
    Objective Memorandum (POM). No additional funding is required.
        Question. Are there any repercussions for commanders who do not
    ensure that their troops are fit for duty?
        Answer. Although there are no commander-specific repercussions
    specified in Air Force Regulations, fitness for duty is part of the
    overall unit readiness equation along with factors such as dental
    fitness and training reports. These factors are reviewed at Wing,
    Numbered Air Force (or State), and Command levels. Disciplinary actions
    for low readiness levels are at commander's discretion at each of these
    levels.

                    COMBAT TREATMENT IN IRAQ AND AFGHANISTAN

        Question. All of the Services have undertaken transformation
    initiatives to improve how medical care is provided to our front line
    troops.
        The initiatives have resulted in more modular, deployable medical
    units which are scalable in size to meet the mission.
        How well have your forward deployed medical support units and the
    small modular units performed in Operation Enduring Freedom and
    Operation Iraqi Freedom?
        Answer. Our transformation to these smaller, highly mobile, units
    has paid huge dividends in Afghanistan and Iraq. Although many
    Expeditionary Medical Support (EMEDS) activities in Operation Enduring
    Freedom (OEF) and Operation Iraqi Freedom (OIF) are still classified, I
    can share with you that we have positioned 24 EMEDS facilities in 12
    countries. Four of these units are currently far forward in Iraq.
        When U.S. forces captured one of the Iraqi air bases, elements of
    the Air Force Medical Service were there with the entering forces.
    Prior to creation of EMEDS units, it would have taken two to three
    weeks before we could have erected an Air Force medical facility to
    care for or troops occupying the base. In this conflict, we had the
    capability to provide care to our troops the same day we took the air
    base. Within just a couple days, we had established, equipped, and
    manned a fully functioning EMEDS unit.
        EMEDS not only ensures we can provide health care far forward, it
    also helps us prevent illnesses and injuries. In OIF we have achieved
    the lowest disease and non-battle injury rate in military history--
    almost 20 percent lower than Operation DESERT SHIELD/STORM.
        I am also quite proud of the Aeromedical Evacuation (AE) piece of
    the EMEDS system. To date they have moved more than 2,000 patients
    (including 640 battle casualties) in OIF without using dedicated AE
    aircraft.
        Aeromedical Evacuation operations in OIF comprise the most
    aggressive evacuation effort since Vietnam, with not a single patient
    death in transit, which makes it the most successful aeromedical
    operation in military history.
        Question. What are some of the lessons learned from our experience
    in Iraq?
        Answer. The Air Force Medical Service is in the initial stage of
    collecting Operation IRAQI FREEDOM lessons learned. Two major issues
    identified at this point are as follows.
        First, concerns with ``In-Transit visibility'' (ITV). ITV of our
    deploying personnel and equipment is a significant problem. Many man-
    hours were spent searching each Aerial Port of Embarkation (APOE)
    pallet yard for medical equipment pallets that did not meet the
    required delivery dates. Additional man-hours were spent tracking down
    individuals who departed their Continental United States (CONUS) duty
    station, but did not make it to the deployed destination by the
    required in-place dates. This severely hampered the ability of
    operational planners and commanders to effectively employ constrained
    resources to meet mission requirements.
        TRANSCOM Regulating and Command & Control system (TRAC\2\ES) was
    designed to provide ITV of patients returning from the theater of
    operations to more definitive care. TRAC\2\ES was never designed to
    provide visibility of patients when they exit the system, nor does it
    provide information to deployed commanders on a return to duty status
    or the patient's medical condition. Therefore, commanders, who have
    overall responsibility for these individuals, in some cases had no
    visibility of their status or medical condition, and no service-wide
    system exists to provide them that critical information.
        Second, validation of our concept of Critical Care in the Air.
    Operation IRAQI FREEDOM demonstrated the value of teaming our Critical
    Care Air Transport (CCAT) teams and our Aeromedical Evacuation (AE)
    system. The CCAT teams are capable of providing critical care in the
    air, a level of medical service that was unavailable to our forces
    until our recent conflicts in Afghanistan and Iraq. Additionally, CCATs
    can accompany their wards on most any cargo aircraft transiting the
    theater through the use of innovative Patient Support Pallets (PSPs).
    These pallets contain the tools and equipment that permit CCAT team
    members to quickly convert cargo aircraft into aeromedical evacuation
    platforms. The synergistic relationship between our AE, PSPs, and the
    CCAT teams who use them, permitted the AE movement of over 2,000
    patients, some critically ill/injured and unstable, in the first 35
    days of Operation IRAQI FREEDOM, including 640 battlefield casualties.
        Question. What tools/equipment is still required to improve the
    care provided to combat casualties?
        Answer. The challenges facing the deployed medical commander drive
    requirements that the traditional conventional wartime scenario never
    anticipated. As conflicts become more diverse and the potential for
    unconventional warfare increases, so does our need for tools and
    equipment that will assist us in preventing, detecting, and operating
    within an unconventional chemical or biological environment.
        Of great importance is the research and development, testing and
    evaluation of initial patient decontamination equipment. These tools
    are being developed now and will greatly aid our medics by allowing
    them to perform their life-saving activities while protecting both
    provider and patient from the contaminated environment.
        Once biological, chemical, or radiological weapons are detected,
    the Air Force medics will need NBC Casualty Treatment Capabilities
    (ventilators, facility and personal protective equipment, etc.). This
    equipment currently exists, but we require more to ensure a full
    spectrum protection of our fielded medics and the patients for whom
    they will provide care.
        Disease surveillance programs are critical to early identification
    of disease trends and appropriate responses. This includes both Weapons
    of Mass Destruction (WMD) detection units and the software programs
    capable of aggregating their data and providing meaningful information
    to commanders and medics about potential epidemics or WMD attacks.
        Another critical component to any casualty treatment plan is
    oxygen, specifically the ability to generate oxygen for treatment in a
    deployed environment. The Air Force Medical Service requires Deployable
    Oxygen Systems (DOS) that can be inserted into its modular treatment
    facilities in austere environments.
        Finally, although TRAC\2\ES performs successfully to provide us
    visibility of our patients as they are transferred in virtually any
    aircraft, that visibility becomes much more difficult once the patient
    enters the receiving medical facility. As of yet, there is no
    TRAC\2\ES-like system that track the patient's discharge or transfer to
    other locations. The entire Department of Defense health care system
    would benefit from a program that would provide overarching patient
    location visibility in both the sky and on the ground.

                  T-NEX--NEXT GENERATION OF TRICARE CONTRACTS

        Question. The next generation TRICARE contracts will replace the
    seven current managed care support contracts with three contracts. This
    consolidation is intended to improve portability and reduce the
    administrative costs of negotiating change orders and providing
    government oversight across seven contracts.
        The award date for these contracts has slipped from the scheduled
    date in July of 2003. Since the timeline for awarding the contracts has
    slipped, what is the expected start date for the delivery of T-Nex?
        Answer. The overall schedule for the suite of T-Nex solicitations
    has not been changed although some award dates may be delayed if
    proposals require more extensive review. The TRICARE Mail Order
    Pharmacy Contract was awarded, and performance began on March 1, 2003.
    The TRICARE Retiree Dental Contract was also awarded and performance on
    this contract began on May 1, 2003. Proposals have been received for
    both the TRICARE Healthcare and Administration Managed Care Support and
    the TRICARE Dual-Eligible Fiscal Intermediary contracts, and the
    evaluation process for both of these is ongoing. Requests for Proposal
    have been issued for the TRICARE Retail Pharmacy and National Quality
    Monitoring contracts, and those proposals are due June 11 and June 3,
    respectively.
        Procurement sensitivity rules prohibit disclosure of any specific
    information or details about the ongoing evaluation of proposals.
    However, I can tell you that the evaluations are ongoing. No decision
    has been made to alter the implementation schedule for any of the
    contracts.
        Question. What planning is taking place to help ensure that when
    the contracts are entered into there will be a seamless transition for
    beneficiaries?
        Answer. No transition of this magnitude is easy. A customer-focused
    perspective in execution is central to making this as seamless as
    possible. We have already transitioned the TRICARE Mail Order Pharmacy
    contract with success. The TRICARE Retiree Dental Plan contract was
    also awarded without protest and now is in its first month of operation
    without issues. With regard to our managed care contracts, going from
    seven contracts to three will simplify administration, but more
    importantly better serve our beneficiaries with incentivized
    performance standards, greater uniformity of service, alleviation of
    portability issues, and simplified business processes.
        I have instituted a solid oversight structure (see attachment), and
    appointed a senior executive to spearhead this transition and supervise
    all aspects of the procurement, including the implementation of the new
    regional governance structure. This operational approach and structure
    requires my direct involvement through the Transition Leadership
    Council made up of the Surgeons General, the Principal Deputy Assistant
    Secretary of Defense for Health Affairs and the Health Affairs Deputy
    Assistant Secretaries of Defense. This body is supported by a TRICARE
    Transition Executive Management Team which is chaired by TMA's Chief
    Operating Officer.
        An area of detailed focus right now is access to care and all
    business processes that will impact access including: networks,
    provider satisfaction, appointing and scheduling, Military Treatment
    Facility (MTF) optimization, and local support for MTF commanders. We
    are optimistic that robust networks can be maintained. On all customer
    service fronts, my staff and other participants are poised to execute a
    smooth transition immediately following contract award. Regular
    meetings are underway to measure our progress and formulate sound
    decisions on any problematic issues. A contract transition orientation
    conference is planned for June 2003 to fully engage government
    participants in all aspects of the transition process.

        Question. Are beneficiaries experiencing any change in quality of
    care due to DOD's inability to enter into new long-term managed care
    agreements?
        Answer. The evaluation of contractor proposals is now underway and
    will culminate in the awarding of three new Health Care and
    Administration regional contracts. A planned 10-month minimum
    transition period will precede start of health care delivery.
    Surveillance for the delivery of services of outgoing contractors
    during the transition period will remain focused to avoid any
    deterioration in customer service standards. Current contracts have
    been extended beyond original termination dates to ensure there is no
    adverse impact on the beneficiary or quality of care.
        Any signs of negative shifts in quality during this transition
    period will be quickly recognized and dealt with on a priority basis.
    Our proactive posture is expected to result in a near-seamless
    transition to next generation contracts.
        Additionally, in T-Nex contracts, industry best business practices
    are fully expected to emerge through the competitive process. Customer
    service protocols will be favorably impacted by outcome-based
    requirements and accompanying performance standards. Additionally, web-
    based service applications will also improve business processes and the
    way customers can access information. This is all very exciting and
    bodes well for our customers in the new contracts.
        Question. Under T-Nex, what services currently provided by the
    TRICARE contractors will shift to the direct care system and what are
    the costs associated with this shift in services?
        Answer. Appointing, Resource Sharing, Health Care Information Line,
    Health Evaluation & Assessment of Risk (HEAR), Utilization Management,
    and Transcription services will transition from the Managed Care
    Support Contracts to Military Treatment Facilities (MTFs) under T-Nex.
        The Services have been tasked to provide requirements in each of
    these areas, cost estimates, and transition timelines. We have worked
    with the Services to develop a joint approach to determine local
    support contract methodology.
        Transition of Local Support Contract services must be completed not
    later than the start of health care under T-Nex in each region.
        Based on known contract and staffing lag times, funding is required
    six months prior to the start of health care delivery to ensure smooth
    and timely stand-up of new services. At this stage, cost estimates are
    varied and of limited value until the requirement is validated and
    fully known. Initial rough estimates are in the hundreds of millions of
    dollars. The funding source for Local Support will come from funds
    committed to the current Military Health System (MHS) Managed Care
    Support contracts. Those funds were programmed based on existing
    purchased care contracts that included these services. Because it is
    understood that these funds may not cover the entire spectrum of Local
    Support contracts, the Medical Services have prioritized these services
    across the MHS into three tiers based on impact and need. Initial costs
    may ultimately include some investment in telephone and appointing
    infrastructure, thus driving a significant increase in front end costs.

                            RECRUITING AND RETENTION

        Question. Personnel shortfalls still exist in a number of critical
    medical specialties throughout the Services. The Navy has reports
    shortfall in Anesthesiology, General Surgery, Radiology, and Pathology,
    and has stated the civilian-military pay gap is their greatest obstacle
    in filling these high demand specialties. Recruiting and retaining
    dentist appears to be a challenge for all the services.
        To what extent have Critical Skills Retention Bonuses or other
    incentives been successful in helping to retain medical personnel?
        Answer. Critical Skills Retention Bonuses (CSRB) helped retain
    several hundred medical specialists, but may have had a greater impact
    if it were to have been executed in its original form, as a two-year
    program. This additional impact may have provided each Service with a
    bridge to the long-term initiative of optimizing Special Pay
    incentives, currently a goal for fiscal year 2005. Just over 850
    physicians, dentists, and nurses in critical specialties accepted the
    CSRB despite its one-year design. The CSRB became more of a good faith
    gesture to show that we are making plans for the future, acknowledging
    to those in the field that special pay increases are necessary if we
    value the professions and the investment that the Air Force has made by
    training highly specialized personnel.
        We have a success story with the incentives that were implemented
    to improve recruitment and retention of Pharmacists. We are interested
    in repeating this success for physicians, dentists, and nurses if we
    are allowed to optimize new special pay authority from the Fiscal Year
    2003 National Defense Authorization Act. The Pharmacy accession bonus
    increase to $30,000 in fiscal year 2002 and especially the Pharmacy
    Officer Special Pay (implemented in fiscal year 2002) has greatly
    improved recruiting and retention of pharmacists to the point that we
    will reach our targeted endstrength in fiscal year 2003. Obtaining
    appropriation for optimizing Special Pays by fiscal year 2005 is a
    priority.
        Lastly, we have seen short-term success in applying the Health
    Professions Loan Repayment Program (HPLRP) and hope to continue using
    it over the next several years. We currently offer HPLRP for both
    recruiting (accession) and retention, and the program has been quite
    successful in buying-down debt in our critically manned specialties
    within Biomedical Sciences Corps, Dental Corps, and Nurses Corps with
    133, 74, and 241 HPLRP contracts signed respectively in fiscal year
    2002. The HPLRP not only improves quality of life for personnel by
    reducing their debt, it benefits the Service by adding a minimum of
    two-year active duty commitment for one-year of loan repayment amount
    of up to $26,000. (Note: The recipient of HPLRP has a two year minimum
    active duty obligation attached to the first year of loan repayment and
    for second, third and fourth year of loan repayment it is a one for one
    active duty obligation payback). The goal is to enable officers to
    remain serving and not be overburdened with financial commitments
    (debt). For all Corps it is seen as a good faith gesture and carries
    active duty obligation payback. For the Medical Corps (MC) and Dental
    Corps (DC) and Certified Registered Nurse Anesthetist (CRNA) program it
    is a bridge to the long-term optimization of the Health Professions
    Scholarship Program (increased quotas for MC, DC and CRNAs. It is also
    a bridge to implementing the discretionary pay increases authorized by
    the Fiscal Year 2003 National Defense Authorization Act (mentioned).
    Funding of HPLRP is necessary beyond fiscal year 2005 to offer the
    accession incentive necessary to recruit the critical Nurse Corps and
    Biomedical Sciences Corps specialties. We are hoping to realize
    additional success especially with the new allowance for Health
    Profession Scholarship Program and Financial Assistance Program
    recipients to apply for HPLRP. MC and DC officers will then have better
    access to the benefits of this program. The Air Force has committed
    funding through fiscal year 2005 at $12 million per year (since fiscal
    year 2002). This commitment is a testament to our belief that HPLRP
    should remain a tool for both recruiting and retention in the future.
        Question. What else needs to be done to maximize retention of
    medical personnel?
        Answer. I perceive a three-fold approach to improving retention of
    medical personnel: (1) Increasing incentives such as special pays,
    bonuses, and loan repayment is a key component. The special pays and
    health professions scholarship programs are two high-impact tools used
    to recruit and retain medical professionals. Our collective effort to
    increase the authorizations for these tools under the National Defense
    Authorization Act 2003 was a true victory, but our commitment will be
    proven when we provide funding to see these programs through execution.
    Only then will our people see the benefits of our efforts. (2) Another
    component linked to improving medical officer retention is continued
    support for optimizing the medical officer promotion policy. The policy
    should be enhanced to ensure our clinical staff members are provided
    equitable opportunity for advancement. (3) Another tool to maximize the
    retention of our medical personnel is improving the clinical practice
    environment. This is accomplished by investing in our medical
    infrastructure--our facilities--and optimizing our support staff. Such
    optimization funding improves workplace support, enhances workflow, and
    contributes to both provider and patient satisfaction.

                                     ______

                Questions Submitted by Senator Pete V. Domenici

                       DOD/VA HEALTHCARE RESOURCE SHARING

        Question. Combining the resources of the Veterans' Administration
    and the Department of Defense to address health care needs of active
    duty personnel and our veterans is a concept that I am proud to say I
    championed a number of years ago. That initial effort combined brought
    together the resources of the VA and AF to provide care for the
    military at Kirtland Air Force Base and the city of Albuquerque's
    sizable veteran population. To date, the results have been very good.
        General Taylor, can you provide an update on the progress of the
    joint venture concept in general, and between DOD and VA at the
    Albuquerque VA hospital specifically?
        Answer. The Air Force Medical Service continues to partner with the
    Department of Veteran's Affairs (VA) in a number of locations. Examples
    include joint ventures at Elmendorf AFB, AK; Nellis AFB, NV; Travis
    AFB, CA; and Kirtland AFB, in Albuquerque, NM.
        The Albuquerque joint venture in particular has demonstrated the
    benefits of joint venture relationships. In fiscal year 2002, the VA
    and Kirtland AFB medical group exchanged $6.5 million in health care
    resources. This facilitated 8,100 outpatient referrals, 3,400 emergency
    department visits, and 14,000 ancillary procedures. If the two partners
    had purchased the services from local providers--as they would have
    before the joint venture--it would have cost an additional $1.32
    million. In fiscal year 2003, the joint venture program will build upon
    its success and expects to execute $6.7 million of sharing.
        Question. What is the status of their agreement to provide
    professional VA psychologist oversight to our Air Force mental health
    services in Albuquerque?
        Answer. The Veteran's Administration and Kirtland Air Force Base
    have been extremely successful in this endeavor. The agreement has been
    in place since 2001 and provides supervision to Air Force psychology
    residency graduates. This supervision is required as 49 of the 50
    states require at least one year of post-doctoral supervision. Without
    this agreement, the Air Force would be forced to hire additional
    psychologists. The agreement with the Veteran's Administration is a
    vital and successful part of the Air Force mental health mission at
    Kirtland.
        Question. Also, has there been progress in reducing the veterans'
    colonoscopy procedures backlog?
        Answer. Over the past year, the Kirtland Air Force Base medical
    facility has provided both operating room space and support personnel
    in assisting the VA in completing colonoscopies on veterans. This is
    another example of the cooperative efforts ongoing between Kirtland and
    the VA, and allowed the Air Force to perform about 40 VA colonoscopies
    a month. However, although I do not know how exactly how many
    procedures are ``backlogged,'' I do know that demand is still outpacing
    supply.
        Recent deployments have required we cease sharing activities for
    colonoscopies. As most of the combat activity appears to be behind us
    now, our facility in Albuquerque will soon be able to turn its
    attention once again toward the joint venture and determine how it can
    best assist the VA with this and other issues.

                   JESSE SPIRI MILITARY MEDICAL COVERAGE ACT

        Question. In 2001, a young Marine Corps 2nd Lieutenant from New
    Mexico lost his courageous battle with cancer. Jesse Spiri had just
    graduated from Western New Mexico University and was awaiting basic
    officer training when he learned of his illness.
        However, because his commission had triggered his military status
    to that of ``inactive reservist,'' Jesse was not fully covered by
    TRICARE. As a result, he was left unable to afford the kind special
    treatment he needed.
        I believe that it is time to close this dangerous loophole. That is
    why I intend to offer a bill entitled the ``Jesse Spiri Military
    Medical Coverage Act.'' This bill will ensure that those military
    officers who have received a commission and are awaiting ``active
    duty'' status will have access to proper medical insurance.
        Would you agree that this type of loophole is extremely dangerous
    for those who, like Jesse, suffer with a dread disease?
        Answer. Lieutenant Spiri's tragedy with cancer is a loss not only
    to his family, but also to our country that he spent years preparing to
    serve. This is indeed a tragic case; however, limiting TRICARE coverage
    legislation to commissioned inactive reservists would establish an
    inequity with over 40,000 annual Air Force delayed enlistees that have
    also pledged themselves to our country. Additionally, all new recruits
    and officers are counseled that they must maintain their private health
    insurance until they enter active duty to ensure there are no gaps in
    medical coverage.
        Question. And do you agree that our military health care system
    should close this loophole, and can do so very cost effectively (given
    the relatively low number of officers it would affect)?
        Answer. To understand the scope of the issue, my staff has done
    some preliminary research on the cost of the change in legislation.
        The studied group includes Reserve Officer Training Corps (ROTC)
    and other commissioning sources where there is a delay from
    commissioning to active duty and our delayed enlistment programs. Air
    Force ROTC commissions approximately 2,500 lieutenants annually, while
    our direct commissioning program for the Judge Advocate Corps,
    Chaplains and Medical professions bring in about 1,500 officers
    annually. The delayed entry program for enlistees ensures our military
    training schools have a steady flow of students and provides new
    recruits with increased choice of available career fields. We estimate
    40,000 enlisted enlistees would be affected.
        Your proposed benefit change will affect each source differently
    due to the commissioning/enlistment dates of the various programs.
    These delays may be a month to multiple years based on approved delays
    (i.e. educational delay). For the purposes of this analysis, we used an
    estimate that the average wait is two months prior to active duty.
        Our 2003 evaluation of military compensation and benefits compared
    to the civilian sector equates our healthcare benefit to a monthly
    value of $279.35 per individual and $758.36 family rate respectively.
    Our estimate of 3,000 inactive reserve officers would potentially cost
    $1.6 million annually, while the delayed enlistment program would
    require an additional $22.3 million bringing the total annual cost for
    just the Air Force to about $24 million.
        The impact of this legislation on our Sister Services must also be
    analyzed in order to truly appreciate the total cost and provide an
    informed recommendation.

                   MILITARY FAMILY ACCESS TO DENTAL CARE ACT

        Question. I think everyone here is familiar with the adage that we
    recruit the soldier, but we retain the family. That means taking care
    of our military families and giving them a good standard of living.
        I have introduced a bill that would provide a benefit to military
    families seeking dental care, but who must travel great distances to
    receive it. Specifically, my bill, the ``Military Family Access to
    Dental Care Act'' (S. 336) would provide a travel reimbursement to
    military families in need of certain specialized dental care but who
    are required to travel over 100 miles to see a specialist.
        Often, families at rural bases like Cannon Air Force Base in
    Clovis, NM meet with financial hardship if more than one extended trip
    is required. This bill reimburses them for that travel and is a small
    way of helping our military families.
        Given that current law provides a travel reimbursement for military
    families who must travel more than 100 miles for specialty medical
    care, do you believe it is important to incorporate specialty dental
    care within this benefit?
        Answer. Yes, although the proposed legislation (S. 336), as
    written, does not enhance the current travel benefit because travel
    reimbursement is already provided when a Primary Care Manager refers a
    TRICARE Prime enrollee for covered dental adjunctive care under 10 USC
    1074i.
        Question. Do you think this benefit would improve the standard of
    living of our military families?
        Answer. Yes, travel reimbursements do enhance beneficiary quality
    of life. Such benefits become especially important to beneficiaries in
    rural or remote areas since their travel costs can be expensive if they
    are referred to multiple treatment appointments for a dental condition.

                                     ______

                Questions Submitted by Senator Richard C. Shelby

                           PATIENT PRIVACY (TRICARE)

        Question. I would like to get your comments about several concerns
    and questions I have related to the December 14, 2002 break-in of the
    offices of TriWest, a TRICARE contractor. I am told that TriWest did
    not notify the Department of Defense of the break-in and theft of
    personnel information of over 500,000 TRICARE beneficiaries, for almost
    a week after the event. Apparently, TriWest didn't even have basic
    security equipment--guards, locks, cameras--and as a result, this
    incident amounts to the biggest identity theft in U.S. history. Is this
    information true?
        Answer. The physical break-in of the locked TriWest Healthcare
    Alliance corporate offices and theft of computer equipment occurred on
    Saturday, December 14, 2002. On Monday, December 16, 2002, the break-in
    and theft was discovered, authorities contacted, and TRICARE Management
    Activity (TMA) operations staff were advised. Back-up tapes were run on
    Tuesday, December 17, 2002, (which took 30 hours), and on Friday,
    December 20, 2002, TMA/HA leadership was notified of the beneficiary
    information theft. TriWest at that time had available from their back-
    up tapes beneficiary information including names, addresses, phone
    numbers, Social Security Numbers, some claims information with relevant
    procedure codes, and personal credit card information on 23
    individuals.
        To date, the Army Medical Department has not received notification
    of a single verified case of identity theft related to TriWest stolen
    computer equipment.
        Question. Has the Department of Defense finished its investigation
    of this case and have sanctions been levied against TriWest or punitive
    actions against TRICARE officials?
        Answer. The criminal investigation is being conducted by the
    Defense Criminal Investigative Service (DCIS) and the Federal Bureau of
    Investigation (FBI), in coordination with other federal and local law
    enforcement agencies.
        To date, no sanctions have been levied upon or punitive actions
    taken against TriWest or TRICARE officials. The investigation is
    ongoing, and its findings are pending.
        Sensitive information pertaining to TRICARE beneficiaries is
    maintained by TRICARE contractors subject to the Privacy Act of 1974,
    as implemented by the DOD Privacy Program (DOD 5400.11-R). The Act
    provides criminal penalties for any contractor or contractor employee
    who willfully discloses such protected information, in any manner, to
    any person or agency not entitled to receive the information. The Act
    also provides for civil penalties against DOD if it is determined that
    the Department (or contractor) intentionally or willfully failed to
    comply with the Privacy Act.
        Question. Would you please share what you can about the lessons
    learned as a result of this incident and the steps the Department and
    the TRICARE organization and its contractors are taking to guarantee
    beneficiary privacy?
        Answer. As a result of close evaluation of our physical and
    information security we found the following:
      --a. Backup tapes not protected. For example, tapes left on the top
            of servers, or left lying out in the open.
      --b. A general lack of proper security in areas where servers reside.
            In particular, Defense Blood Standard System and Pharmacy
            servers were not being properly protected.
      --c. Most sites had excellent password management policies and
            guidelines in place, but they were not being followed.
      --d. In general, there were proper locks on doors, but in several
            cases, not being properly used. Many doors that should have
            been locked after hours were found open which allowed entry to
            areas where patient information is kept. Most items not secure
            were portable medical devices containing patient medical
            information and medical records.
      --e. In many cases contingency plans for disaster recovery were
            lacking or out-of-date.
      --f. Lost hardware not reported through official channels.
      --g. Hardware being turned in without data being wiped from hard
            drives.
      --h. Concerning recent physical security self-assessments, a second
            look found almost 60 percent of local assessments were
            inaccurate or inexact.
      --i. As a result of the TriWest issues all Army medical activities
            participated in a Health Affairs directed self-assessment of
            local physical security practices. Mitigation plans for all
            deficiencies are due on 16 May 2003.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                          MEDICAL TREATMENT FACILITIES

        Question. Healthcare, pay, and housing are the greatest Quality of
    Life issues for our troops and their families. With the numbers of
    health care staff deployed from your Military Treatment Facilities,
    what strategies did you use to effectively plan and care for
    beneficiaries back home?
        Answer. The Air Force Medical Service, our sister Services, TRICARE
    Management Activity, and the Office of the Assistant Secretary of
    Defense for Health Affairs collaborated to develop a Regional
    Contingency Response Plan to be executed by each Lead Agent to ensure
    continued beneficiary care during the current deployments.
        Specifically, each Medical Treatment Facility (MTF) and Managed
    Care Support Contractor (MCSC) were tasked to analyze their capacity
    and that of the local civilian network with attention paid to possible
    mobilized assets deployed over a specific period of time.
        Working together, MCSCs and MTFs identified potential gaps in
    beneficiary access that might be caused by the deployment of service
    members. The MCSCs and MTFs then drafted a comprehensive communication
    plan MTFs could use to educate beneficiaries of where and how medical
    services could be accessed.
        The uncertainty of the duration of the operations precluded a one-
    for-one reserve backfill of forces to our MTFs. Specific guidance and
    requirements to mobilize a Guard or Reserve medical backfill in our
    MTFs was developed to guide MTFs and Air Force Major Commands.
        To ensure continuity of care with our current beneficiaries and the
    addition of activated Guard and Reserve members and their families, a
    coordinated Health Affairs letter was disseminated to the field
    directing our MTFs and Major Commands to prioritize and efficiently use
    available resources of the direct care system and network system as
    available. These resources consist of reallocation of internal staff,
    Major Comman leveling manning assistance, expansion by resource sharing
    and continued partnering with the Veterans Affairs.
        Despite deployments, access to routine health care in the AFMS has
    improved seven percent since August 2002. Currently, MTFs are able to
    provide routine access to health care (within seven days) 83 percent of
    the time. MTF are able to provide access to acute care (within 24
    hours) 96 percent of the time.
        Question. How are you able to address the needs of patients coming
    in from the battlefields and is this affecting the care of
    beneficiaries seeking regular care?
        Answer. The operational success of our young women and men was not
    only in our combat victories, but also in our delivery of care from the
    battlefield through our joint evacuation responsibilities to our
    theater hospitals. We were able to address the needs of patients coming
    from the battlefield; one of the most successful was the use of our
    aeromedical evacuation system. Using non-dedicated available aircraft,
    aeromedical evacuation crews and our TRAC\2\ES regulating system
    provided continuity of care and visibility of our patients from the
    theater to our CONUS receiving facilities.
        United States Joint Forces Command (USJFCOM) revised the Concept of
    Operations for patient distribution for treatment in DOD/TRICARE
    facilities ensuring our casualties were closer to their unit's home
    location and individuals support network. These facilities included the
    direct care MTFs, TRICARE network partners including the VA and finally
    the National Disaster Medical System (NDMS) if needed.
        Fortunately our casualties were limited and our Military Healthcare
    System was able to support both missions of caring for patients
    returning from the Theater of Operations and our regular non-
    contingency beneficiaries without significant impact to access or
    quality of care to either.
        Question. What authority were you given to back-fill your vacancies
    and are the funds sufficient to attain that goal?
        Answer. The Air Force did not require the Air Reserve Component
    (ARC) forces to backfill our medical facilities during Operation Iraqi
    Freedom; however, if we had required backfill to sustain Graduate
    Medical Education or to expand beds to receive war illness or injuries,
    the policy providing for this activity was developed in concert with
    both Assistant Secretary of Defense (Health Affairs) (ASD/HA) and the
    Assistant Secretary of the Air Force Manpower and Reserve Affairs (SAF/
    MR) guidance.
        Funding was readily available for backfills. Funds to support pay,
    allowances, and per diem for mobilized personnel are reimbursable
    funds. Had ARC forces been required, all associated costs would have
    been charged to Emergency Special Program Coded (ESP Coded) fund which
    was reimbursable to the Air Force Major Commands.
        Question. What measurements were used in determining what the
    Services were able to back-fill and how does that compare to current
    requirements?
        Answer. AF/SG backfill policy was developed in concert with both
    ASD/HA and SAF/MR guidance. Backfill requests had to meet the following
    specific criteria listed below. Before using members to backfill:
      --Medical treatment facilities and headquarters certified all non-
            mission essential deployed personnel had been returned to base
            for mission support.
      --Headquarters re-directed their own personnel who were not mission-
            essential or working in their specialty to be moved to the unit
            level to support mission essential requirements.
      --Major Commands had to certify that their support requirement could
            not be met through internal headquarters cross leveling.
      --Efforts to support missions through Major Command-to-Major Command
            headquarters cross leveling/sharing had been exhausted.
      --Volunteers had to have been unsuccessfully sought for the position.
      --The backfill request had to be in direct support of OPERATION NOBLE
            EAGLE or OPERATION IRAQI FREEDOM.
      --Before receiving backfills, the gaining unit had to prove that
            their personnel in the requested specialty were working
            extended duty hours and that their leave/TDYs had been
            restricted.
      --Services that would be provided by the requested specialty had to
            be unavailable in local area TRICARE Support network.
      --Services requested were not currently covered by Resource Sharing
            Contracts and that ARC assistance was required only for minimum
            time until a new contract could be approved and funded.
      --Services provided by the requested backfill had to be unavailable
            through VA partnering.
      --If the member was involuntarily mobilized, his or her mobilization
            must be for the shortest duration possible.
        Comparison to current requirements is extremely difficult to answer
    as all medical facilities have different situations. Some were not
    heavily tasked with contingency responses and have little impact.
    Others were heavily tasked and have significant numbers of mobilized
    ARC dependents authorized care. Additionally these facilities have the
    added weight of post deployment health assessments and follow-up care
    for both returning active duty and ARC personnel.

                           RETENTION AND RECRUITMENT

        Question. With increasing deployments in support of Operation Iraqi
    Freedom and the Global War on Terrorism, can you describe your overall
    recruitment and retention status of the Medical Department in each of
    your services? What specific corps or specialties are of most concern?
        Answer. Recent operations have truly challenged the Services'
    resources, but our people have responded with vigor and determination.
    We have noticed little change in the recruitment of medical
    professionals during recent operations and are on pace to meet or
    exceed last year's recruiting averages. Retention has artificially
    improved due to STOP LOSS policy (effective May 2, 2003 for the Air
    Force) and programs such as Critical Skills Retention Bonus (CSRB).
        The specialties we were forced to STOP LOSS provided a summary of
    our specific concerns (see Table 1). Note that on May 14, 2003, stop
    loss specialties were released due to the winding down of Operation
    Iraqi Freedom.

          TABLE 1.--AIR FORCE SPECIALTIES UNDER STOP LOSS (MAY 2, 2003)
    ------------------------------------------------------------------------
                      Specialty                               AFSC
    ------------------------------------------------------------------------
    Officer Personnel:
        BIOENVIRONMENTAL ENGINEER................  43EX
        PUBLIC HEALTH............................  43HX
        BIOMEDICAL LABORATORY....................  43TX
        EMERGENCY SERVICES PHYSICIAN.............  44EX
        INTERNIST................................  44MX
        ANESTHESIOLOGIST.........................  45AX
        ORTHOPEDIC SURGEON.......................  45BX
        SURGEON..................................  45SX
        AEROSPACE MEDICINE SPECIALIST............  48AX
        GENERAL MEDICAL OFFICER..................  48GX
        RESIDENCY TRAINED FLIGHT SURGEON.........  48RX
        FLIGHT NURSE.............................  46FX
        NURSE ANESTHETIST........................  46MX
        CRITICAL CARE NURSE......................  46NXE
        OPERATING ROOM NURSE.....................  46SX
    Enlisted Personnel:
        MEDICAL MATERIAL.........................  4A1XX
        BIOMEDICAL EQUIPMENT.....................  4A2XX
        BIOENVIRONMENTAL ENGINEERING.............  4B0XX
        PUBLIC HEALTH............................  4E0XX
        CARDIOPULMONARY LABORATORY...............  4H0XX
    ------------------------------------------------------------------------

        Question. Did the Critical Skills Retention Bonus given for this
    year help these specialties? In light of shortages and the disparity
    between military and civilian salaries, how have you planned for
    additional retention bonuses in future years?
        Answer. Critical Skills Retention Bonus (CSRB) helped retain
    several hundred medical specialists, but may have had a greater impact
    if it was executed in its original form, as a two-year program. This
    additional impact may have provided each Service with a bridge to the
    long-term initiative of optimizing Special Pay incentives, currently a
    goal for fiscal year 2005. Just over 850 physicians, dentists, and
    nurses in critical specialties accepted the CSRB despite the one-year
    design. The CSRB became more of a good faith gesture to show that we
    are making plans for the future, acknowledging to those in the field
    that special pay increases are necessary if we value the professions
    and the investment that the Air Force has made by training highly
    specialized personnel.
        We are currently drafting the fiscal year 2004 Special Pay Plan to
    address critically manned specialties with application of minimum
    increases allowed within our current projected allocation.
        Question. Are there recruitment and retention issues within certain
    specialties or corps? If so, what are your recommendations to address
    this in the future?
        Answer. We do have several challenges in maintaining our required
    number of medical personnel to perform our mission optimally. I believe
    in a three-fold approach to improving retention of medical personnel.
    (1) Increasing incentives such as special pays, bonuses, loan repayment
    and health professions scholarship programs. Our collective effort to
    increase the authorities under the National Defense Authorization Act
    2003 was a true victory, but our commitment will be proven as we
    provide funding to see these programs through execution. Only then will
    our people see the benefits of our efforts. (2) Improving the clinical
    practice environment by investing in our medical infrastructure and
    optimizing support staff. (3) A final component linked to improving
    medical officer retention is continued support for optimizing medical
    officer promotion policies to ensure our clinical staffs are provided
    equitable opportunity for advancement.
        Question. Have incentive and special pays helped with specific
    corps or specialties?
        Answer. The final results of our efforts to increase incentive and
    special pays are not yet available, but we have witnessed a noticeable
    impact from increasing our accession and retention bonuses as well as
    offering Health Professions Loan Repayment. In fiscal year 2002, 241
    nurses signed Health Professions Loan Repayment Program contracts and
    extended their individual service commitments by two years. Likewise,
    we have seen positive trends in our Optometry and Pharmacy specialties
    due to increased accession and retention incentives. We have not
    realized as much improvement in our physician and dental communities as
    the military-civilian pay gap is much wider. However, we are highly
    committed to optimizing our health professions officer special pay
    program.
        Special pays are targeted at professional staff (physicians,
    dentists, nurse anesthetists, and several allied health professionals),
    and are designed to improve both recruiting and retention, as well as
    recognize the market value of these highly trained officers. The
    National Defense Authorization Act 2003 provided significant increases
    in the authorities to fund special pays and the three Services are in
    the process of developing their fiscal year 2004 and fiscal year 2005
    special pay plans with ASD/HA. We plan to increase several
    discretionary special pays for the various specialties that are
    difficult to recruit and retain. Coupled with improved opportunity to
    train medical professionals under Health Professions Scholarship
    Program, increasing these pays will help improve the staffing shortages
    we've experienced in recent years. We would appreciate your continued
    support in these efforts.
        Question. How does the fiscal year 2004 budget request address your
    recruitment and retention goals?
        Answer. The fiscal year 2004 budget request includes three items
    that have significant impact on recruiting and retention:
        Special Pays.--The fiscal year 2004 Special Pays Plan will serve as
    a bridge to better optimization of special pays in fiscal year 2005. We
    are currently drafting the fiscal year 2004 Special Pay Plan to
    addresses critically manned specialties with application of minimum
    increases allowed within our current projected allocation.
        Health Professions Loan Repayment Program (HPLRP).--The Air Force
    has committed funding through fiscal year 2005 at $12 million per year
    (since fiscal year 2002). This commitment is a testament to our belief
    that HPLRP should remain a tool for both recruiting and retention in
    the future. HPLRP not only improves quality of life for personnel by
    reducing their debt and making it more affordable to remain in the
    military, but adds a minimum two-year active duty commitment for a one-
    year loan repayment amount of up to $26,000. (Note: The recipient of
    HPLRP has a two-year minimum active duty obligation attached to the
    first year of loan repayment while the second, third and fourth year of
    loan repayment has a one-for-one active duty obligation payback). The
    goal is to enable officers to remain serving and not be overburdened
    with financial commitments (debt).
        Health Professions Scholarship Program/Financial Assistance Program
    (HPSP/FAP).--For fiscal year 2004, Health Professions Scholarship
    Program and Financial Assistance Program will continue to be one of the
    best recruiting tools for physicians and dentists. Even though we would
    like to see an increase in HPSP/FAP allocations in fiscal year 2004,
    this will not be possible because the budget has been locked for that
    fiscal year. With the rising costs of medical and dental schools, we
    will actually have fewer allocations in fiscal year 2003 than we had in
    fiscal year 2002. We hope to increase allocations from 1300 to 2000
    between fiscal year 2006 and fiscal year 2009.

                            FORCE HEALTH PROTECTION

        Question. As a result of concerns discovered after the Gulf War,
    the Department created a Force Health Protection system designed to
    properly monitor and treat our military personnel. What aspects of the
    Departments' Force Health Protection system have been implemented to
    date? What are the differences between the system during the Gulf War,
    Operation Iraqi Freedom, and Operation Enduring Freedom and Operation
    Noble Eagle?
        Answer. The Department places the highest priority on protecting
    the health of military personnel throughout their military careers and
    beyond. Deployments and other military operations often involve unique
    environments that must be addressed by force health protection
    procedures. We use lessons learned from each military operation to
    improve our force health protection program.
        Requirements to assess health before, during and after deployments
    and to assess, monitor and mitigate environmental hazards predate
    OPERATION DESERT STORM. However, the Department has implemented a
    number of significant changes since the Gulf War to further inculcate
    and improve these procedures. In 1997, deployment health surveillance
    policy was released directing pre and post-deployment health
    assessments and the collection of pre-deployment serum samples. If
    concerns or medical problems are identified, a comprehensive evaluation
    by a provider is required. Data from health assessments and serum
    samples are stored in a central DOD repository. Health assessments and
    records of medical evaluations are placed in the member's permanent
    medical record.
        The Chairman of the Joint Chiefs of Staff released an updated
    deployment health surveillance policy in February 2002. The policy
    provides more detailed guidance on required health assessments and
    required prevention countermeasures for deploying personnel. It also
    greatly enhances the requirements for environmental assessments and
    implements operational risk management processes for the theater of
    operations. From the time the Department standardized the requirements
    for pre and post deployment health assessments, the Air Force has
    submitted more that 420,000 pre and post deployment assessments to the
    DOD repository.
        After the Gulf War, the Air Force implemented a deployed electronic
    medical record, called GEMS (Global Expeditionary Medical System), to
    record clinical care provided in theater. The Air Force implemented an
    immunization tracking and management system that allows visibility of
    immunization records and requirements both at home and in theater. The
    Air Force also has had an ongoing quality assurance program to assess
    all Active Duty and Air Reserve Component installations for compliance
    with deployment health surveillance requirements.
        Since the beginning of OPERATIONS ENDURING FREEDOM and NOBLE EAGLE,
    the Department has accelerated efforts to automate the collection of
    deployment heath surveillance information. OSD is developing a theater
    medical record system and is now testing parts of a comprehensive
    theater information management program. Pending implementation of these
    OSD systems, the Air Force has continued to improve GEMS so it now
    captures public health and environmental/occupational surveillance
    information as well as electronically forwards disease and non-battle
    injury data to headquarters. To date, more than 73,000 theater medical
    encounters are stored in GEMS.
        Furthermore, the Department has implemented a policy for checking,
    at every patient visit, whether or not a deployment-related health
    concern exists. The Department implemented a clinical practice
    guideline, developed by Departments of Veterans Affairs and Defense, to
    ensure military members receive orderly, standardized evaluations and
    treatments for deployment-related conditions.
        Despite the myriad improvements implemented since the Gulf War, the
    onset of OPERATION IRAQI FREEDOM illuminated the need for further
    enhancements to the Department's post-deployment health assessment
    requirements. Just released OSD policy enhances post-deployment health
    assessment procedures by requiring that each military member returning
    from deployment have a blood sample sent to the DOD repository and
    receive an assessment by a provider to address potential health
    problems, environmental exposures and mental health issues. The policy
    also requires more detailed quality assurance programs to validate,
    within 30 days, that returning personnel have completed all deployment
    health assessment requirements and that all information is in permanent
    medical records, and to report on compliance.

                                  OPTIMIZATION

        Question. Congress initiated optimization funds to provide
    flexibility to the Surgeons General to invest in additional
    capabilities and technologies that would also result in future savings.
    It is my understanding that a portion of these funds are being withheld
    from the Services. Can you please tell the Committee how much
    Optimization funding is being withheld from your service, what are the
    plans for distributing the funds, and why funds since fiscal year 2001
    are being withheld?
        Answer. No optimization funds are being withheld from the Air Force
    Medical Service. Optimization funds have been released relatively
    quickly upon request.
        Question. How have you benefited from optimization funds? What
    projects are on hold because OSD has not released funding?
        Answer. I view optimization funding as critical to patient care and
    staff retention. Optimization funds have enabled the Air Force Medical
    Service to institute loan repayments for selected health professions,
    with anticipated improvement in recruitment and retention in critical
    medical and dental specialties; Automate several pharmacies, thereby
    improving productivity and recapture of pharmacy workload from the
    private sector; Improve the efficiency of the Heating, Ventilation and
    Air Conditioning system at Nellis AFB; Hire coders at Medical Treatment
    Facilities to improve data for billing, population health and
    accounting; Contract with industry leading business consultants to
    identify best practices and industry benchmarks to improve Air Force
    Medical Service business processes; Upgrade Medical Treatment Facility
    telephony for first time in years for many Medical Treatment
    Facilities; Contract for providers/staff to address mission critical
    shortages in Active Duty staffing; Implement a Specialty Care
    Optimization Pilot resourcing strategy to validate new manpower
    standards, metrics, and training to improve readiness and clinical
    currency and increase recapture from network; Perform advanced testing
    of a Light-weight Epidemiology Detection System; Accelerate deployment
    of Tele-Radiology capabilities at bases without Active Duty radiology
    support; Fast-track deployment of counter-chemical warfare training;
    Accelerate refractive surgery pilot to identify the best technology to
    address flight crew refractive deficiencies; Accelerate implementation
    of Long View resourcing strategy Air Force wide for general surgery,
    orthopedics, ENT, Ophthalmology, and Obstetrics and Gynecology (OB/GYN)
    to improve expeditionary and clinical currency and increase recapture
    from private sector to decrease overall DOD cost of healthcare.
        No optimization projects are on hold because OSD has not released
    funding.
        Question. What are the projected projects using the proposed $90
    million in the fiscal year 2004 budget request?
        Answer. The Air Force Medical Service intends to use its portion of
    fiscal year 2004 optimization dollars for Health Professions Loan
    Repayments ($12 million) and Long View Execution ($18 million). The
    Long View is our strategy for achieving the optimal mix of assigned and
    contracted manpower to Medical Treatment Facilities in such a way as to
    maximize expeditionary medical capability, clinical currency and cost
    effectiveness.

                                     ______

           Questions Submitted to Brigadier General William T. Bester
                   Questions Submitted by Senator Ted Stevens

                           RECRUITMENT AND RETENTION

        Question. Recruitment within the services for all the Nurse Corps
    is better than the civilian market. There have been several tools to
    help with the recruitment effort including the accession bonus of
    $5,000 for Nurses joining the services. The greatest retention tool for
    all services has been the opportunity for advanced out-service
    education for a masters or doctorate degree. Other issues that have
    also positively affected retention are: challenging assignments, more
    leadership responsibility, and greater promotion opportunities. Of the
    many tools for recruiting and retention, which tools have been most
    successful?
        Answer. We believe that it is vital to have a combination of
    recruiting and retention tools in order to maintain a successful
    manning posture. All the tools provided allow us to retain the
    flexibility to address regional differences in the civilian recruiting
    market as well as address the retention needs of our officers currently
    on active duty. It is imperative that we proactively anticipate the
    continued civilian competition and must have the money to increase our
    accession bonuses plus our retention bonuses for our critical
    specialties such as nursing anesthesia. We also anticipate strong
    results for both recruiting and retention once we implement the Health
    Professions Loan Repayment Program. Our current promotion percentages
    are strong in all ranks except for Colonel. We are taking the
    appropriate actions to resolve some of the systemic personnel issues
    that have stalled the promotion to Colonel in the past with the intent
    to enlarge the promotion rate in the future.
        Question. Do you think a Loan Repayment Program would be helpful to
    recruit more nurses?
        Answer. Absolutely. The Health Professions Loan Repayment Program
    is absolutely essential to our efforts to remain competitive with the
    recruitment activities currently in place by our civilian counterparts.
    In fact, we plan to execute the Health Profession Loan Repayment
    Program through fiscal year 2005 with monies we obtained through a
    Defense Health Program (DHP) Venture Capital Initiative. We plan to
    program monies for fiscal year 2006 to sustain this program in the
    future.

                      WAR'S EFFECT ON THE NURSE CORPS PLAN

        Question. The number one retention tool is the opportunity for
    advanced education. The war could negatively affect the number of
    Nurses that will be available to begin out-service education
    opportunities in fiscal year 2004, thereby mitigating the effectiveness
    of this important retention tool. How has the war in Iraq and
    deployments of personnel to the Middle East affected your overall out-
    service education plan for this year and next?
        Answer. We are taking all measures possible to ensure that all Army
    Nurse Corps officers scheduled to attend an out-service education
    program this year and next year are redeployed in the appropriate
    amount of time to begin their education program. At this time, we do
    not anticipate any education losses due to deployment.
        Question. For instance will you have to send fewer nurses to school
    for advanced degrees this year because of the numbers deployed?
        Answer. At this point, we are taking all measures to ensure that
    officers scheduled to attend out-service education in fiscal year 2004
    are redeployed in a timely manner. If redeployment for some or all of
    the officers is delayed for reasons out of our control, it could result
    in a decrease in the number of officers attending out-service education
    and would negatively affect our overall numbers.
        Question. How will the continued deployments affect you staffing
    plans for the Medical Treatment Facilities?
        Answer. To ensure we have had adequate numbers and mix of
    providers, we have taken the following measures to ensure acceptable
    staffing plans. We have initiated regional cross leveling of staff to
    ensure appropriate distribution of staff to provide care and meet
    patient demand and used internal management decisions by commanders
    such as decreasing the number of beds available for care, and in some
    instances, decreasing the number of surgical cases performed. In
    addition, we have combined patient care units, used creative scheduling
    to ensure appropriate staffing coverage, increased the use of contract
    nurses, requested and received reserve backfill up to the 50 percent
    authorized fill rate and invoked the local commander's consideration to
    send patients to the TRICARE network for care as needed. We will
    continue to use all appropriate staffing management tools to ensure
    that we meet the care needs of our beneficiary population.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                            RECRUITING AND RETENTION

        Question. In light of a national nursing shortage, please describe
    the status of your recruitment and retention efforts in the Nurse Corps
    for each of your services?
        Answer. We are approximately 230 Active Duty nurses below our
    budgeted end strength of 3,381. We are proceeding with the following
    initiatives to improve accessions and maintain a steady state retention
    posture. We are developing an implementation plan with the Triservice
    Recruitment and Retention Workgroup to obtain the funding to support an
    incremental increase in the accession bonus starting in fiscal year
    2005. It is imperative that we proactively anticipate the continued
    civilian competition and must have the resources necessary to increase
    our accession bonuses plus our retention bonuses for our critical
    specialties such as nursing anesthesia. Funds for HPLRP are available
    now (fiscal year 2003) until fiscal year 2005 and we plan to POM funds
    beginning in fiscal year 2006. We are also exploring the feasibility of
    reinstituting the Army Nurse Candidate Program as funding permits and
    have expanded the number of slots available for the Army Enlisted
    Commissioning Program from 50 to 85 per year. We will continue to send
    approximately 100 Army Nurse Corps officers to out-service schooling
    each year and will continue to provide specialty care courses in all
    our specialty areas. We will continue to provide a wide variety of
    clinical and work experiences in both the inpatient and ambulatory care
    settings as well as in the field setting, both in the United States and
    overseas. We feel strongly that providing leadership opportunities
    early in the officer's career is crucial in preparing officers for
    positions with greater scope of responsibility. We strongly promote
    collegiality, camaraderie, and teamwork and develop these concepts
    initially in our entry-level officer basic course and reinforce these
    concepts throughout the officer's career. We continue to support career
    progression, educational opportunities, and continuing education for
    all our officers. Finally, we are proud of our excellent promotion
    opportunities as well as the military benefit package that all soldiers
    and their families are entitled.

                          MEDICAL TREATMENT FACILITIES

        Question. With the numbers of nurses and medics/corpsmen deployed
    from your facilities, how have you ensured the delivery of safe patient
    care at the military medical facilities here at home?
        Answer. To ensure we have had adequate numbers and mix of
    providers, we have taken the following measures to ensure acceptable
    staffing plans. We have initiated regional cross leveling of staff to
    ensure appropriate distribution of staff to provide care and meet
    patient demand and used internal management decisions by commanders
    such as decreasing the number of beds available for care, and in some
    instances, decreasing number of surgical cases performed. In addition,
    we have combined patient care units, used creative scheduling to ensure
    appropriate staffing coverage, increased use of contract nurses,
    requested and received reserve backfill up to the 50 percent authorized
    fill rate and invoked the local commander's consideration to send
    patients to the TRICARE network for care as needed. We will continue to
    use all appropriate staffing management tools to ensure that we meet
    the care needs of our beneficiary population.

                          DOCTORATE PROGRAM IN NURSING

        Question. Fiscal year 2003, this Subcommittee appropriated funds to
    create a Nursing PhD program at the Uniformed Services University of
    the Health Sciences. Students will begin in the fall of 2003. How do
    you plan to use this PhD Program to educate your leaders and nurse
    researchers?
        Answer. The Army Nurse Corps has 33 validated Army Nurse Corps
    prepared positions with a current inventory of 26 Active Duty nurses
    holding Doctorate degrees. The Uniformed Services University of the
    Health Sciences (USUHS) PhD program will afford us additional diversity
    for our fully funded doctoral education program. In addition, this
    program will provide the unique focus on content that is out of the
    ordinary from civilian content and specific to the needs of the
    military. This year, we will send two Active Duty Army Nurse Corps
    officers to USUHS and in the future, will attempt to send 3-4 per year.
    We also plan to support attendance by Active Duty personnel on a part-
    time basis. We are exploring the options for attendance by Reserve
    personnel.

                                NURSING RESEARCH

        Question. The Committee appropriated $6,000,000 for the TRISERVICE
    Nursing Research Program and directed the Secretary of Defense to fully
    fund it in the fiscal year 2004 budget request. To my knowledge, there
    are no funds for this program in fiscal year 2004. Why was this not
    funded and what are the potential implications if this is not funded in
    future years?
        Answer. Uniformed Services University of the Health Sciences
    (USUHS) has long been a strong supporter and proponent of nursing
    research and the TriService Nursing Research Program (TSNRP) and any
    decline in this program would have a negative effect on our pursuit of
    nursing research. In addition, TSNRP has historically been physically
    located at USUHS. We have learned that USUHS is exploring the
    development of a center focused on military health and research. If
    this concept is developed and approved, we feel that this may be an
    ideal conduit for research funding in the future. We have made contact
    with USUHS regarding the feasibility of identifying the funding through
    this option and will continue to explore all options regarding the
    feasibility of funding TSNRP via USUHS.

                                     ______

             Questions Submitted to Rear Admiral Nancy J. Lescavage
                   Questions Submitted by Senator Ted Stevens

                           RECRUITMENT AND RETENTION

        Question. Recruitment within the services for all the Nurse Corps
    is better than the civilian market. There have been several tools to
    help with the recruitment effort including the accession bonus of
    $5,000 for Nurses joining the services.
        The greatest retention tool for all services has been the
    opportunity for advanced out-service education for a masters or
    doctorate degree. Other issues that have also positively affected
    retention are: challenging assignments, more leadership responsibility,
    and greater promotion opportunities.
        Of the many tools for recruiting and retention, which tools have
    been most successful?
        Answer. Our recruitment and retention efforts targeting active duty
    Navy Nurses have been successful through a blend of initiatives, such
    as:
      --Diversified accession sources, which also include pipeline
            scholarship programs (Nurse Candidate Program, Naval Reserve
            Officer Training Corps, Medical Enlisted Commissioning Program,
            and Seaman to Admiral Program).
      --Pay incentives (Nurse Accession Bonus, Certified Registered Nurse
            Anesthetist Incentive Special Pay, Board Certification Pay and
            Critical Skills Retention Bonus).
      --Graduate education and training programs focus on Master's
            Programs, Doctoral Degrees, and fellowships. Between 72-80
            officers/year receive full-time scholarships based on
            operational and nursing specialty requirements.
      --Initiatives that enhance personal and professional quality of life,
            mentorship, leadership roles, promotion opportunities,
            operational opportunities, professional collegiality and full
            scope of practice.
        Question. Do you think that a Loan Repayment Program would be
    helpful to recruit more nurses?
        Answer. With the increasing number of competitive loan repayment
    programs for student graduates, a Loan Repayment Program with fiscal
    support will be helpful to recruit more nurses as the national nursing
    shortage worsens, particularly if the program has the flexibility to be
    used to repay either baccalaureate degree loans or master's degree
    loans for critically under manned specialties.

                      WAR'S EFFECT ON THE NURSE CORPS PLAN

        Question. The number one retention tool is the opportunity for
    advanced education. The war could negatively affect the number of
    Nurses that will be available to begin out-service education
    opportunities in fiscal year 2004, thereby mitigating the effectiveness
    of this important retention tool.
        How has the war in Iraq and deployments of personnel to the Middle
    East affected your overall out-service education plan for this year and
    next? For instance will you have to send fewer nurses to school for
    advanced degrees this year because of the numbers deployed?
        Answer. Our Navy Nurses in outservice training have continued with
    their curriculum, unaffected by present deployments. We do not
    anticipate any delays in the release of our nurses from their present
    duty stations to begin their advanced education program this coming
    academic year.
        Question. How will the continued deployments affect your staffing
    plans for the Medical Treatment Facilities?
        Answer. Military and civilian nurses who remained at the homefront
    continue to be the backbone and structure in promoting, protecting and
    restoring the health of all entrusted to our care. In addition, key
    Reserve personnel in designated specialties are utilized at specific
    Military Treatment Facilities (MTFs). Ultimately, all MTFs do
    everything possible to conserve and best utilize the remaining medical
    department personnel through appropriate resource management practices
    and staffing plans (i.e. leave control, overtime compensation,
    streamlined hiring practices). Through an active Patient Safety
    Program, our military, civil service and contract personnel are
    constantly monitoring the delivery of patient care. To insure
    consistent superior quality of services, we utilize evidence-based
    clinical practices with a customized population health approach across
    the entire health care team. To maintain TRICARE access standards,
    patients may be guided to the appropriate level of care through the
    Managed Care Support Contract Network resources, assisting them every
    step of the way. The TRICARE network is designed to support the
    military direct care system in times of sudden and major re-deployment
    of MTF staff.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                            RECRUITING AND RETENTION

        Question. In light of a national nursing shortage, please describe
    the status of your recruitment and retention efforts in the Nurse Corps
    for each of your services?
        Answer. The Navy Nurse Corps continually strives to be recognized
    as an employer of choice. National shortage projections and civilian
    compensation packages are very closely monitored to determine the best
    course to take in the competitive market. Our recruitment and retention
    efforts targeting active duty Navy Nurses have been successful through
    a blend of initiatives such as:
      --Diversified accession sources, which include pipeline scholarship
            programs such as the Nurse Candidate Program, Naval Reserve
            Officer Training Corps (NROTC), Medical Enlisted Commissioning
            Program, and Seaman to Admiral Program.
      --Pay incentives including the Nurse Accession Bonus, Certified
            Registered Nurse Anesthetist (CRNA) Incentive Special Pay,
            Board Certification Pay and the one-time Critical Skills
            Retention Bonus.
      --Graduate education and training programs that focus on Master's
            Programs, Doctoral Degrees, and postgraduate fellowships.
            Between 72-80 officers/year receive full-time scholarships
            based on operational and nursing specialty requirements.
      --Initiatives that enhance personal and professional quality of life
            including mentorship, leadership roles, promotion
            opportunities, operational opportunities, professional
            collegiality and full scope of practice.
        Recruiting incentives for reservists include:
      --The Nurse Accession Bonus ($5,000) for critical wartime
            specialties.
      --Loan repayment and stipend programs for graduate education.
      --Several additional initiatives are under review with the
            Department.

                          MEDICAL TREATMENT FACILITIES

        Question. With the numbers of nurses and medics/corpsmen deployed
    from your facilities, how have you ensured the delivery of safe patient
    care at the military medical facilities here at home?
        Answer. Navy Medicine is committed to high quality, cost-effective
    and easily accessible primary and preventive health care services, such
    as our population health management programs through health promotion,
    disease management and case management. Military and civilian nurses
    who remained at the homefront continue to be the backbone and structure
    in promoting, protecting and restoring the health of all entrusted to
    our care. In addition, key Reserve personnel in designated specialties
    are utilized at specific Military Treatment Facilities (MTFs).
    Ultimately, all MTFs do everything possible to conserve and best
    utilize the remaining medical department personnel through appropriate
    resource management practices (i.e. leave control, overtime
    compensation, streamlined hiring practices). Through an active Patient
    Safety Program, our military, civil service and contract personnel are
    constantly monitoring the delivery of patient care. To insure
    consistent superior quality of services, we utilize evidence-based
    clinical practices with a customized population health approach across
    the entire health care team. To maintain TRICARE access standards,
    patients may be guided to the appropriate level of care through the
    Managed Care Support Contract Network resources, assisting them every
    step of the way. The TRICARE network is designed to support the
    military direct care system in times of sudden and major re-deployment
    of MTF staff.

                          DOCTORATE PROGRAM IN NURSING

        Question. In fiscal year 2003, this Subcommittee appropriated funds
    to create a Nursing PhD program at the Uniformed Services University of
    the Health Sciences. Students will begin in the fall of 2003. How do
    you plan to use this PhD Program to educate your leaders and nurse
    researchers?
        Answer. Navy Nurse Corps participation in civilian PhD programs has
    resulted in a community of nurses with an in-depth knowledge of
    clinical specialty practice, leadership, organizational behavior,
    health policy, education, and/or scientific research. Historically,
    only two or three PhD candidates are trained annually, one of which is
    required to support the Navy Nurse Corps Anesthesia Program. When the
    PhD program is offered at the Uniformed Services University of Health
    Sciences, Navy Nurses will be strongly encouraged to apply. We
    anticipate that one will be selected annually to attend USUHS and
    adjusted accordingly, based on needs. In our vision, nurse researchers
    will take on the most senior executive positions to create health
    policies and delivery systems. Their valued experience will be critical
    to advance and disseminate scientific knowledge, foster nursing
    excellence, and improve clinical outcomes across Navy Medicine and
    Federal agencies. As role models, they will instruct military and
    civilian nurses in the accomplishment and utilization of nursing
    research.

                                NURSING RESEARCH

        Question. The Committee appropriated $6,000,000 for the TRISERVICE
    Nursing Research Program and directed the Secretary of Defense to fully
    fund it in the fiscal year 2004 budget request. To my knowledge, there
    are no funds for this program in fiscal year 2004. Why was this not
    funded and what are the potential implications if this is not funded in
    future years?
        Answer. The TriService Nursing Research Office, through their
    component organization, Uniformed Services University of Health
    Sciences, submitted a request for a fully funded program budget of $30
    million beginning in fiscal year 2004 to fiscal year 2009. Since the
    first budget request submission in 1994, Health Affairs determined that
    the fiscal support requirements of other competing programs superceded
    this request. Health Affairs has not released any fiscal year 2004
    funding, however we continue to work within the system to stress the
    importance of TriService Nursing Research. Through your support of
    TriService Nursing Research Program (TSNRP) funding, Navy Nurses have
    expanded the breadth and depth of our research portfolio, increased
    military nursing research capacity, developed partnerships for
    collaborative research and built an infrastructure to stimulate and
    support military nursing research. TSNRP-funded research has been
    conducted at our three major medical centers, our two Recruit Training
    Centers, several Naval Hospitals, onboard more than six aircraft
    carriers and collaboratively with our uniformed colleagues and more
    than thirteen universities across the country. In addition, our Navy
    nursing research has been published in numerous professional journals.
    Without TSNRP funding, the contractual management of 58 current active
    ongoing research grants will cease. Some open studies may require
    additional dollars, which would no longer be available. Promising new
    evidence-based practice initiatives to current and emergency military
    health care delivery and services will be discontinued. Past and
    current findings to affect change will be not systematically
    disseminated and military nursing science will only be a dream.

                                     ______

            Questions Submitted by Brigadier General Barbara Brannon
                   Questions Submitted by Senator Ted Stevens

                           RECRUITMENT AND RETENTION

       Question. Recruitment within the services for all the Nurse Corps
    is better than the civilian market. There have been several tools to
    help with the recruitment effort including the accession bonus of
    $5,000 for Nurses joining the services.
        The greatest retention tool for all services has been the
    opportunity for advanced out-service education for a masters or
    doctorate degree. Other issues that have also positively affected
    retention are: challenging assignments, more leadership responsibility,
    and greater promotion opportunities.
        Question. Of the many tools for recruiting and retention, which
    tools have been most successful?
        Answer. Although the Air Force has many excellent recruiting tools,
    we cannot yet claim to be better than--or to have reached parity with--
    the recruitment capabilities of our civilian counterparts. However,
    each tool currently at our disposal has proven to be essential building
    a strong Air Force nursing force--a force with the right numbers and
    the right clinical experience and skills.
        We believe the General Accession Bonus and Health Professions Loan
    Repayment Programs are our most successful recruiting tools. The
    civilian market is flooded with incentives to capture the best nurses,
    and our incentive programs offer us the opportunity to compete for this
    scarce pool. As the nursing shortage grows we feel it is imperative
    that our recruiting tools remain competitive, and funding is crucial.
        Health Professions Loan Repayment Program (HPLRP).--Based on the
    success of HPLRP as a retention tool last year, we have been able to
    offer up to $26,000 in exchange for an additional 2-year obligation for
    new accessions. This is the first time we have offered loan repayment
    as a recruiting tool and will monitor its impact. HPLRP appears to be a
    positive incentive for recruitment, a random data pull of 22 new
    accessions showed 100 percent opted for loan repayment.
        General Accession Bonus.--We currently offer a $5,000 bonus for a
    four-year service obligation. We have the authority to offer up to
    $30,000. The Health Affairs/Services Special Pays Working Group is
    currently working the funding to increase this bonus.
        The Critical Skills Retention Bonus was hugely successful and
    boosted retention 82 percent in the limited specialties targeted, the
    Certified Registered Nurse Anesthetist and Perioperative nurses. This
    year, 66 percent of CRNAs and 98 percent of Perioperative nurses
    accepted the bonus for a one-year obligation. Further application and
    funding would positively impact nurse retention.
        The Health Professions Scholarship Program (HPSP) supports nursing,
    physician, biomedical science and dental education. We are aggressively
    seeking an increase in HPSP scholarships for nursing to boost
    recruiting in the Certified Registered Nurse Anesthetist specialty.
        Critical Skills Accession Bonus (CSAB).--We have the authority to
    provide a CSAB to those specialties manned at less than 90 percent. The
    Air Force Nurse Corps has submitted packages through the appropriate
    channels on those specialties to be considered for this bonus.
    Initiative still pending.
        Retention in the Air Force Nurse Corps appears to be healthy
    overall. We have several specialties that are below the 90 percent
    staffing threshold. They are: Certified Registered Nurse Anesthetists
    (CRNAs), Perinatal Nurses, Neonatal Intensive Care Nurses, Women's
    Health Nurse Practitioners, and Emergency Room Nurses.
        One of the most successful retention tools targeting our Certified
    Registered Nurse Anesthetist is our Incentive Special Pay. We have the
    authority to offer up to $50,000 on an annual basis for a one-year
    obligation. Currently we are funded to offer $15,000 for those
    personnel who are unconstrained by school obligations and $6,000 for
    those with school obligation. The Tri-Service Health Professions
    Incentive Pay Group is working to increase the funding by $5,000 in
    fiscal year 2004 and then incrementally by $5,000 until the desired
    retention is met. This program is instrumental in bridging the pay gap
    between civilian and military systems.
        Health Professions Loan Repayment Program was offered to junior
    Nurse Corps officers with outstanding college debt. Results were
    outstanding, for fiscal year 2002, 241 nurses accepted up to $25,000
    for loan repayment in exchange for a 2-year service obligation.
        Question. Do you think that a Loan Repayment Program would be
    helpful to recruit more nurses?
        Answer. This year the Air Force Nurse Corps was able to offer loan
    repayment as an accession tool. This is the first time we have offered
    loan repayment as a recruiting tool and we will closely monitor its
    impact. Preliminary data indicates this will be a tremendous success.
    Technical challenges have limited our ability to fully implement this
    program and we are working hard to overcome the barriers. Loan
    repayment appears to be a powerful recruiting tool and we will engage
    to sustain this tool for the Air Force Nurse Corps.

                      WAR'S EFFECT ON THE NURSE CORPS PLAN

        Question. The number one retention tool is the opportunity for
    advanced education. The war could negatively affect the number of
    Nurses that will be available to begin out-service education
    opportunities in fiscal year 2004, thereby mitigating the effectiveness
    of this important retention tool.
        How has the war in Iraq and deployments of personnel to the Middle
    East affected your overall out-service education plan for this year and
    next? For instance will you have to send fewer nurses to school for
    advanced degrees this year because of the numbers deployed?
        Answer. The Air Force Nurse Corps has made every effort to ensure
    the integrity of our advanced degree program starts. We have worked
    pre, during and post-deployment personnel actions to ensure all
    selected for programs will be able to start as requested. We will not
    change our requirements based on deployments or operations tempo as
    these programs are vital to retention and the enhancement of quality
    patient care. We will validate all future advanced education
    requirements through our usual Air Force processes and will stay the
    course to ensure system integrity.
        Question. How will the continued deployments affect you staffing
    plans for the Medical Treatment Facilities?
        Answer. The Air Force Nurse Corps could and did meet all of our
    deployment requirements. We sparingly applied stop-loss to three of our
    critical Air Force nursing specialties as an insurance policy against
    potential expanded deployments of a prolonged conflict for future
    requirements.
        The Air Force Nurse Corps uses a variety of staffing options to
    avoid patient risk. We can employ reserve units, individual
    mobilization augmentees, manning assistance and contract personnel.
        In addition, our facilities will continue to be staffed based on
    patient nurse staffing ratios advocated by National Specialty
    Organizations. If we cannot meet safe patient care standards we divert
    to civilian facilities, enroll patients to the civilian network or
    extend clinic hours. This was needed on a limited basis at some of our
    Air Force Medical Treatment Facilities.
        The Air Expeditionary Forces (AEF) cycle continues to be crucial to
    maintaining not only deployment unit integrity, but also to planning
    patient care delivery. Most deployments include multiple personnel
    specialties from physicians and nurses to technicians. The advanced
    deployment projections of the AEF allows a facility to plan for manning
    assistance, service closures and/or contracting of personnel to fill
    voids. By this methodology we ensure safe patient care through
    planning.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                            RECRUITING AND RETENTION

        Question. In light of a national nursing shortage, please describe
    the status of your recruitment and retention efforts in the Nurse Corps
    for each of your services?
        Answer. The programs initiated on a national level to address the
    nursing crisis are encouraging. Recruiting nurses will continue to be a
    huge challenge in the coming decade. Fiscal year 2002 was the fourth
    consecutive year the Air Force Nurse Corps failed to meet its
    recruiting goal. We recruited approximately 30 percent less than our
    recruiting goal and shortfall has remained relatively consistent since
    fiscal year 1999. Our fiscal year 2003 recruiting goal is 363 and as of
    March 2003, we had recruited 120 nurses.
        We believe the General Accession Bonus and Health Professions Loan
    Repayment Programs are critical to healthy recruiting. The civilian
    market is flooded with incentives to capture the best nurses and our
    incentive programs offer us the opportunity to be competitive for this
    scarce pool. As the nursing shortage grows we feel it is imperative
    that our recruiting tools remain competitive and funding is crucial.
        Health Professions Loan Repayment Program (HPLRP).--Based on the
    success of HPLRP as a retention tool we have been able to offer up to
    $26,000 in exchange for an additional 2-year obligation for new
    accessions. This is the first time we have offered loan repayment as a
    recruiting tool and will monitor its impact. We received the funding to
    start this program in January 2003 and we are working the loan
    reimbursement constraints. HPLRP appears to be a positive incentive for
    recruitment, a random data pull of 22 new accessions showed 100 percent
    opted for loan repayment. Full accounting will be available once all
    the loan repayments have been made.
        General Accession Bonus.--Currently offering a $5,000 bonus for a
    four-year service obligation. We have the authority to offer up to
    $30,000.
        The Critical Skills Retention Bonus was hugely successful and
    boosted retention 82 percent in the limited specialties targeted, the
    Certified Registered Nurse Anesthetist (CRNA) and Perioperative nurses.
    This year, 66 percent of CRNAs and 98 percent of Perioperative nurses
    accepted the bonus for a one-year obligation. Further application and
    funding would positively impact nurse retention.
        The Health Professions Scholarship Program (HPSP) supports nursing,
    physician, biomedical science and dental education. We are aggressively
    seeking an increase in our HPSP scholarships for nursing to boost
    recruiting in the CRNA specialty. The program covers tuition costs and
    provides a monthly stipend.
        Critical Skills Accession Bonus (CSAB).--We have the authority to
    provide a CSAB to those specialties manned at less than 90 percent.
        Retention in the Air Force Nurse Corps appears to be healthy
    overall. We have several specialties that are below the 90 percent
    staffing threshold. They are: CRNAs, Perinatal Nurses, Neonatal
    Intensive Care Nurses, Women's Health Nurse Practitioners, and
    Emergency Room Nurses.
        One of the most successful retention tools targeting our Certified
    Registered Nurse Anesthetist is our Incentive Special Pay. We have the
    authority to offer up to $50,000 on an annual basis for a one-year
    obligation. Currently we are funded to offer $15,000 for those
    personnel who are unconstrained by school obligations and $6,000 for
    those with school obligation. The Tri-Service Health Professions
    Incentive Pay Group is working to increase the funding by $5,000 in
    fiscal year 2004 and then incrementally by $5,000 until the desired
    retention is met. This program is instrumental in bridging the pay gap
    between civilian and military systems.
        Health Professions Loan Repayment Program was offered to junior
    Nurse Corps officers with outstanding college debt. Results were
    outstanding for fiscal year 2002, 241 nurses accepted up to $25,000 for
    loan repayment in exchange for a 2-year service obligation.

                          MEDICAL TREATMENT FACILITIES

        Question. With the numbers of nurses and medics/corpsmen deployed
    from your facilities, how have you ensured the delivery of safe patient
    care at the military medical facilities here at home?
        Answer. Patient safety remains the central focus of our health care
    delivery. Our staffing models support healthy patient staff ratios
    which will not be breached. The Air Force Nurse Corps endorses and
    supports the standards of practice outlined by nursing specialties or
    organizations. These standards guide nursing practice and provide the
    Chief Nurse Executives at our medical treatment facilities the
    framework for safe care delivery.
        We have many tools available to support safe nursing practice. We
    divert patients to other civilian facilities if patient acuity is
    higher then the nurse staffing can support. The decision for diversion
    is a collaborative decision between all healthcare disciplines. Nursing
    plays a dual role in the diversion option; they are the advocate for
    patients and staff ensuring neither is placed at risk.
        Air Force facilities have embarked on a robust Patient Safety
    Program that prevents patient harm. The focus of this program is
    preventive in nature, putting into place the procedures and processes
    to keep healthcare delivery safe and patients and staff members free
    from harm.
        We have employed the Managed Care Support Contracts and local
    contracts to fill the gap when deployments have taken their toll on
    staffing. Air Force Reserve personnel have also been mobilized to fill
    critical shortfalls.

                          DOCTORATE PROGRAM IN NURSING

        Question. In fiscal year 2003, this Subcommittee appropriated funds
    to create a Nursing PhD program at the Uniformed Services University of
    the Health Sciences. Students will begin in the fall of 2003. How do
    you plan to use this PhD Program to educate your leaders and nurse
    researchers?
        Answer. Each year the Air Force sends nurses back to school for
    doctorate education in Nursing. Currently there are a total of 20 PhDs
    in the Air Force Nurse Corps.
        The Air Force will request two nurse corps doctoral requirements at
    the Integrated Forecast Board in June 2003, which is the process the
    Air Force uses to validate educational requirements. Both of the
    officers will attend the doctoral program at the Uniformed Services
    University of the Health Sciences. This program prepares leaders
    skilled in military-specific health care issues, preparing graduates to
    conduct research and take leadership roles in federal and military
    policy development. This program is integral to provide experts who are
    uniquely qualified in issues specific to the Department of Defense and
    orchestrates research supporting evidenced-based nursing practice that
    positively impacts patient outcomes in peacetime and wartime.

                                NURSING RESEARCH

        Question. The Committee appropriated $6,000,000 for the TRISERVICE
    Nursing Research Program and directed the Secretary of Defense to fully
    fund it in the fiscal year 2004 budget request. To my knowledge, there
    are no funds for this program in fiscal year 2004. Why was this not
    funded and what are the potential implications if this is not funded in
    future years?
        Answer. Uniformed Services University of the Health Sciences
    (USUHS) has long been a strong supporter and proponent of nursing
    research and the TriService Nursing Research Program (TSNRP) and any
    decline in this program would have a negative effect on our pursuit of
    nursing research. In addition, TSNRP has historically been physically
    located at USUHS. We have learned that USUHS is exploring the
    development of a center focused on military health and research. If
    this concept is developed and approved, we feel that this may be an
    ideal conduit for research funding in the future. We have made contact
    with USUHS regarding the feasibility of identifying the funding through
    this option and will continue to explore all options regarding the
    feasibility of funding TSNRP via USUHS.

                              SUBCOMMITTEE RECESS

        Senator Inouye. And I thank all of you for your testimony
    this morning and the subcommittee will reconvene next
    Wednesday, May 7 when we will hear from the chiefs of the
    National Guard and Reserve components. We will stand in recess.
        [Whereupon, at 12:35 p.m., Wednesday, April 30, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    May 7.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                             WEDNESDAY, MAY 7, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:20 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Domenici, Hutchison,
    Burns, Inouye, Leahy, and Dorgan.

                             DEPARTMENT OF DEFENSE

                                 National Guard

    STATEMENTS OF:
            LIEUTENANT GENERAL H. STEVEN BLUM, ARMY NATIONAL GUARD, CHIEF,
                NATIONAL GUARD BUREAU
            LIEUTENANT GENERAL ROGER C. SCHULTZ, DIRECTOR, ARMY NATIONAL
                GUARD
            LIEUTENANT GENERAL DANIEL JAMES III, DIRECTOR, AIR NATIONAL
                GUARD

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. We welcome you, General, all of you who
    are Generals. I'll tell you one of the reasons I'm late, I just
    had a little demonstration session up on the ninth floor with
    the Special Operations and Logistics Center. It is extremely
    interesting. They have brought to show to us here in the Senate
    a whole series of devices that were really created in demand to
    situations that developed in Iraq, and it's just a wonderful,
    wonderful demonstration of the ingenuity of American service
    people.
        They've just adapted to the need and developed even a
    device to go down into a well. They saw the problem and devised
    an answer, and produced a result in 4 hours. Now, they can look
    right down at the bottom of the wells and see if they've hidden
    anything down at the bottom--very interesting. I was on the
    phone telling other Senators to get up there and see it before
    they move it. They're not going to be there very long.
        Senator Dorgan. How long are they going to be there?
        Senator Stevens. 10:30.
        General, we welcome you to our hearing, and I thank you for
    stopping by to visit with us yesterday. We've got two panels
    scheduled today. First, we're going to hear from the National
    Guard leadership followed by the leaders of the four Reserve
    forces. On our first panel, obviously, Lieutenant General
    Steven Blum, the Chief of the National Guard Bureau, Lieutenant
    General Roger Schultz, Director of the Army National Guard, and
    Lieutenant General Daniel James, Director of the Air National
    Guard.
        General Blum, General James, we welcome you to your first
    hearing before this subcommittee and look forward to working
    with you throughout your assignments, and General Schultz, it's
    nice to have you back with us today.
        Let me yield to my friend from Hawaii, our co-chairman, and
    see if he has any comments to make.
        Senator Inouye. Mr. Chairman, I thank you very much. First
    I want to commend you on that show on the ninth floor. It's
    something that all of us should see, and I wish to join you in
    welcoming all of the Generals this morning, General Schultz,
    General Blum, and General James.
        May I request that my full statement be made part of the
    record? Unfortunately, at quarter to 11:00, Mr. Chairman, I
    will have to leave. I have to get to our favorite place, Walter
    Reed, for a function.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Mr. Chairman, I want to join you in welcoming our witnesses
    today, General Blum, General Schultz, and General James of the
    National Guard who will be followed by General Helmly, Admiral
    Totushek, General McCarthy, and General Sherrad of the
    Reserves.
        Since September 11th, our Guard and Reserve personnel have
    been called up at unprecedented rates. They have performed
    their service in almost every aspect of homeland security and
    the global war on terrorism. Once again, they have reinforced
    their integral role in our military.
        As a result of the increased activations and deployments,
    many concerns have arisen on the strain placed on our Guard and
    Reserve and their families. One must not forget that our Guard
    and Reserve not only leave their families in most cases but
    must take leave from their jobs as well. This can cause undo
    strain on both employers and family finances. Our Guard and
    Reserve also cover a wide professional spectrum outside the
    military, including first responders, medical specialists, and
    engineers. These professions, and many others, are crucial for
    both civilian and military and their activations create an
    additional burden on our states and localities. We hope to
    address some of those issues during today's hearing.
        We will also want to focus on the Administration's fiscal
    year 2004 Budget proposal that merges the Military Personnel
    Accounts of Active, Guard, and Reserve. As you can imagine,
    this proposal is being met with some resistance on Capitol Hill
    and I assume among yourselves as well. As I understand it, this
    is the first of many account mergers that are headed our way in
    future budget requests and we would like to begin the
    discussion today.
        This committee also continues to be concerned over the
    longstanding issues of procuring weapons and equipment for our
    Guard and Reserve.
        Mr. Chairman, I thank you for holding this hearing and look
    forward to hearing the testimony of our witnesses.

        Senator Stevens. I will be pleased to yield to you,
    Senator. Does any other Senator have an opening statement?
        Senator Cochran. Mr. Chairman, I would just like to welcome
    our witnesses with you and Senator Inouye and commend them for
    the leadership they have given in this time of real test for
    the men and women who serve in the National Guard. It's been
    very impressive. They've been involved in every respect of the
    national defense, from combat to rear guard operations, and
    they've achieved conspicuous success, and we appreciate very
    much your leadership.
        Senator Stevens. Senator, do you have any opening
    statement?
        Senator Dorgan. Mr. Chairman, just to echo your thanks to
    the Guard and Reserve. In North Dakota, over a third of the
    members of our Guard and Reserve have been deployed, and I want
    to ask some questions about that, but I'm enormously proud of
    our citizens soldiers and what they have done for this country,
    and thank you for appearing today.
        Senator Stevens. Senator Domenici. Happy birthday, Senator
    Domenici.
        Senator Domenici. Well, thank you so much.
        Senator Stevens. Senator Burns, do you have any comments to
    make?
        Senator Burns. I have a statement, Mr. Chairman. Thank you
    for this hearing, and I'll submit it and look forward to
    hearing from the witnesses.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Thank you, Mr. Chairman. I would like to thank all of you
    for being here today to discuss the status of your respective
    National Guard and Reserve Components. I know you are all--as
    so many are--incredibly busy, considering the current situation
    around the world.
        The men and women of the Guard and Reserve have seen an
    increased operations tempo over the past few years and have
    been pitching in, working with the Active Component on a more
    regular basis. This increased optempo does not, however, come
    with out costs. Short lead times for call-ups, coupled with
    uncertain or lengthy periods of service can make life very
    difficult. Employers and communities and families have been
    incredibly understanding and supportive of these men and women
    in our volunteer service. However, one can only be supportive
    and understanding for so long. The difference between military
    and civilian pay can cause undue stress on families. The loss
    of one or two employees is a big deal to a small business. In
    Montana, specifically, where business is small business, some
    business owners, despite how supportive they have been, have
    been pushed to the line and are having a real difficult time
    making ends meet. I know you are all aware of this and are
    working towards solutions.
        Our Guardsmen and Reservists have performed nobly in the
    latest missions with which they have been tasked--the Global
    War on Terrorism and Operation Iraqi Freedom. Both the Guard
    and Reserve are extremely skilled, capable forces, responding
    to various missions across this nation and across the world.
    They continue to play very important, but somewhat diverse
    roles in the protecting our homeland and warfighting operations
    overseas. This further lends credence to the flexibility,
    adaptability and rapid reaction of this force.
        Ensuring that our Guard and Reserve Components have the
    proper training, equipment and facilities necessary to carry
    out their duties is essential. I pledge to do what I can to
    make sure that our Guardsmen and Reservists have the support
    they need to get the job done.
        Again, I thank all of you for being here today. I look
    forward to hearing the testimony today and listening to the
    discussion that takes place this morning.
        Thank you.

        Senator Stevens. Senator Domenici.
        Senator Domenici. I have no statement, but I do want to
    take this occasion to join with all of you in thanking the
    National Guard and the Reserve for their great service, and
    particularly those from New Mexico. New Mexico is having a
    very, very large contingency at every level. They've done a
    marvelous job, and we thank you for the leadership you provide
    for them. Thank you.
        Senator Stevens. It's a pleasure to serve in this committee
    with such a young man, Senator.
        Senator Domenici. That's correct. Am I the youngest,
    looking around? Oh, no, you must be slightly--no. No.
        Senator Stevens. General, I remarked to General Blum
    yesterday that we've just witnessed the real absolute success
    in Senator Stennis' policy with regard, which really ultimately
    led to the total force concept, but when he initiated a concept
    of trying to get the Guard and Reserve really into active duty
    formations and have their training with the active duty
    formations in Europe. I think he started something that we will
    live with for the rest of our military service people. The
    concept of total integration, as Senator Burns has said, has
    just absolutely been demonstrated in Iraq, so we welcome you,
    and we welcome your statement.
        We will put all of your statements in the record in full,
    and make such statements as you wish. General Blum.
        General Blum. Mr. Chairman, members of the committee, good
    morning. Thank you for allowing us this opportunity to address
    you this morning on what we consider to be a national treasure,
    the National Guard of the United States, and you're all very
    correct, each and every one of the States that you represent
    and every State in our Union and our four territories has
    soldiers right now in 84 countries around the world prosecuting
    the global war on terrorism and defending our homeland
    simultaneously, and we have not dropped a single mission in
    order to do that, and we still have a fairly robust capability
    available to the Governors to respond for State emergencies, as
    you have seen happening, unfortunately in the last few days.
        On a personal note, I'd like to thank each and every one of
    you for your solid strong support of my nomination. I intend to
    lead the National Guard Bureau in a manner that will fully
    justify your confidence in that nomination and the confidence
    that you have placed in me. I think the National Guard has
    assembled a superb leadership team, with Lieutenant General
    Roger Schultz and Lieutenant General Danny James who will ably
    assist me. With their vast experience and wide and varying
    backgrounds I think we have put together a leadership team that
    will deliver to this Nation the kind of defense and security
    that they have come to expect from our Army and Air National
    Guard.
        We will also fulfill our obligation as a channel of
    communications between the Secretaries and the Services in the
    several States of the United States, the Governors and their
    Adjutants General.
        We will be one National Guard Bureau. We will be unified in
    our effort. We will be agents of change. We're very proud of
    our past, but we're more interested in our future, and we need
    to make sure that the National Guard of the United States is
    ready to provide the kind of security to our Nation and its
    citizens for future generations that past generations and the
    present generation has come to accept as a standard of
    excellence, so toward that end we will have the following
    priorities.
        First and foremost, it has always been and is today and
    will always be our number one priority to defend the homeland
    of the United States of America. It is our oldest mission, but
    with today's realities and new emerging threats it takes on
    even a more significant meaning than it did only 2 years ago.
    We will at the same time support the global war on terrorism,
    which we view as an extension of homeland defense.
        We see it as an away game on defending our homeland. We
    will take the fight to the enemy anywhere in the world, and we
    would hope that we could keep that off of the homeland of the
    United States of America, and in order to do these things,
    we're going to have to change and transform the National Guard
    Bureau, the headquarters of the National Guard in the various
    several States, and some of the units and functions and
    organizations will need some rebalancing and revisiting so that
    we are not curators of the historical reenactment group but
    prepared for current threats and future threats that may face
    our Nation.

                               PREPARED STATEMENT

        Both General Schultz and General James will now offer some
    brief comments, after which we would welcome your questions,
    but I want to take this last opportunity now to thank you once
    again for the magnificent opportunity to appear before this
    committee.
        Thank you.
        [The statement follows:]

        Joint Prepared Statement of Lieutenant General H. Steven Blum,
      Lieutenant General Roger C. Schultz, and Lieutenant General Daniel
                                   James III

        Mr. Chairman and distinguished members of the Committee, thank you
    for the opportunity to come before you today to discuss your National
    Guard. Your continued support and trust have been instrumental in
    making the National Guard what it is today--a highly capable force,
    responsive to a myriad of homeland security missions as well as
    warfighting operations overseas.
        Since the first muster of three militia regiments in Salem,
    Massachusetts, December 13th, 1636, the National Guard has protected
    America at home and abroad. Nearly every generation in American history
    can attest to the significant contribution citizen-soldiers and airmen
    have made in defense of our freedoms and way of life. Long before
    September 11th, 2001, the National Guard, both at home and abroad, had
    served this nation at unparalleled levels. In the recent past, the
    National Guard contributed substantial forces, equipment and personnel
    to critical stabilization forces in Bosnia and Kosovo; peacekeeping
    forces in the Sinai; no-fly zone enforcement in Southwest Asia; State-
    to-State partnerships; domestic emergencies; humanitarian operations;
    and numerous contingency operations across the world.
        The National Guard's number 1 priority is the security and defense
    of our homeland. For the past 366 years, the National Guard has been
    actively engaged in this endeavor, which has solidified our roots. We
    lead Department of Defense efforts in providing force protection,
    critical infrastructure protection, border security, missile defense,
    intelligence, Weapons of Mass Destruction civil support, communications
    support, as well as medical, and air sovereignty capabilities to
    homeland security. The National Guard is present for duty--bringing
    great skills, talent and capabilities to bear in an increasingly
    dangerous world. Our presence in more than 2,700 communities throughout
    the United States and its territories serves to connect the American
    people to their fighting forces.
        As the Department of Defense works to define its role in providing
    homeland security, the National Guard will play a key role because of
    our inherent and unique capability to cultivate better federal/state
    relationships. In nearly every conceivable scenario, local National
    Guard units--under the control of State Governors and Adjutants
    General--will be the first military responders on the scene. The
    statutory role of the National Guard Bureau is to be the channel of
    communication between the Army and the Air Force and the National Guard
    of the several states. Recently, we have coordinated with the Combatant
    Commander of U.S. Northern Command to perform that same role between
    NORTHCOM and the states. As part of this arrangement, the National
    Guard Bureau provides situational awareness on state-commanded National
    Guard operations to General Eberhart to augment his ability to
    effectively plan for and manage his command's diverse missions. Having
    previously served as Chief of Staff to NORTHCOM and NORAD, I witnessed
    the need for and value of this relationship.
        The National Guard's second priority is to support the Global War
    on Terrrorism here and abroad. On September 11th, 2001, while already
    heavily engaged in other mission areas, numerous National Guard troops
    responded to our local, state and national needs. Citizen soldiers and
    airmen dropped everything and ran to the defense of our nation and
    communities--many were on the scene literally within minutes. Since
    then, over 131,000 others have been mobilized to support the front
    lines of the Global War on Terrorism at home and abroad. This is in
    addition to the nearly 35,000 Active Guard Reserve members whose
    already-heavy workload grew significantly as well. Today's National
    Guard deploys citizen-soldiers and airmen worldwide to dangerous and
    complex places in 84 countries to include Afghanistan and Iraq to
    conduct combat operations in the Global War on Terrorism.
        Wherever this anti-terrorist warfight goes--the National Guard will
    go with it--alongside our joint partners in the Active and other
    Reserve Components. The National Guard has the will and the fighting
    spirit, however we need sustaining resources for both our people and
    equipment. This includes simplified and standardized benefits for all
    National Guard and reserve members, regardless of the status in which
    they serve their country.
        Over the last 18 months, American leaders have come to appreciate
    fully the adaptability and ability to react quickly provided by the
    National Guard's three different duty statuses--State Active Duty as
    the state militia; the federal-funded and state-executed operations
    under Title 32 as the National Guard of the several states; and the
    federal role as the National Guard of the United States in Title 10
    status. This flexibility should be protected and well-resourced at all
    times. In addition, many discovered that while Partial Mobilization
    authority is critical at times of great need, the use of volunteerism
    in combination with the necessary Partial Mobilization authority gives
    National Guard commanders the proper tools and flexibility to ensure
    sustained and ready forces over the longer term.
        Still, many of the issues that surfaced following mobilization of
    National Guard personnel for Operations Noble Eagle and Enduring
    Freedom revolved around the disparity of benefits associated with
    different service statuses. Those mobilized under USC Title 10 could
    claim protection under the Soldiers and Sailors Civil Relief Act, while
    those serving under USC Title 32 could not.
        Many factors influence the abilities of our forces to meet today's
    increasing demands. Certainly, the level of full-time manning available
    to the Army National Guard has been a readiness factor for years. Now
    more than ever, the Air National Guard depends on its full-time force
    as well to sustain growing air sovereignty alert, force protection, and
    command and control requirements. Full-time management has always been
    a critical factor in how we deal with logistics, administration and
    training, and their impact on readiness, and includes the ability to
    support traditional forces that contribute at extraordinary rates and
    in new mission areas.
        Infrastructure and facilities are increasingly important. Many
    National Guard facilities are well past their useful life. Inadequate
    facilities impact both the training and quality of life of soldiers and
    airmen, as well as drain valuable resources. Our facilities have to be
    able to support the developing roles and missions of increased National
    Guard participation in both homeland security and global contingencies.
    Infrastructure also includes the tremendous information technology
    capabilities distributed across the 54 states and territories. This
    technology is both a current and future warfare enabler--both at home
    and abroad.
        America insists on a relevant, reliable and ready force that is
    transformed for the 21st Century. Consequently, Transformation, the
    National Guard's third priority, is necessary to achieve our first two
    objectives. National leaders have consistently gone on record stating
    that America cannot go to war without the National Guard. History
    demonstrates repeatedly, the sage wisdom, and indeed democratic
    necessity, of including the National Guard in America's warfighting
    efforts. The National Guard, like no other military entity, ensures the
    American will and support for military action.
        ``When you call up the National Guard, you call up all of
    America.'' The future in this regard will not be different. National
    Guard members must be prepared to fight in new combat environments that
    include high-technology equipment and complex weapon systems. As major
    contributors to the force structure and capability of the U.S. Army and
    U.S. Air Force, the National Guard must not be left behind. From the
    outset and throughout the process, we must be a full and integral part
    of any plan to transform our military Services.
        Now, more than ever, the Army and Air National Guard are critical
    components of the Total Force and employed in a much different manner
    than just 15 years ago. Current Operational Tempos are placing wear and
    tear on our equipment at a much greater pace than planned. Legacy
    systems that cannot be replaced must be recapitalized to preserve
    combat capability and retain mission relevance. Life extension
    programs, re-engining, and modern targeting systems are a few examples
    of the improvements that continue to be needed to maintain our superior
    force. It is necessary that the National Guard be a full partner within
    all Services' modernization plans. This will allow the National Guard
    to provide the modern joint forces needed by the Combatant Commanders
    to fight and win America's wars.
        The National Guard is strong, our personnel ready, and our missions
    crucial for the security of America, her interests and her people.
    Around the world, both Army and Air National Guard commanders have
    stepped up to the challenge, accepting leadership positions which have
    allowed them to interact not only with other Service components, but
    the international community as well. Having commanded multi-national
    peacekeeping coalition forces in Bosnia, I can personally attest to the
    full spectrum capabilities National Guard forces bring to a theater. As
    Chief of Staff to NORTHCOM and NORAD, I saw firsthand that both of
    these commands cannot perform their missions without the National
    Guard. Our troops have contributed to and learned from the
    ``jointness'' of these environments. This experience will allow
    National Guardsmen in the future to further leverage their unique core
    competencies when fighting alongside other Services and our allies.
        Whether at home or abroad, securing the safety of Americans through
    homeland security functions or fighting the Global War on Terrorism are
    inherent responsibilities of the National Guard. With proper resourcing
    of both people and equipment, the Guard will always be there when the
    nation calls. As Former Congressman Sonny Montgomery has repeatedly
    said, ``This nation would be nearly paralyzed by various crises if the
    Guard did not exist.'' Thankfully the Guard does exist and will be even
    better prepared to respond to future threats with the proper support
    and direction. National security is a team effort. We are proud to be
    part of that team. Together we must lead our National Guard forward
    with determination and vision. We must orchestrate a future for the
    National Guard that combines modern and effective resources, relevant
    and comparable mission profiles, an enthusiasm to adapt to changing
    environments, and the unique spirit and patriotism of the National
    Guard citizen-soldier and airman.
    Army National Guard
        We have a non-negotiable contract with the American people to win
    our nation's wars and are entrusted with their most precious assets,
    America's sons and daughters. These sons and daughters are proud and
    patriotic members of the Army National Guard family.
        The Army National Guard plays a crucial role in providing security
    to the nation, the nation's citizens, and the interests of the country
    overseas. We fulfill our role in the National Military Strategy by
    supporting combatant commanders and conducting exercises around the
    world. Within our borders, Guard soldiers continue to provide
    assistance to victims of disaster and protection from our enemies. Our
    soldiers always stand ready to support the United States and its
    citizens whenever and wherever they are needed.
        From September 2001 to September 2002, the Army National Guard
    alerted and mobilized more than 32,000 soldiers throughout the country
    and around the world, fighting the Global War on Terrorism and
    defending freedom with our engagement in numerous operations. Operation
    Noble Eagle has mobilized in excess of 16,000 soldiers from 36 States
    and Territories to provide force protection at various Department of
    Defense facilities and at our nation's borders. Operation Enduring
    Freedom has mobilized about 16,100 soldiers from 29 States and
    Territories to support the Global War on Terrorism in Southwest Asia
    through the U.S. Central Command area of operations. Army National
    Guard soldiers are also involved in other peacekeeping operations
    throughout the world. The Global War on Terrorism, homeland security,
    and Peacekeeping are expensive undertakings for the country. It is
    critical that the U.S. armed forces receive the required funding and
    intelligently utilize those resources throughout what is expected to be
    a protracted war.
        Beyond the war effort, the Army Guard is fully integrated in the
    Army's transformation. The Objective Force for 2015 will incorporate
    the Army National Guard as part of a seamless joint, interagency, and
    multi-national team in support of rapid deployment and operations
    against a range of threats, including homeland security and the
    maintenance of a strategic reserve for extended campaigns and multiple
    engagements.
        The nation asks a great deal of the Army National Guard soldiers,
    and it is our responsibility to ensure that these citizen-soldiers are
    equipped with the best possible training, the most current aircraft and
    vehicles, and the most lethal weapon systems.
        Army National Guard soldiers, most of whom have successful civilian
    careers, sacrifice their normal lifestyle in an effort to preserve
    democracy and freedom in the nation and the world. Family members of
    our troops provide us with great support and thus help us maintain unit
    readiness and strength. Employers of these patriotic soldiers are now
    being asked to sustain a much greater level of employee absence due to
    an increased rate of deployment. Our nation owes a debt of gratitude to
    the soldiers themselves, but no less gratitude is due our families and
    our employers who allow us to accomplish our missions. Our ability to
    be ready when called upon by the American people is, and will always
    be, our top priority and our bottom line.

    Readiness

                Full-Time Support
        Recent events, including fighting the Global War on Terrorism,
    underscore the vital role Full-Time Support personnel have in preparing
    Army National Guard units for a multitude of missions both in the
    homeland and abroad. Full-Time Support is a critical component for
    achieving unit-level readiness during this period in the nation's
    history. To meet readiness requirements, the Chief, National Guard
    Bureau, in concert with the State Adjutants General, has placed
    increasing Full-Time Support authorizations as the number-one priority
    for the Army National Guard. Those full-time Guard members are
    responsible for organizing, administering, instructing, training, and
    recruiting new personnel, as well as the maintenance of supplies,
    equipment, and aircraft. Full-Time Support personnel are critical links
    to the integration of the Army's components.
        The Department of the Army validated total and minimum Full-Time
    Support levels for the Reserve Components in fiscal year 2000 and
    determined the minimum level should be attained as quickly as possible.
    The Army, Army National Guard, and United States Army Reserve
    cooperatively developed an incremental ramping method for achieving
    minimum Reserve Component Full-Time Support levels by fiscal year 2012.
    The Army National Guard minimum support level end-state is reflected in
    the ``DA High-Risk Requirement''. The Full-Time Support end-state
    provides 71 percent of the resources required. Congress has supported
    increases in authorizations and funding in fiscal years 2001, 2002, and
    2003. The Army National Guard received 794 additional Active Guard and
    Reserve authorizations and 487 Military Technician authorizations above
    the fiscal year 2003 President's Budget; these increases were funded in
    fiscal year 2003.
        While recent developments represent progress, the increase in
    missions for the Army National Guard has emerged, missions including
    the Global War on Terrorism and Homeland security that require a
    further increase in Full-Time Support personnel.

                Recruiting and Retention
        The United States cannot undertake any worldwide military
    contingency or operational effort without the National Guard. The
    events of September 11, 2001 have placed increased demands on the Army
    National Guard to recruit and retain a quality force of 350,000
    soldiers. This force of officer and enlisted soldiers is vital to
    integrating sufficiently trained and equipped personnel and units for
    response to State or federal missions.
        There is a correlation between the frequency of military
    deployments and the retention rates of Guard soldiers. This attrition
    of trained personnel, combined with the soft recruiting market, present
    new challenges for the Guard to sustain readiness levels.
        Although the Army Guard historically recruits and retains a
    sufficient number of enlisted soldiers to achieve strength objectives,
    it is currently experiencing a shortage of junior officers. Incentive
    programs will continue to assist the Army National Guard in keeping
    readiness levels high in this time of war.

                Accelerated Officer Candidate School Program
        The Army National Guard initiated a very successful accelerated
    Officer Candidate School Program in 1996. This accelerated program cuts
    11 months off the traditional course duration (eight weeks of full-time
    versus 13 months of part-time training). This is particularly
    beneficial to States experiencing large company-grade officer
    vacancies. Class sizes were increased to 200 students in 2001 and to
    400 students in fiscal year 2002 to meet the forecasted training
    requirements submitted by the States. Moreover, an additional class was
    conducted beginning in January 2003 to support the current war effort.
    The Army National Guard will continue to grow the program to address
    the shortage of company-grade officers.

                Initial Entry Training Management
        The Chief of Staff of the Army has provided guidance to the Reserve
    Component to have at least 85 percent of assigned soldiers qualified in
    their duty specialties by fiscal year 2005. The Army National Guard
    fully intends to meet or exceed this goal. In the past, the Army
    National Guard has had difficulty getting the proper Initial Entry
    Training quotas to meet the demands of the force. As a result, the Army
    National Guard has been lacking in qualified personnel in certain
    occupational specialties. These shortages affect its ability to
    mobilize and/or deploy.
        In order to meet the quota goal, the Army National Guard has taken
    input from the Adjutants General and has developed a new Initial Entry
    Training management system. This system has refined the Army National
    Guard's ability to accurately forecast Initial Entry Training
    requirements. These forecasts will more closely match that necessary to
    meet Army National Guard readiness goals than previous methods.

                The Army School System and Qualifying Army National Guard
                        Soldiers
        The Army School System is a multi-component organization of the
    United States Army Training and Doctrine Command, the Army National
    Guard, and the U.S. Army Reserve that has been organized to deliver
    Military Occupation Skills Qualification Reclassification,
    Noncommissioned Officer Education System, Officer Education System, and
    functional military courses. This system provides the National Guard
    with the means to train and retain quality soldiers and leaders who are
    so essential to rapidly and effectively responding to the federal
    mission or to missions of homeland security.
        The Army National Guard has developed an In-Unit Training program
    that has enhanced the ability to produce a larger number of soldiers
    who have achieved Duty Military Occupational Skill Qualification. The
    Army National Guard has also provided Mobile Training Teams overseas to
    sustain the training of its soldiers who are deployed around the world.
    The Army Guard and Reserve instructional, training development, and
    budget management staffs are combining efforts to build a future United
    States Army Training and Doctrine Command that can deliver seamless
    training to standards as part of the institutional training within the
    Army.
        The Army National Guard supports the initiative by the Army Deputy
    Chief of Staff for Personnel to hold selective retention boards that
    will allow selected captains and majors to be retained so that they may
    reach 20 years of active service. The Army National Guard also supports
    the Deputy Chief's initiative to select captains for promotion who do
    not possess a baccalaureate degree or military education certification.
    The actual promotion to the next higher grade will become effective
    once the individual completes the required civilian or military
    education.

                Distributed Battle Simulation Program
        The Army National Guard has structured the Distributed Battle
    Simulation Program to satisfy congressionally mandated requirements.
    Concerned with readiness and training issues, these mandates explore
    the processes of integrating training aids, devices, simulations, and
    simulators into live, virtual, and constructive training environments.
    The program focuses training on individual and crew qualification,
    platoon maneuver, and leader development/battle staff training at the
    level of organization. It provides technical support personnel and
    advisors to commanders at various levels to recommend ``best practice''
    strategies and methodologies to provide objective feedback, continuity,
    and technical support. With the proper training, simulations,
    simulators, and advanced training technologies increase opportunities
    for soldiers and units to minimize post-mobilization training time
    required for combat units.
        The challenge for the Army National Guard is to make maximum use of
    advanced technologies and simulations so as to develop mechanisms and
    processes that efficiently and effectively integrate and synchronize
    individual and collective training requirements.
        Empirical data reveals that soldiers who have practiced on various
    gunnery and maneuver simulators have much higher gunnery qualification
    rates and conduct maneuvers at higher levels of readiness than soldiers
    who are not exposed to simulators. Further, after action reviews from
    both the National Training Center and war-fighter exercises reflect
    that the Armory Based Battle Staff Training units have increased
    synchronization and raised the competencies of commanders and staff at
    brigade and battalion levels.
        The continued support for this successful program will ensure the
    readiness of the Guard in meeting future missions; live, virtual, and
    constructive training infrastructure; and training modernization.

                Combat Training Centers
        In fiscal year 2002, over 35,000 Guardsmen in 25 Army National
    Guard Combat units, including two Enhanced Separate Brigades and a host
    of support units, conducted war-fighting training at the National
    Training Center, Joint Readiness Training Center, and Battle Command
    Training Center. The training contributed to enhanced unit readiness by
    allowing these units to execute their wartime combat, combat support,
    and combat service support missions in realistic wartime scenario.

    Mobilization Issues

                Mobilizing Active Guard Reserve Soldiers under Title 32
        The Active Guard Reserve program is designed to ensure that the
    training and readiness of Army National Guard soldiers are maintained
    at a high level. These codes have very specific limits on how the Army
    or the States and Territories can utilize their Active Guard Reserve
    force in times of need.
        The events of September 11, 2001 brought these limitations to the
    forefront. Under Title 32, Active Guard Reserve soldiers are not
    authorized to support State missions after 72 hours unless specific
    criteria are met, such as the imminent loss of life. The inability of
    State Governors and Adjutants General to utilize all of their full-time
    soldiers caused some significant organizational and leadership problems
    within affected formations.
        Active Guard Reserve members are critical assets to the force,
    enabling units to rapidly respond to State emergencies and homeland
    security efforts.

                Medical and Dental Readiness
        Individual medical readiness of Army Guard soldiers has become a
    heightened priority since September 11, 2001. Individual medical
    readiness requirements include immunizations, dental, and medical
    screenings. The speed at which units deploy today places significant
    time constraints on the Guard to properly identify or correct medical
    or dental deficiencies at mobilization stations.
        In October 2001, the Army National Guard initiated the Medical
    Protection System, an automated tracking system for medical and dental
    records. This system also tracks Physical Exam readiness data, as well
    as HIV and DNA readiness data on file at the Army and Department of
    Defense repositories; it is used at mobilization stations to verify
    Individual Medical readiness in the Mobilization Level Application
    Software. When fully implemented, the system will allow commanders and
    human resource managers to monitor individual medical readiness of
    their soldiers. Resources can then be directed where needed, and early
    decisions can be made regarding the readiness of individuals and units
    to be deployed.
        It is important to understand that with very few exceptions, Army
    National Guard soldiers are not entitled to medical or dental care for
    pre-existing disorders, only for injury or illness incurred in the line
    of duty. Dental readiness is particularly problematic. Both Congress
    and Department of Defense have attempted to positively influence dental
    readiness, but the remedy is not yet available. Units are still
    arriving at mobilization stations with soldiers in need of dental care
    to bring them to deployment standards.
        If the nation continues to utilize the Army National Guard and Army
    Reserve in support of the Global War on Terrorism, it must ensure that
    these Reserve Components maintain the same high level of medical
    readiness as the active component.

    Current Operations

                Force Protection
        In fiscal year 2002, the Army National Guard provided soldiers for
    deployments in the continental United States and overseas. Almost
    20,000 soldiers worked 1,490,000 mandays conducting force protection
    missions and executing border security missions at 83 sites owned by
    the Army Materiel Command; U.S. Army Training and Doctrine Command;
    U.S. Army Forces Command; Immigration and Naturalization Service; and
    U.S. Customs Service. The National Guard supported homeland security
    missions by guarding airports, nuclear power plants, domestic water
    supplies, bridges, and tunnels in support of the State Governors.

                Contingency Operations
        The Army National Guard has assumed the lead as the stabilizing
    force in the Balkans and in Southwest Asia. Six Army National Guard
    brigades and numerous battalions participated in rotations as part of
    the Multinational Force Observers in the Sinai, and in Southwest Asia,
    providing support to the Air Defense Artillery units in Kuwait and
    Saudi Arabia. The Army National Guard is scheduled to provide Division
    Headquarters and maneuver units to four of the next six rotations to
    Bosnia.

                Partial Mobilization
        During fiscal year 2002, the Army National Guard contributed tens
    of thousands of soldiers to support the Global War on Terrorism. By
    September 2002, over 20,000 soldiers were mobilized from within the
    Army Guard's ranks, and those numbers are expected to continue to
    increase. These fine citizen-soldiers were deployed with very little
    post-mobilization training, yet stand ready to enforce the will of the
    United States.

                Military Support to Civilian Authorities
        Since September 11, 2001, Army National Guard soldiers have
    responded to 263 requests for emergency support for a total of 645,419
    mandays. These soldiers provided security, logistics support,
    transportation, and family care centers. They worked in support of
    World Trade Center relief, the Winter Olympics, and security at
    American icons such as Mount Rushmore, the Boston Marathon, and the
    Super Bowl in Louisiana. Major wildfires involving 21 States and
    consuming over 6.6 million acres required 47,519 mandays of support.
    The Army National Guard provided aviation support with water-bucket
    drops, security, and command and control as needed. The Guard's
    soldiers supported flood recovery operations in Kentucky, West
    Virginia, Tennessee, and Texas for a total of 23,882 mandays.

                Modern Infrastructure and Facilities
        Army National Guard facilities are vital for the operations,
    preparation, and execution of emergency assistance and the Global War
    On Terrorism missions. Readiness centers, maintenance facilities, and
    training centers provide the citizen-soldier a base from which to
    train, maintain equipment, and mobilize at a moment's notice.
        Most of the Army National Guard's existing infrastructure was built
    prior to 1990, with a very significant number being more than 50 years
    old. The Army National Guard has refined the method used to validate
    requirements for its aging facilities. This refinement has given the
    Army National Guard a much more accurate analysis of what is needed to
    maintain and improve the Guard's facilities. The validated requirement
    in fiscal year 2004 is approximately $1.18 billion.

                Military Construction
        The Army National Guard's Military Construction, Sustainment,
    Restoration and Modernization and Facilities Base Operations programs
    support construction, maintenance and operations of Army National Guard
    facilities.
        The programs provide facilities for Guard units and personnel to
    operate, prepare for, and execute required missions. The priority is to
    afford units with readiness, maintenance, and training facilities that
    enhance unit capability to effectively mobilize and deploy when called.
        Military Construction funding in 2004 supports general facilities
    revitalization, the Army National Guard Division Redesign Study,
    planning and design for Range and Training Lands Program, Aviation
    Transformation, and the Stryker Brigade Combat Team. General facilities
    revitalization consists of restoration and modernization based on 67-
    year recapitalization of existing facilities for current missions and
    building out facilities to support existing missions. The Army
    Facilities Strategy is a component of Facilities Revitalization. The
    program supports readiness by providing standard facilities to support
    training of personnel and maintenance of equipment for existing and new
    missions.
        The existing infrastructure is outdated and inadequate with many
    facilities unable to support current unit training or operational
    requirements. The ranges do not meet current standards and without
    adequate facilities, units cannot meet war fighting or homeland
    security readiness. At present, newly fielded vehicles are unable to
    fit into existing maintenance bays, and there is insufficient space to
    store equipment properly to ensure adequate operation.
        The increased requirements for these programs have been staggering.
    Funding for Military Construction is on the increase, though not at the
    same level as requirements. The requirement increases 62 percent in
    fiscal year 2004 and reaches almost 107 percent for fiscal year 2009.
    The funding of Military Construction increases over 5 percent in fiscal
    year 2004 and reaches an increase of about 38 percent in fiscal year
    2009.
        The Military Construction funding ramp increases considerably over
    the next five years to address the Army National Guard's facilities
    shortfalls in quality and quantity. A significant portion of this ramp
    addresses the 56th Stryker Brigade Combat Team, Aviation
    Transformation, Army Range and Training Lands program, and Army
    National Guard Division Redesign. These transformational programs
    address the facilities needs of our transforming force structure. A
    full two-thirds of the Military Construction program addresses
    facilities revitalization from fiscal years 2007 through 2009.
        The refinement of the Army National Guard real property inventory
    has increased the validated requirements for sustainment by an average
    of $4 million per year for fiscal years 2004 through 2009. Funding for
    sustainment in fiscal year 2004 is approximately 93 percent of
    validated requirements as generated by the Department of Defense
    Facilities Sustainment Model. Base Operations, requirements have
    increased significantly; however, funding has not increased at the same
    rate.

                Environmental Programs
        The Army National Guard Environmental Program is a world-class
    environmental management program; its core competency is ``ensuring the
    sustainable use of Army National Guard training lands and facilities to
    enable essential training and support functions critical to operational
    mission accomplishment.'' Through National Guard pollution prevention,
    conservation, and restoration activities, the Army National Guard
    maintains compliance with environmental laws and regulations. The Army
    Guard also practices sound stewardship and promotes innovative ways to
    ensure compatible use of sustainable natural resources in its charge
    and military training lands to support national defense.
        Within the past year, the Army National Guard has met statutory
    requirements to develop and begin implementation of Integrated Natural
    Resource Management Plans for 90 of the Army Guard's installations. The
    Army National Guard is aggressively continuing development of
    Integrated Cultural Resource Management Plans in a similar fashion, in
    addition to completing many precursor planning-level surveys, such as
    wetlands and forest inventories that fed the above major environmental
    management plans. The Army Guard's Environmental Compliance Assessment
    System program has innovative technology solutions to maintain the
    Guard's leadership role in this program.
        There are approximately 42 listed threatened and endangered species
    on 36 Army National Guard training sites, and the Army National Guard
    has proven it can maintain compatible use. The Army National Guard has
    taken the lead in developing a comprehensive computer-based tool that
    will provide near real-time data on environmental resource sustainment
    factors at training centers. These facilities are critical to realistic
    unit and weapons training. The new electronic tool will be used to
    assess environmental vulnerabilities to ensure ranges and maneuver
    lands are available for training. This capability has great potential
    for pre-emptive rather than reactive environmental management.

    Homeland Security
                Ground-Based Midcourse Defense Program
        The National Guard is playing a significant role in the defense
    against ballistic missile threat by organizing, manning, and deploying
    Ground-Based Midcourse Defense Units. The Army National Guard received
    approval to activate a Missile Defense Brigade, based on the results of
    the Total Army Analysis 2009. The Brigade Headquarters will be located
    in Colorado and the first Battalion will be located in Alaska. These
    organizations will serve as the cornerstone for the Ground-Based
    Midcourse Defense program.
        The Missile Defense Agency, Ground-Based Midcourse Defense-Joint
    Program Office has agreed to provide pay and allowance for initial
    personnel required for this program in preparation for Initial
    Defensive Operations beginning in fiscal year 2004.
        As critical as this mission component is to the national defense,
    it requires adequate full-time manning to achieve full operational
    capability. By offering the needed manpower to the Army Space Command
    and the Space and Missile Defense Command, the Army Guard will provide
    this primary land-based homeland security system.

                Anti-Terrorism Force Protection
        The Army National Guard's Anti-Terrorism Force Protection and
    physical security programs provide for security and protection of
    facilities, personnel, and equipment, as well as the monitoring and
    maintenance of intrusion detection systems that detect and assess
    threats at 397 critical sites. Intrusion systems, closed circuit
    television, and access control systems decrease the number of personnel
    needed to guard facilities as well as prevent personnel from exposure
    to potentially harmful situations. The security systems save on
    personnel costs: Fewer soldiers are needed to guard Department of
    Defense facilities, equipment, and property and are channeled instead
    into mission deployment or crisis management.

                Guard Knowledge Management
        The Guard Knowledge Management initiative and the Distributive
    Training Technology Project support the Army National Guard's ability
    to maintain and improve individual and unit readiness, the ability to
    mobilize, and quick, efficient deployment. Through the effective
    integration of information technology programs and implementation of
    Knowledge Management initiatives, the Army Guard is enhancing its
    capability to identify, distribute, and access critical information
    that directly impacts the Army Guard's ability to meet readiness goals
    and mission objectives.
        For example, the Army National Guard saves money and resources and
    heightens readiness by providing increased foreign language sustainment
    and enhancement training using distance-learning technologies.
    Courseware is being developed at several sites throughout the United
    States, including Iowa, Pennsylvania, Arizona, Arkansas, and New
    Jersey. In addition, the Vermont Army National Guard has been
    conducting Information Operations training since February 1999 for all
    components of the Army. The Army National Guard made full use of its
    Knowledge Management capabilities to conduct extensive pre-deployment
    training for the 29th Infantry Division (Light) Headquarters for their
    peacekeeping rotation in Bosnia.
        The Army Guard has also partnered with the National Air and Space
    Administration to deliver a wide array of educational content to young
    people to stimulate interest in science, math, and technology. The Army
    National Guard is building on these and other success stories to help
    increase readiness through a vigorous implementation of Knowledge
    Management principles.

    Transformation

                Legacy Force Sustainment
        While still experiencing critical modernization challenges in High-
    Mobility Multi-Purpose Wheeled Vehicles, Single-Channel Ground and
    Airborne Radios, chemical and biological detection equipment, and Night
    Vision Devices, the Army National Guard continues to improve its
    overall readiness posture. The redistribution of assets will continue
    to be a part of the remedy to a variety of shortfalls throughout the
    Army National Guard's force. As the Army National Guard completes its
    Division Redesign, some equipment will be made available for use in
    other formations. Similarly, as the 56th Brigade in Pennsylvania
    transforms, equipment will be redistributed.
        Over the last decade, the Army National Guard has made significant
    progress in modernizing the heavy force with the M1A1 Abrams, M2A2
    Bradley, M109A6 Paladin, and M270 Multiple Launch Rocket System. It is
    the Army National Guard's plan to continue efforts to transform
    equipment and technologies to ensure interoperability and readiness
    levels.

                Interim Force
        The Army National Guard modernization strategy provides for a
    compatible and fully networked force. A key component of the
    transformation strategy is the activation of the 56th Brigade of
    Pennsylvania that is expected to become the first Army National Guard
    Stryker Brigade prior to 2008. Overall, the six Army-wide Stryker
    Brigade Combat Teams' mission is to be a rapid deployment force that
    can be deployed anywhere in the world in 96 hours.
        The Army National Guard's highest priority remains maintaining war-
    fighting readiness. In support of this imperative, the organization is
    pursuing a modernization strategy that will provide the nation with
    compatible, interoperable, and strategically viable forces well into
    the future. The transformation campaign plan articulates the strategy
    of how to achieve the Army vision of an objective force that is more
    responsive, deployable, agile, versatile, lethal, and sustainable in
    times of crisis. Current forces will continue to be viable long into
    the future and will provide the margin of security that allows the Army
    to undertake transformation. The Army will maintain the combat
    overmatch capabilities of the current force through selective
    modernization, technology insertion, and recapitalization. The Army's
    plan is to have all of Pennsylvania's Stryker Brigade Combat Team's
    facility construction and other infrastructure requirements started by
    fiscal year 2006.

                Objective Force
        The Army National Guard Division Redesign Study is a four-phase
    transformation project. Phases I and II of this study will involve the
    conversion of six brigades along with a portion of two divisions. The
    purpose is to address a long-standing U.S. Army concern regarding a
    lack of combat support and combat service support in the force
    structure.
        Military construction is required to meet this critical change, and
    with the assistance of 24 participating States, the Army National Guard
    is in the process of planning the modification and rebuilding of older
    facilities to accommodate this new mission. Phases III and IV are under
    revision, and the pending Army Guard Restructuring Initiative will most
    likely impact these later stages of restructuring; funding for this
    initiative is in excess of $370 million.

                Restructuring Initiative
        On September 8, 2002, Secretary of the Army Thomas E. White
    introduced the Army National Guard Restructuring Initiative at the 2002
    National Guard Association of the United States annual conference. Mr.
    White stated that ``in light of our new plan for national defense [we]
    are now undertaking a new initiative which we will call the Army
    National Guard Restructuring Initiative. Whereas the original
    initiative Army Division Redesign Study converts combat formations to
    support structure, the new initiative restructures a sizeable portion
    of the National Guard combat formations to better support our combatant
    commanders' requirements.''
        The concept is to convert existing heavy and light combat structure
    to new designs that better support Combatant Commanders (including the
    new Northern Command) under the new defense strategy. Tentatively
    called Multi-Functional Divisions and Mobile Light Brigades, these new
    organizations will be first and foremost war-fighting organizations
    prepared for full-spectrum operations. The first unit could begin
    conversion as early as fiscal year 2005.
        The conversion to these new organizations, combined with efforts
    already under way as part of the Army National Guard Division Redesign
    Study effort, will result in a 30 percent decrease in the current
    number of tracked vehicles in Army Guard Combat Divisions and Brigades.
    Although this constitutes a reduction of heavy assets, the National
    Guard is determined to ensure that the Army Guard does not maintain
    obsolete systems that are inconsistent with future Army operational
    concepts including unit design, support and sustainment.

                Aviation Transformation
        Army National Guard aviation is one of the nation's highest value
    assets for both wartime and peacetime missions. In wartime, these Army
    National Guard aviation units provide the sustaining and reinforcing
    power required for successful execution of the National Military
    Strategy, as well as the most readily available Army aviation assets
    for homeland security. In peacetime, these critical aviation assets are
    equally important for the widest possible range of missions at both the
    State and Regional levels. These peacetime missions range from Air
    Ambulance, Search and Rescue, and Counterdrug support in areas having
    no such civilian capacity, to wide-scale and timely response to both
    natural and man-made disasters.
        The Army National Guard's aviation units continue to contribute
    almost half of the Army's aviation structure, including Counterdrug
    Reconnaissance and Aerial Interdiction Detachments in 37 States and
    Territories, which use specially modified OH-58 observation aircraft to
    support federal, State, and local law enforcement agencies with
    counterdrug efforts in the United States. These units are also postured
    to support homeland security efforts. Six of these units were deployed
    along the Northern Border supporting the U.S. Border Patrol and
    Operation Noble Eagle during fiscal year 2002.
        Since fiscal year 2002, the Army's Aviation Transformation effort,
    coupled with other aviation modernization and recapitalization
    improvements, has not only significantly improved the readiness and
    capabilities of Guard aviation units, but also has reduced the overall
    aviation footprint. While significant quantities of modern series UH-
    60, CH-47, and AH-64 aircraft have been cascaded from active Army units
    to Army Guard units, the associated equipment (tool set, tool kits,
    test equipment, and parts) critical for the successful support of these
    aircraft has not kept pace. Current Army procurement levels will leave
    the Army Guard permanently short of its required number of aircraft. In
    addition, many of the remaining allocated aircraft are not scheduled
    for upgrade to the most current standard configurations:
      --AH-64 ``Apache''.--Army National Guard will receive 254 of 296
            required (42 short). Of the 254 AH-64s to be provided, only 63
            will be the most modern AH-64D model.
      --CH-47 ``Chinook''.--Army National Guard will receive 136 of 150
            required (14 short). Of the 136 CH-47s to be provided, only 93
            will be the most modern CH-47F model.
      --UH-60 ``Blackhawk''.--Army National Guard will receive 687 of 775
            required (88 short). All 687 are scheduled for eventual upgrade
            to most modern UH-60M model.
      --Homeland Security/RAID Aircraft.--The OH-58A/C aircraft currently
            used for this mission are nearing the end of their useful life
            span.

                Personnel Transformation
        The Army Guard's Permanent Electronic Records Management System is
    a web-based system utilizing digital imagery to store and retrieve
    personnel records. The importance of the Permanent Electronic Records
    Management System lies in its seamless records management capability
    throughout the Army, enhancing both mobilization and personnel
    readiness.
        By consolidating the administrative operations of human resources
    in one place, the Permanent Electronic Records Management System allows
    personnel records to follow a soldier regardless of component. In the
    past, the system was slow and labor-intensive, resulting in pay
    problems, promotion delays, difficulties in making new assignments, and
    low personnel morale. Fixing the problem involves the conversion of
    paper files to electronic files; and is a practice currently used by
    the Department of the Army for all of its personnel actions. At present
    the Army National Guard is the only military component that lacks
    electronic records storage capability.
        Under the Department of Defense's vision for a ``paperless
    environment,'' the Army National Guard will be required to provide
    electronic capabilities for personnel records in the 50 States, three
    Territories, and the District of Columbia.
        The Army National Guard will adopt an Automated Selection Board
    System to support and improve the process under which information and
    votes regarding personnel actions are processed by military personnel
    boards.
        Departing from an obsolete ``paper'' system to a digital system
    that views data and images from the Permanent Electronic Records
    Management System and the Department of the Army Photo Management
    Information System is a time-consuming process. However, once the
    Automated Selection Board System is adopted, it will save the Army
    National Guard more than $150,000 per year in microfiche production and
    postage costs.
        This system is essential to achieve and fully support Personnel
    Transformation. The Army National Guard must remain interoperable with
    the Army and the Army Reserve by adopting this system. The conduct of
    boards at the State level will become extremely cumbersome due to
    unavailability of routine printed information. By failing to adopt the
    Automated Selection Board System, the Army National Guard will be
    required to download paper copies of an automated viewing and storing
    system.

                Strategic Readiness System
        The Army National Guard's Strategic Readiness System was developed
    pursuant to the Chief of Staff of the Army's guidance for a more
    holistic assessment of readiness information. The Strategic Readiness
    System is an integrated strategic management and measurement system
    that ensures that all levels of the Army, including the National Guard
    Bureau and the Army National Guard, recognize and align their
    operations to the vision, objectives, and initiatives of the Army Plan.
    The system also measures each element's success in achieving these
    goals.
        The Army Scorecard is the tool used to measure progress toward
    stated goals and objectives. This tool will enable the Army National
    Guard leadership to see the resource and readiness linkages throughout
    the system and better predict a modeling capability that improves the
    allocation of resources to achieve the highest degree of readiness.

    Conclusion
        The Army National Guard comprises diverse individuals from all
    walks of life united by the desire to keep the American people safe and
    secure. Many soldiers in the Guard leave behind promising career tracks
    and loving families to serve their country without compromise or
    hesitation. These soldiers lead dual lives; their sacrifices are
    overwhelming and should not be forgotten or discounted.
        Army National Guard soldiers have accomplished much work ``behind
    the scenes'' in the past fiscal year, providing relief to victims of
    catastrophes, security at numerous vulnerable locations, and
    mobilization to various military operations world-wide. The Army
    National Guard, the crucial foundation of the Army, reinforces and
    augments the efforts of fellow soldiers to ensure that objectives are
    achieved and initiatives are met.
        While it has succeeded on many fronts, certain challenges still
    face the Army National Guard. The issues of recruitment, retention, and
    subsequent development of junior officers continue to be areas of
    discussion. Dental and medical care remain sub par or lacking for many
    soldiers in the Guard. Furthermore, the dearth of cutting-edge, state-
    of-the-art facilities and equipment hampers the efforts of the Army
    National Guard to perform at an optimum level.
        The Army National Guard is a stalwart entity that is ever ready to
    protect and defend the United States with zeal and determination. With
    proper and judicious funding over the coming years, its continued
    transformation will ensure brighter prospects for the Army itself and
    the American people.

    Air National Guard
        The year 2002 will be marked by the volunteer spirit and dedication
    of Air National Guard men and women spanning the globe: the War on
    Terrorism at home, the War on Terrorism abroad, and ``routine''
    deployments as full partners in the Air and Space Expeditionary Force.
    Since September 11, 2001, we've been busier than ever before. We've
    been flying fighter combat air patrols over cities keeping our country
    safe. We've been seeking out terrorists where they live. We've been
    gathering and interpreting data supporting the warfighters and securing
    airports, bridges, and military installations. We've maintained our
    aircraft and communications infrastructure so the mission can be
    accomplished. We've done this with volunteers and mobilized personnel,
    most of whom left their families and jobs to serve. We've done this as
    proud members of the Total Force even while we continued to train for
    what lies ahead.
        During his campaign in Tunisia, General Eisenhower said, ``It is
    not the man who is so brilliant who delivers in time of stress and
    strain, but rather the man who can keep on going.'' The Air National
    Guard not only delivered in a time of stress and strain but also kept
    on going. In this past year we've gone from a surge force to a
    sustaining force. At the peak of operations in February 2002, almost
    15,000 people were mobilized and almost 8,000 were volunteers.
    Throughout the summer both the volunteers and mobilization numbers came
    down as the War on Terrorism reached a lower tempo. Often times we were
    employed as a ``just in case'' force rather than a ``just in time''
    force, mobilizing personnel in case they were needed rather than when
    needed to fulfill immediate requirements. On many occasions Air
    National Guard members were mobilized to backfill deploying active duty
    troops. Employers understand better, as do families, when Guard men and
    women deploy overseas rather than backfill. Whatever the call, we were
    there.
        We've been a solid team player in Operation Enduring Freedom and
    the Air and Space Expeditionary Force. As fiscal year 2002 came to a
    close, we had flown 25 percent of the fighter sorties, 31 percent of
    the tanker sorties, and 27 percent of the airlift sorties. Through
    innovative management techniques such as ``rainbowing'' units, we've
    been a seamless part of the Total Force. We will continue to prosecute
    the War on Terrorism on all fronts.
        Combat operations couldn't happen without the exceptional support
    capabilities provided by maintainers and logisticians; civil engineers
    and security police; communicators and intelligence analysts. These
    myriad support skills are brought to bear to make operations
    successful. Many of these specialties are ``stressed'' but the troops
    keep on giving.
        Air National Guard citizen-airmen are the backbone of Operation
    Noble Eagle. By the end of fiscal year 2002 we had flown 74 percent of
    the fighter sorties, 62 percent of the tanker sorties, and 36 percent
    of the airlift sorties. We maintained almost 100 percent of the alert
    sites. The Air National Guard is extremely proud of its ability to
    execute the homeland security mission. Through smart management of
    resources and capabilities, we can continue to participate in the
    homeland security mission as a by-product of our wartime tasking.
    Continued Air National Guard participation in the Air and Space
    Expeditionary Force is vital to our wartime readiness. Any unique
    homeland security missions should be appropriately resourced.
        As the War on Terrorism continues, our people and systems will be
    employed at above-average rates. Through utilization of civilian skills
    and innovation, Air National Guard professionals are keeping our aging
    systems up and running. But in the face of fiscal and manpower
    constraints the nation will not be able to afford the high costs
    associated with maintaining legacy systems; therefore, the Air National
    Guard will need to be transformed across the full spectrum of missions
    with our active brethren. Through transformation to future high-tech
    systems such as information operations, space-based capabilities,
    Unmanned Aerial Vehicles, C-17, and F-22 and Joint Strike Fighter, we
    will be able to continue to leverage our civilian skills to make the
    most of these systems' capabilities.
        Technology, however, is only one part of transformation. Other
    parts include concepts of operations and organizational structures. The
    Air National Guard stands ready to explore and implement new concepts
    of operations and organizations. We've done so already with the 116th
    Air Control Wing at Robins AFB, Georgia. Together with the active force
    we've established a Total Force unit that will highlight the
    capabilities of both components and have broken down barriers that
    would have otherwise precluded this structure. This is the right kind
    of unit for the right mission. Not all future total force units should
    look like this but should be reviewed on a case-by-case basis.
    Additionally, we should consider ``Reverse Associate'' units where
    active duty members are associate to an Air National Guard unit. This
    will take advantage of the operational infrastructure savings
    associated with Air National Guard installations while broadening
    assignment opportunities and experiences for active members.
        Since the entire force cannot be transformed at once, some part of
    the force will need to be modernized to include the latest
    capabilities. Areas that are best suited for modernization include
    facilities, precision-guided munitions, communications systems, air
    refueling platforms and engines. These systems are necessary to provide
    the required capabilities to fly and fight in today's battlefields.
    Today, the Air National Guard is a vital part of this great nation's
    security. We will proactively face the challenges ahead to remain a
    ready, reliable, and relevant force.
        Ready speaks to being sufficiently manned with trained personnel
    capable of doing the global mission on short notice. Ready means
    jumping into an aircraft and launching in minimum time should we be
    attacked. Ready means support troops who can build and sustain support
    facilities at austere airfields anywhere in the world when called upon.
    Ready is being able to deploy in support of the Air and Space
    Expeditionary Force to Turkey, Bosnia, or Iceland. Ready is the ability
    to patrol airports or deliver food and supplies to those affected by
    natural disasters. We are ready!
        Reliable means that we can be accessed when we are needed. Reliable
    means that whether through volunteerism or mobilization we have the
    required people ready to go when and where needed. Reliable means we
    can respond to the Governor of a state when in state duty or to a
    Combatant Commander when federalized. Reliable means we'll be there,
    and we will be!
        Relevant means we are modernized and transformed to carry out
    missions that are important to support the national security strategy.
    Relevant means we've got targeting pods and the latest radar and
    protective gear. Relevant means we're part of the F/A-22, Space, C-17,
    ISR, and information operations. It means we are an important part of
    our nations defense, and right now, we are.
        This is our biggest challenge.
        As the War on Terrorism continues, as does operations in other
    critical regions of the world, the Air National Guard will be there. We
    will continue the militia heritage of defending freedom as we did over
    366 years ago. Our citizen-airmen will respond to the nations call to
    put on their uniforms to fight for our nation's interests. While they
    answer our call, we must answer theirs as we provide them with the
    tools to accomplish the mission. We must give them what they need to be
    Ready, Reliable, Relevant. Air National Guard. Now More Than Ever!

    Air National Guard Infrastructure
        The Air National Guard Infrastructure provides the Department of
    Defense enhanced operational capacity with its presence at 176
    locations throughout the country. As a recurring problem, the Air
    National Guard has experienced significant difficulties in absorbing
    new mission projects without adversely affecting restoration and
    modernization efforts to support current weapon systems.
        Air National Guard facilities continue to deteriorate due to
    inadequate funding levels. Many facilities are in ``forced use''
    condition, which requires unit personnel to endure substandard
    facilities. Lack of safe, efficient and modern facilities is impacting
    Air National Guard ``Quality of Life'', recruiting and retention. The
    condition of the facilities directly impacts how effectively units are
    able to respond to training, staffing, and other wartime needs.
        With respect to homeland defense, we are concerned about the
    attention to the operational needs of alert aircraft at Andrews Air
    Force Base, Maryland; Buckley Air Force Base, Colorado; Truax Field,
    Wisconsin; and other sites either standing alert with fighters and
    tankers. After September 11, 2001, interim facilities were quickly
    provided, however little progress has been made since the initial surge
    to address permanent facilities alert missions at existing and
    potential sites. The Air National Guard is also concerned about the
    level of anti-terrorism and force protection funding to protect our
    personnel and equipment. Terrorism in the homeland has forced us to
    rethink and reprioritize how we secure our bases and sites.
        Our fiscal year 2004 funding request allows us to achieve a
    recapitalization rate of 170 years, meaning that we renovate or replace
    our facilities an average of every 170 years. Our goal remains a 67-
    year recapitalization rate, and our current program would achieve that
    level in 2000?. Between now and then we plan to follow a smooth glide
    path down to that level.

                Readiness (Full-Time Manning)
        As an integral partner in the Total Force, fully imbedded into a
    formalized Air Expeditionary Force construct, the Air National Guard
    will routinely provide force structure for day-to-day operations,
    contingencies and the Global War on Terrorism. Historically, as a
    ``force in reserve'' the Air National Guard was funded with limited
    full-time manpower to operate and maintain facilities, repair aircraft
    and equipment, and train the drilling force. Today's operational tempo,
    combined with aging aircraft, weapon systems and ever increasing
    support requirements, the Air National Guard must be adequately
    resourced to ensure these weapon systems are available for training and
    deployment.
        We recently accomplished a complete review of both our full-time
    and traditional manpower requirements. Our review identified areas
    where we need to realign our manpower and validated increased
    requirements. Our fiscal year 2004 budget supports and reflects our
    realignment and provides some increased full-time funding and end
    strength. This is just the first step in getting our manpower resources
    right. Emerging homeland security tasking and mission readiness needs
    will drive additional manpower requirements and further realignments.
        As demonstrated in Operations Noble Eagle and Enduring Freedom, the
    Air Force could not go to war without the Air National Guard and the
    Air Force Reserve. Additionally, the Air Force would be severely
    hampered in conducting peacetime operations without its reserve
    components.
        The National Guard and Reserve Operations Tempo currently provide
    25 percent of the aviation and almost 30 percent of the combat support
    elements for steady, peacetime deployments of the Air and Space
    Expeditionary Forces. They also provide more than 65 percent of the Air
    Force's tactical airlift capability, 35 percent of the strategic
    airlift, 60 percent of the air refueling, 38 percent of the fighters,
    20 percent of combat rescue and make significant contributions to
    bomber, and combat support missions.

                Information Operations and Management
        The Air National Guard is fully involved in the defensive elements
    of information supporting the nation's homeland security efforts. The
    civilian sector is heavily dependent on the national information
    infrastructure, and the military relies upon the Air National Guard to
    carry out its missions at home and overseas.
        In addition to preparing for conventional combat, the Air National
    Guard must now provide the most up-to-date protection against what has
    become known as information or cyberspace' wars. Participation in this
    mission area requires an investment in infrastructure to allow for the
    Air National Guard to connect with classified network systems that have
    sufficient bandwidth and capacity to store, process, and transmit
    unprecedented amounts of data.
        By using advanced technology information weapons systems, the Air
    National Guard directly supports the Department of Defense's vision of
    transformation. A new age of warfare includes information that consists
    of a wide variety of operations and activities, such as psychological
    operations, electronic warfare, military deception, physical attack,
    computer network attack, defense, and exploitation, public affairs
    operations, counter deception, counterintelligence, and
    counterpropaganda operations.

                Annual Dental Examinations Program
        Currently, the Air National Guard is required to accomplish a
    dental examination every five years. The Office of the Assistant
    Secretary of Defense for Health Affairs has mandated that this exam be
    accomplished annually beginning February 2004. Air National Guard
    Medical Squadrons are only authorized two dentists and two dental
    technicians; however, many units may only have one or no dentists
    assigned to accomplish these dental requirements. Air National Guard
    Medical Squadrons are struggling to accomplish the current 400-500
    dental exam requirements along with their mandated training. This
    mandate will increase their workload to 1,100-1,300 dental exams each
    year.

                Mobilization
        In today's Air Force, the Air National Guard is central to the
    Total Force, and plays an ever-increasing role as a partner in the
    Global War on Terrorism. Now, more than ever, the Guard is needed by
    the nation to perform the mission they have been trained to do. Most
    Air National Guard members have served in support of Operations Noble
    Eagle and Enduring Freedom, and many more will continue to deploy to
    fill Air and Space Expeditionary Force steady state requirements around
    the globe. Their service is not without sacrifice and their sacrifice
    is not without meaning.
        Numerous personnel issues have surfaced around the disparity of
    benefits associated with different status of service following
    mobilization. Of notable importance, protection under the Soldiers' and
    Sailors' Civil Relief Act applies only to a member mobilized under the
    provisions of Title 10 U.S.C., and was not afforded to our citizen-
    airmen serving in airport security.
        Current policies and laws are now under scrutiny to alleviate
    issues of disparity such as per diem limitations, down-time
    restrictions, Basic Allowance for Housing I vs. II, income pay
    protection, leave issues, and a myriad of entitlements and benefits
    that are affected by either status or length of active duty tours. The
    Air National Guard, as a full partner in the Total Force, will continue
    its advocacy for parity in pay, entitlements and benefits. In its role
    as a force provider, the Air National Guard will honor the commitment
    to provide the right person, at the right place, at the right time.

                Chemical Warfare Defense Equipment Program
        The Air National Guard's Chemical Warfare Defense Equipment program
    plans to be strategically positioned to provide individual equipment
    protection, including individual chemical suits, gas masks, filter
    canisters, hoods, boots, and gloves, to protect each member against
    chemical or biological attack.
        The Air National Guard identified a $66.8 million Chemical Weapons
    Defense Ensemble Mobility Bag requirement to provide initial protection
    for all members and to fund the replacement of Mobility Bag shelf-life
    assets.

                Depot Purchased Equipment Maintenance
        The Air National Guard's Depot Purchased Equipment Maintenance
    Account pays for depot level maintenance of all aircraft, aircraft
    engines, special purpose vehicles, and other major items of equipment
    (e.g., ground radar/radio sets). The major goal of the program is to
    decrease the levels of deferred depot maintenance.
        The Air National Guard is concerned about the spiraling costs for
    organic and contract programmed depot maintenance and the impact on our
    aging aircraft fleet. Increasing costs and under funded budget
    requirements have resulted in an Air National Guard's Depot Purchased
    Equipment Maintenance program that approximates an 80 percent funded
    level.
        Based on fiscal year 2003 projected budgets, funding shortfalls may
    result in eight KC-135, three F-15 and one C-5 aircraft not being
    inducted into the Depot Maintenance Program at the appropriately
    scheduled time frame. We are concerned about what impact this
    continuing annual funding shortfall has upon the current and future
    readiness of the Air National Guard.

                Vehicle Priority Buy Program
        The Air National Guard Vehicle Priority Buy program is struggling
    to keep pace with mission requirements associated with homeland
    security, new Alert sites, Security Force protection, medical
    evacuation teams and new aircraft conversions.
        At the present time, 43 percent of the Air National Guard vehicle
    fleet is due for replacement, at a cost of approximately $315 million.
    Our budget includes $40 million, or roughly 13 percent of this
    requirement, to replace vehicles in the inventory in fiscal year 2004.
        The Air National Guard vehicle fleet will continue to age and
    become more costly to maintain. This underscores the need to replace
    vehicles. While we plan to replace the rest of the aging vehicles over
    time, the rate at which we are currently replacing them, coupled with
    additional requirements to support newly emerging homeland security
    needs, could severely impact our near-term vehicle readiness.

                Nationwide Information Technology Network
        The Air National Guard is in the process of modernizing its
    nationwide information technology network that serves a vital role in
    homeland security and national defense. Reliable, available and secure
    information technology is essential to Air National Guard, Air Force,
    Department of Defense, and state authorities in their ability to
    exercise control and command of information resources impacting their
    various constituencies.
        The Air National Guard Information Technology Network is critical
    to the successful transmission of information within a unit, between
    units, and among the various states. Without a healthy and robust
    Information Technology network most other Air National Guard missions
    will not be able to function. No Air National Guard function can stand
    alone without interface and interaction with several other functions
    and the network is the link that provides the medium to share
    information at all levels.
        The Air National Guard has made significant progress in procuring
    network hardware and personal computer and server software that
    decreases complexity and increases network communication with Air Force
    and Department of Defense partners. Striving to accomplish a nationwide
    reduction of network servers by consolidating core network services to
    regional operations centers, the Air National Guard must first upgrade
    its own communications and network infrastructure, technologies, and
    facilities.
        Continuing to fund the Air National Guard Enterprise Network at
    last decades level will continue to give us last decade's capabilities.
    The rapidly changing hardware and software requirements of our
    warfighting and combat support functions come with a significant cost
    to upgrade and maintain a fully capable Information Technology network.
    The Air National Guard network is funded and maintained at the same
    level it was during the 1990's. Without a significant infusion of new
    technology, all other Air National Guard mission areas will be less
    than fully capable of prosecuting their missions. One time cost
    estimates to bring the Air National Guard Enterprise Network up to a
    fully capable and robust condition are approximately $80 million,
    coupled with a significant increase in sustainment and refreshment
    funding to maintain and upgrade the Information Technology Enterprise
    to fully support all other mission areas in the continuing war on
    terrorism and homeland security. This modernization initiative will
    certainly enhance the Air National Guard's interoperability with other
    federal and state agencies.

                Capabilities Based Military Force
        The Air National Guard is a solid partner with the Air Force, the
    Air Force Reserve, and all collective units of the Department of
    Defense designed to protect national security and maintain
    international peace. The Defense Department priority is Transformation
    and therefore the priority of the active services and the reserve
    components.
        Transformation as ``relevancy'' is dependent on the Air National
    Guard readiness, in both state and federal missions, being able to
    support service apportioned and Joint Chiefs validated Combatant
    Commander required ``capabilities.'' Becoming a ``capabilities based''
    military force translates into the Air National Guard's need to acquire
    new technology and equipment to maintain a state of readiness and
    relevancy now and in the future. The Air National Guard must embrace
    the process of transformation and intelligent risk-taking to provide a
    fully trained, equipped and ready force to defend the nation at home
    and overseas.
        The Air Force is pursuing innovative organizational constructs and
    personnel policies to meld the various components into a single,
    unified force. Future Total Force integration will create efficiencies,
    cut costs, ensure stability, retain invaluable human capital, and,
    above all, increase our combat capabilities. Another transformation
    effort is to ``blend,'' where sensible, units from two or more
    components into a single wing with a single commander. Active, Guard,
    and Reserve personnel share the same facilities and equipment, and
    together, execute the same mission. This is a level of integration
    unprecedented in any of the Services.
        Potential future missions might include Unmanned Aerial Vehicles
    and their training programs, combining the Unmanned Aerial Vehicle
    squadrons with their manned fighter counterparts; integrated fighter
    squadrons realizing the benefits of highly trained personnel flying
    legacy systems during the transition period to newer fighter aircraft
    like the Joint Strike Fighter. The Air National Guard has been steadily
    increasing its participation in space operations over the years and
    already plays a vital role in missile warning, satellite command and
    control, and launch operations. These contributions will be key during
    conflicts envisioned in the future.
        These changes confirm and continue the trend in which air and space
    forces carry a heavier share of the burden in the nation's wars. The
    new strategy and force-sizing standard point to an increase, not a
    decrease, in aerospace power.
        Since September 11, 2001, Air Force components have flown most of
    the subsequent air defense sorties in Operation Noble Eagle, with the
    Air National Guard flying 74 percent of the total missions. The Air
    National Guard must be resourced in order to sustain our nation's fight
    against the war on terrorism in defense of the homeland. This new
    theatre of operations paves the way to transform the experience of the
    Air National Guard to effectively respond to homeland security missions
    in an expeditionary role.
        The Air National Guard will continue on its Total Force journey
    hand-in-hand with the Air Force, the Air Force Reserve and, indeed, all
    of the Department of Defense away from a threat based force toward the
    ``capabilities based'' force that will be required into the future. The
    Air National Guard will always provide a ready, reliable, and relevant
    force that America can count on now, and, through Transformation,
    solidly into the future.

                Intelligence Surveillance and Reconnaissance
        As a strong defense, Air National Guard eyes in the skies' approach
    to surveillance and reconnaissance provides the nation with protection
    from hostile air or land attacks. To increase its intelligence
    surveillance and reconnaissance capabilities, the Air National Guard
    seeks to expand our capabilities to intelligence imagery with
    deployable commercial imagery downlink and exploitation system (Eagle
    Vision), and modernize and increase the capability of the Air National
    Guard's signals intelligence. This system will be very beneficial to
    homeland security missions across the broad spectrum from natural
    disasters to terrorism assessments.
        In much the same way that National Guard assets have been
    effectively employed in the war on drugs, the mission of the global war
    on terrorism plays a large role in how the Air National Guard is
    directing its focus and personnel. New intelligence, surveillance, and
    reconnaissance capabilities will be particularly useful in conducting
    domestic missions dealing with natural disasters in which the Air
    National Guard can assist states with relief efforts caused by
    tornadoes, floods, and hurricanes.

                Air National Guard Space Operations Program
        For the Air National Guard, Space Operations provide a critical
    communications link to communities throughout the nation in the form of
    satellite support for everyday uses (television, computers, wireless
    phones), but also serve as an important military deterrence from
    external threats. Recently, two Air National Guard units in Wyoming and
    California have come out of conversion to provide operational command
    control support to Northern Command and to provide round-the-clock
    support to the Milstar satellite constellation.
        Additionally, the 114th Range Flight in Florida is partnered with
    an active Air Force unit performing the Launch Range safety mission.
    There are future plans by the Air Force to transition additional space
    program assets to Air National Guard control.

                Logistics Information Technology Program
        The National Guard Logistics Information Technology Modernization
    programs will enable the Air National Guard to operate seamlessly with
    active and reserve counterparts in support of combat operations or
    other contingencies in all operational theaters.
        This Air National Guard initiative ensures that the organization
    maintains interoperability with common worldwide contingency systems.
    This involves plans to modernize logistical information technology
    systems, including Digital Technical Data, Joint Computer-Aided
    Acquisition and Logistics Support, Wireless Local Area Network, Tool
    Accountability Systems, and Integrated Maintenance Data Systems. The
    Air National Guard effort to sustain these modernization programs and
    initiatives has been estimated to cost $314 million.

                Expeditionary Medical Support (EMEDS) Transformation
        The Air National Guard's Expeditionary Medical Support response
    platform is a comprehensive medical system that is designed to provide
    for homeland security consistent with meeting the requirements of major
    theater warfare or peacetime disaster response support. Like an
    airborne portable hospital, this is truly the lightest, leanest, and
    most capable deployable medical platform available to the Air National
    Guard today.
        The Air National Guard Air Surgeon's Office has established
    personnel packages that will be able to support 15 Expeditionary
    Medical Support packages (two on-call) for each Aerospace Expeditionary
    Force deployment and 13 available for homeland security if deployed
    through state-to-state compacts or the national-level Emergency
    Management Assistance Compact. The personnel packages were placed in
    each Air National Guard unit, effective with the publication of the
    unit manpower and planning documents. Once the equipment sets have been
    acquired, they will be strategically pre-positioned throughout the
    continental United States and will provide the flexibility of
    responding to any disaster within several hours from activation. The
    equipment and personnel packages will be positioned to provide both a
    distinct wartime capability and military support to civil authorities
    in each Federal Emergency Management Agency region. Each region will
    have an Expeditionary Medical Support +25 or Expeditionary Medical
    Support +50 capability, with the ability to provide multiple medical
    response teams configured for support of the first responders. Our
    objective is to obtain two Expeditionary Medical Support equipment
    sets, one to be placed on each coast.
        With Operation Iraqi Freedom, our transformed ANG Medical Service
    deployed for the first time ever these revolutionary medical wartime
    platforms. In several cases, our ANG medical personnel were deploying
    with this new capability at the same time many active duty units
    deployed. A remarkable point to be made is that this capability, added
    to the Guard in January 2003, is currently being deployed to serve our
    fighting forces in Iraq. Though we are currently recruiting to fill
    full teams, we have identified 39 teams of critical care physicians,
    nurses, and technicians, across the ANG, volunteering to go forward.
    The Air Mobility Command Surgeon General, who is responsible, as the
    force provider, for these critical care teams, could not have
    accomplished this mission without the critical day-to-day clinical
    expertise of our guard members. We are clearly postured medically for
    the future.

                Modernization
        The Air National Guard Modernization program is a comprehensive
    effort to leverage programs from the Air Force with appropriated
    funding to keep the Air National Guard ready, reliable and relevant for
    today and tomorrow's operational theaters. The Modernization Program is
    segmented into three time frames: short-term (the current and next
    year's Defense budget), medium-term (out to 2010), and long-term (out
    to 2015).
        The Air National Guard Modernization Program directly supports the
    Global War on Terrorism by providing weapon systems engaged in combat
    operations overseas, domestic surveillance and combat air patrols. As
    upgrades are made to the various systems, it is incumbent on the Air
    National Guard to provide reliable systems, as well as effective
    training, to ensure the highest state of readiness for forces
    participating in the on-going combat operations. The arrival of the
    Block 25/30/32 F-16s into the Afghan theater, with their Litening II
    precision targeting pods, provided the Special Forces engaging Taliban
    and Al Qaeda forces on the ground with a unique, laser-spot-tracking
    capability. With our forces closely engaged with a tenacious enemy in
    very rough terrain, the Block 25/30/32 F-16s were the number one choice
    of the ground troops when requesting close air support. Air National
    Guard forces were an integral part of Operation Enduring Freedom from
    the beginning to the end because the Modernization Program that
    provided a ready, reliable and relevant force.
        The Air National Guard Modernization Program directly supports
    homeland security, most obviously through the combat air patrols flown
    during Operation Noble Eagle. Well versed in the air sovereignty
    mission, the Air National Guard responded within minutes to the attack
    on the World Trade Center, and were immediately patrolling the airspace
    across the United States. Many American citizens expressed comfort at
    seeing armed fighter aircraft flying above them while unanimously
    stating they never thought they would live to see the day American
    military air power would be used in combat operations so close to home.
    These continuing operations since September 11th, 2001 highlight the
    atrophy of the command and control systems associated with our Air
    Defense network due to decades of neglect. As Northern Command
    clarifies the air sovereignty mission, this modernization program will
    be crucial to ensuring the evolving mission needs correspond with the
    capability of the assigned forces and that any required improvements
    are adequately resourced.
        Besides Operation Noble Eagle, the enhanced defense of the airspace
    above the United States, the Air National Guard supports Operation
    Enduring Freedom, the global counter-terrorism campaign. We also
    continue to support other on-going operations through the Air and Space
    Expeditionary Force commitments. These commitments include regular
    deployments to Operation Southern Watch, Operation Northern Watch, and
    the air defense alert commitment in Iceland. The domestic missions
    include continued counter-drug flights, fire fighting missions,
    disaster relief airlifts, and civilian rescue missions.
        The key to transforming Air National Guard assets to the future
    force structure is ensuring that systems are ready, reliable, and
    relevant. This program begins with a national conference of war
    fighters from all of the major weapon systems. Given the missions they
    expect to fight over the next ten years, the war fighters then outline
    what is needed to keep their platforms relevant. From these requests,
    the Air National Guard reviews the Air Force modernization program,
    calculates any resulting shortages, and finds a way to obtain at least
    an equivalent capability so the Air National Guard can bring a relevant
    capability to the mission. As OPSTEMPO increases and contingencies
    multiply, there is an increasing focus on short-term capabilities,
    restricting funding available for long-term investment. The
    Modernization Program is a comprehensive effort affecting all aspects
    of the Air National Guard.
        One of the premier accomplishments in the past year is the very
    short-term identification, development and fielding of the Transparent
    Multi-Platform Gateway integrated into the Joint Range Extension
    gateway providing interoperability and connectivity between the
    Situation Awareness Data Link and Enhanced Position Reporting System
    network and Link 16. The Modernization Program funded the groundwork
    required for this capability. By leveraging the on-going Air Force
    Joint Ranger Extension program, the Block 25/30/32 F-16s were
    successfully networked into the command centers, providing a major
    increase in theater-wide situational awareness. One system is already
    in operation overseas while follow-on systems are now being acquired to
    ensure increased flexibility. Additionally, the North American Air
    Defense Contingency Suite was fielded giving North American Air Defense
    Command the ability to track targets within the United States and
    integrate the Federal Aviation Administration tracks into the military
    transponder network in support of Operation Noble Eagle.
        The A-10 continued its role as the venerable attack aircraft
    supporting operations from both Kuwait and Bagram AB, Afghanistan. The
    key modernization program for this aircraft is called Precision
    Engagement. Precision Engagement will ensure the A-10's continued
    relevance on tomorrow's battlefields. This cost-efficient program will
    transform the current A-10 cockpit into a 21st century cockpit, greatly
    reducing pilot workload and providing additional combat capability in
    the form of precision guided munitions. Associated with Precision
    Engagement was a watershed decision to install the new Joint Tactical
    Radio System on the A-10 making it the first aircraft to be equipped
    with this future data link and communication suite. During the past
    year, the A-10 experienced an aircraft modification to improve the
    personal locator system and consolidate countermeasures equipment.
    Other modernization efforts include further research into an adequate,
    engine replacement, an AN/ALR 69 Radar Warning Receiver antenna
    replacement, and continued COMET infrared countermeasures pod testing.
        During the last year, the Air National Guard F-16's provided
    crucial combat capabilities in both Operation Noble Eagle and Operation
    Enduring Freedom using Litening targeting pods for precision-guided
    munitions funded by the Modernization Program. The Commercial Central
    Interface Unit, and the AN/ALR-69 Radar Warning Receiver Antenna
    Optimization kits, are all part of our modernization effort over the
    past year. Initial funding for the Advanced Identify/Friend/Foe upgrade
    was secured along with funding for 25 more engine upgrade kits for our
    F-16 Block 42 aircraft. The Theater Airborne Reconnaissance System
    continued its spiral development and Night Vision Imaging System
    lighting for the A and B models to support Operation Noble Eagle was
    installed.
        The HC-130 began installation of the Forward Looking Infrared
    system. Also, installation of aircraft night vision imaging systems and
    acquisition of rapid onload/offload ``canary ramps'' for austere
    locations increase our capability to provide critical combat support
    day or night.
        The HH-60 program started integration of the new M3M .50 caliber
    defensive weapon, installed an improved insertion extraction system for
    deploying personnel and bought skis for the Alaska aircraft to
    facilitate Arctic operations. The Pararescue/Special Tactics program
    replaced personal equipment for the pararescue jumpers and combat
    controllers with state-of-the-art weapons and technologies.
        The Operational Support Aircraft Modernization Program leased two
    737 Boeing Business Jet aircraft and secured funding for a C-40C in
    fiscal year 2004. The existing Boeing Business Jets will also get
    upgraded to the C-40C configuration as part of the lease program.
        Three new C-130 Js will be delivered in fiscal year 2004. These
    aircraft will be a welcome addition to our tactical airlift inventory
    as we move toward an Initial Operational Capability milestone.
        The modernization of the Air National Guard training and simulation
    systems includes partial fielding of the Full Combat Mission Trainer
    for our A-10 units. Half of these units have received the advanced
    trainer system and additional funds are required to complete the
    beddown at the remaining units. The F-16 Block 30 distributed mission
    training capable flight simulators are in engineering development while
    funding was secured for two F-15 advanced flight simulators at our
    flying training unit at Kingsley Field, Oregon. The Iowa Air National
    Guard's 132nd Fighter Wing has been officially designated as the site
    of the ANG's Distributed Training Operations Center making it a major
    hub of Air Force-wide distributed training. The ANG's four Combat
    Readiness Training Centers and fourteen Ranges are ideal assets for the
    Joint National Training Capability. The increased use of Precision
    Guided and Stand Off weapons will drive changes in the airspace and
    range requirements to properly and safely train. Evolving training
    requirements, such as ``lights out'' operations in special use
    airspace, create unique challenges for operating in the National
    Airspace System. The potential contentiousness and length of time it
    can take to establish new or modified airspace makes it essential to
    identify requirements as early as possible.
        The modernization of the F-15 included the initial acquisition of
    the BOL Infrared countermeasures improvements system, continued
    installation of the Multi-functional Information Distribution System
    Fighter Data Link, and the purchase of the first 25 engine upgrade
    kits.
        The C-130 modernization program purchased more aircraft armor; and
    continued acquisition of the AN/APN-241 Low Power Color Radar, the
    installation of the Night Vision Imaging System, the Air National
    Guard-driven development of Scathe View to include various
    technological spin-offs having application in a myriad of civilian and
    military efforts; and supported Air Force's development of the AN/AAQ-
    24 (V) Large Aircraft Infrared Countermeasures system. We also
    completed final design review and testing of the new advanced Airborne
    Fire Fighting System to bolster the fire and protection capabilities
    nationwide. The Air National Guard is supporting a Joint Program, along
    with the Navy and Marine Corps, to test and qualify an Electronic
    Propeller Control System for the C-130.
        The Air National Guard fully supports the Air Force plan to acquire
    the new 767 tanker aircraft and the plan to move more KC-135Rs to the
    Air National Guard.
        Modernization of complex weapons systems is a continuous process,
    not a goal. Traditionally the Air National Guard gets legacy systems
    through the equipment that is trickled-down from the active duty
    forces. With the exception of the Block 50 F-16s and the C-17, these
    legacy systems do not have the funding to upgrade their capabilities to
    make them equivalent to the active Air Force. The Air National Guard
    requires an aggressive program to meet the combat capabilities required
    for the missions assigned to the Air and Space Expeditionary Forces
    built, in part, with Air National Guard forces. To keep the
    Modernization Program focused and to maximize combat capability per
    dollar, we use the Combat Quadrangle to summate the fundamental combat
    capabilities required to meet assigned missions. The Combat Quadrangle,
    derived from the Air Force's core competencies, consists of enhanced
    survivability, 24-hour operations, combat identification, and precision
    strike. The Air National Guard includes all aircraft, ground command
    and control systems, training and simulation systems in the
    modernization effort. The requirements definitions required to focus
    this effort must be grounded in clearly defined combat capabilities and
    missions. The foundation of future efforts is relevance with
    reliability and readiness. It is increasingly difficult to keep the Air
    National Guard legacy systems relevant given the transformation of the
    Air Force to better, more effective technologies. Systems funding will
    be a continuous and serious challenge since funding levels continue to
    fall short of mission requirements. Over the foreseeable future, the
    military services, specifically the Air Force, will be stretched to
    simultaneously fund current operations, modernization and future
    Research and Development projects.
        The Air National Guard Modernization Program is the key to fielding
    and supporting a relevant combat capability to meet any emerging
    challenges for the next 10-15 years. We must sustain an open and honest
    dialogue from the warfighter through to the President and the Congress
    in order to maximize the investment of precious tax dollars. The
    Modernization Program works as seen in the examples above. The Air
    National Guard Modernization Program will continue to provide success
    stories as the United States Air Force transforms to meet the future.
        We in the Air National Guard are proud to serve this great nation
    as Citizen-Airmen. Building the strongest possible Air National Guard
    is our most important objective. Our people, readiness modernization
    programs and infrastructure supported through your Congressional
    actions are necessary to help maintain the Air National Guard as the
    best reserve force. With your continued support, we are confident that
    the men and women of the Air National Guard will meet the challenges
    set before us.
    Joint Programs

                National Guard State Partnership Program
        The National Guard State Partnership program is constituted to
    encourage and build long-standing institutional affiliations and
    interpersonal relationships with those nations that are striving to
    establish democratic military organizations. Our citizen-soldiers
    provide military leaders in partner nations an opportunity to witness
    our highly trained and capable soldiers at work. National Guard members
    who serve as role models become a compelling argument for the ideals of
    democracy, professionalism, and deference to civilian authority. Our
    personnel gain valuable experience interfacing with people of diverse
    cultures, as they will encounter when activated and deployed overseas
    during a federal mission. This also provides the United States with the
    opportunity to demonstrate the necessity and economy of reserve
    component personnel who are trained and equipped to respond immediately
    to civil or military emergency. The program also supports homeland
    security by helping to develop dependable and collaborative partners
    for the United States. It supports Secretary of Defense Rumsfeld's New
    Concepts of Global Engagement and has the capacity to link states with
    partner nations for the purpose of improving bilateral relations.
        The National Guard State's Partnership Program supports missions in
    which troops prepare to depart their partnership countries for
    cooperative events, mobilization skills are refined, and National Guard
    personnel interface with diverse cultures, helping to prepare them for
    active deployment overseas during potentially hostile activities. The
    State partners actively participate in a host of engagement activities
    ranging from bilateral familiarization and training events, exercises,
    fellowship-style internships, and civic leader visits.

                National Guard Family Programs
        As the role of the National Guard becomes focused on the dual
    missions of Global War on Terrorism and homeland security, units will
    continue to maintain a high level of readiness for overseas and
    homeland operations. An integral part of service member readiness is
    family readiness. The National Guard Family Program Office was
    established to provide policy, guidance, and resources for developing
    the Family Program quality of life and family readiness infrastructure
    to the Adjutants General of all 54 States and Territories, the Chief of
    the National Guard Bureau, and the Directors of the Army and Air
    National Guard.
        The National Guard Family Program office implements Department of
    Defense directive to ensure service members and their families are
    provided a quality of life that reflects the high standards and pride
    of the Nation they defend, and that this policy be achieved by working
    in partnership with Department of Defense personnel and their families,
    recognizing their role in the readiness of the Total Force.
        If family members are not prepared for deployments, a service
    member's readiness, morale, and eventually retention are affected.
    Family programs are currently in place to assist families during the
    challenging stages of deployment: pre-mobilization, mobilization, and
    reunion. The Family Program office provides support to the family
    program coordinators through information, training, volunteer
    management, workshops, newsletters, family events, youth development
    programs, and other such programs. The primary challenge lies in
    awareness and communication. Consistent feedback indicates many family
    members are unaware of the various resources available to them. The
    goal is to increase the level of awareness and participation in
    existing family resources to improve overall mission readiness and
    retention.

                National Guard Youth ChalleNGe Program
        The award-winning National Guard Youth ChalleNGe program is a
    community-based program that leads, trains and mentors at-risk youth at
    31 sites to become productive citizens in America's future. As the
    second largest mentoring program in the nation, the ChalleNGe program
    is coeducational and consists of a five-month ``quasi-military''
    residential phase and a one-year post-residential phase. Corps members
    must be volunteers, between 16 and 18 years of age, not in trouble with
    the law, drug free, unemployed, and high school dropouts.
        As a national model, since its inception, the 31 National Guard
    Youth ChalleNGe program sites have graduated over 42,000 young men and
    women who leave the program equipped with the values, skills, education
    and self-discipline necessary to succeed as adults in society.
    Significantly, although many ChalleNGe candidates are from at-risk
    populations, over two-thirds of ChalleNGe graduates have attained
    either a General Equivalency Diploma or high school diploma.
    Furthermore, approximately 30 percent of all graduates choose to enter
    military service upon graduation. Although the program graduation rate
    is above 90 percent, and the general equivalency diploma attainment is
    over 66 percent, the National Guard seeks to increase output in both of
    these areas.
        The National Guard is ``Hometown America'' with deep roots in every
    community. Its strong community ties makes the National Guard a highly
    visible and effective entity in many towns and communities across the
    United States. Involved are men and women who, in their civilian lives,
    are influential across the spectrum of business, education, and
    government. National Guard units across the country have traditionally
    been involved in youth programs designed to help young people become
    positive and productive members of their community.

                Homeland Security
        As we begin the 21st century, homeland security is the most
    important issue facing the United States. For the first time in almost
    200 years, the continental United States was attacked with the
    prospects of future attacks high. To better defend the United States,
    the government has mobilized its resources and has undertaken a major
    reorganization to more effectively meet the challenge. While the
    National Guard performed superbly in response to the attacks of
    September 11th, 2001, we have begun to make changes to better respond
    to future attacks.
        The National Guard has a significant role in homeland security.
    Just as the active force is the first to deploy in support of U.S.
    operations abroad, the National Guard is the first military force to
    deploy in support of most homeland security requirements. The National
    Guard is a unique dual status, citizen-soldier force that can be
    activated by the Governor in support of state emergencies and also can
    be federalized to support national contingency requirements. The
    Governor can employ the National Guard under state active duty (state
    commanded, state financed) and Title 32 (state commanded, federally
    financed), or the National Guard can be federalized under the
    provisions of Title 10 (federally commanded, federally financed). Its
    dual state-federal status makes the National Guard a cost effective,
    flexible force that can be deployed in a variety of circumstances. Like
    the Guard units in the states, the National Guard Bureau (a Title 10
    entity) has dual roles. We communicate policy, requirements and
    situational awareness information in both directions through the
    federal-to-state channel. Further, because most of the state Adjutants
    General are also the emergency manager for their state, and because
    many are also their state's Homeland Security Director, we are involved
    in intergovernmental issues, as well as federal military and
    interagency ones. This dual-mission multi-faceted capability of the
    Guard was demonstrated in the aftermath of September 11th.
        Immediately after the attack on September 11th, the National Guard
    responded. National Guard air assets took to the skies to secure our
    airspace and other forces were quickly sent to the World Trade Center
    and the Pentagon to assist with security and recovery efforts. Soon
    after, the President asked the Governors to secure critical U.S.
    airports and they responded by deploying Guardsmen in Title 32 status
    at airports in a matter of hours. In addition, many of the states'
    governors ordered their Guardsmen, in State Active Duty Status, to
    secure critical infrastructure facilities, such as bridges, nuclear
    power plants, and federal buildings, throughout their states and many
    of those missions continue today. Other National Guard units and
    personnel were activated under Title 10 to augment security at the U.S.
    borders. Their mission was to support the Department of Justice and the
    Department of Treasury in ensuring that commerce continued to flow
    while our vital interests were protected. These homeland security
    missions and others were conducted, and some have continued to be
    conducted, while Army and Air National Guard forces have been deployed
    for peacekeeping and stabilization actions in the Balkans and
    elsewhere, and as a critical part of the war in Southwest Asia. The
    Guard has also been mobilized to perform force protection missions in
    the United States in support of our war efforts. As expected, the
    National Guard has conducted and continues to conduct all missions in
    an exceptional manner.
        As we move forward, it is apparent that the National Guard will be
    increasingly involved in all aspects of the homeland security mission.
    The areas we focus on include:
      --Combating terrorism
      --Military Assistance to Civilian Authorities
      --Responding to chemical, biological, radiological, nuclear and high-
            yield explosives incidents
      --Missile Defense
      --Critical Infrastructure Protection
      --Information Operations
      --Force Protection
      --Protecting the Nation's Sovereignty.
        In addition to these mission areas, the National Guard Bureau's
    recently-established Office of Homeland Defense will facilitate
    military support to civil authorities by the Army and Air National
    Guard. Military support to civil authorities includes domestic disaster
    relief operations that occur during fires, hurricanes, floods, and
    earthquakes. Our support also includes counter-drug operations and
    incident management assistance, such as would occur after a terrorist
    event employing a weapon of mass destruction. The National Guard
    Bureau, in addition to our statutory role as the channel of
    communication between the Army and the Air Force and the National Guard
    of the several states, has coordinated with the Combatant Commander of
    U.S. Northern Command to perform that same role. As part of this, the
    National Guard Bureau provides situational awareness on state-commanded
    National Guard operations to the Commander of U.S. Northern Command to
    augment his ability to effectively plan for and manage the overall role
    of his command.
        The fight against terrorism and the protection of our homeland is
    expected to be a protracted endeavor much like the Cold War. To that
    end, many policy experts, reports, and studies have advocated an
    expanded role for the National Guard in homeland security. While some
    have suggested that the National Guard should be reoriented, re-
    equipped, and retrained for the homeland security mission, the reality
    is that the National Guard is an integral part of the Army and Air
    Force Total Force mission capability and that role is vital to the
    survival of the nation. In the past the resources, personnel, equipment
    and training provided for the war-time mission was sufficient to allow
    the National Guard to also fulfill its local and state support role by
    responding to local disasters and military support to civilian
    authorities. Times have changed, however. The threat posed by well-
    financed, sophisticated and determined international terrorist groups
    has raised the bar as to what the National Guard must be able to do.
    While the National Guard will continue to maintain a high state of
    readiness for overseas operations, it must also better prepare itself
    to respond to the homeland security mission within the United States,
    the District of Columbia, Puerto Rico, and the U.S. possessions and
    territories. To that end, we are working hard to find ways to meet the
    increased demands of the homeland security mission while still
    maintaining our ability to execute our Total Force requirements.
        The increased threat and global proliferation of ballistic missiles
    poses a significant threat to the United States, our deployed forces,
    and our allies. In response to this threat, in December 2002 the
    Department of Defense directed the deployment of an effective missile
    defense system capable of defending the territory of the United States
    against limited ballistic missile attack. The Army National Guard
    accepted the mission to man the Army portion of the Ground-based
    Midcourse Defense (GMD) system, including both operational and security
    force elements. The GMD segment is the cornerstone of the Ballistic
    Missile Defense System Test Bed, and will have an Initial Defensive
    Operations (ID)) capability by September 2004. This high-visibility
    program, which will provide protection against limited ballistic
    missile attack, is an example of the evolving role of the National
    Guard in Homeland Defense.
        Over the next year, and as much longer as it takes, the National
    Guard Bureau will take the lead in improving the posture of the
    National Guard for its homeland security mission. The National Guard
    Bureau will work with the States as they perform a mission area
    analysis to determine what additional capabilities are needed to
    accomplish the homeland security mission and will utilize a systematic
    programmed approach designed to build our homeland security posture for
    the future. These are the features of that program:
      --Consolidate the National Guard homeland security requirements of
            the 50 States, territories and the District of Columbia.
            (States know the actual operational requirements better than
            anyone.)
      --Validate these requirements at the National Guard Bureau level and
            craft them into packages for submission to the appropriate
            Combatant Commanders, to the Army and Air Force as requirements
            that can be built into programs for funding, and to the
            Assistant Secretary of Defense for Homeland Security.
      --Use our developed requirements to advise and educate agencies,
            offices, commands, and leaders that have an interest in
            supporting homeland security.
      --From valid requirements we will build funded programs that ensure
            the success of homeland security by using a systematic long-
            term approach. We believe that a long-term approach is needed
            to ensure a sustained, comprehensive protective posture for our
            nation.
        The road ahead also includes a transformation of National Guard
    Counter Drug efforts into an integrated Counter Narcotics/Homeland
    Defense Counter Terrorism program. These mission areas employ many of
    the same tactics, techniques and procedures, as well as equipment,
    training and skills. Therefore, a great deal of cross-skill transfer
    will begin immediately once the change is effected, and a quick,
    effective, seamless transition between and across mission sets will
    allow Guard troops to readily take their places on the front lines of
    the war against terrorism at home and abroad.
        Our government has initiated a massive reorganization to better
    respond to the homeland security challenge. Northern Command has been
    activated, the new Department of Homeland Security is in the process of
    being organized, and the Department of Defense has created a position
    of Assistant Secretary of Defense for Homeland Defense. The National
    Guard Bureau will work with the Assistant Secretary for Homeland
    Defense and Northern Command to insure that National Guard missions and
    capabilities are fully integrated into the overall plan for homeland
    security. Specifically, it will assist Northern Command as that command
    moves from an initial operating capability to a full operating
    capability by:
      --Providing situational awareness of activities within the 50 states
            and territories.
      --Integrating and synchronizing existing plans.
      --Coordinating National Guard resource and training requirements.
      --Facilitating communication between Northern Command and the State
            Area Commands.
        Northern Command will undergo a critical year as it transitions
    from an initial operating capability to a full operating capability by
    October 2003. During the coming year, the National Guard will be
    providing personnel to Northern Command in order to fill critical
    personnel requirements. Additionally, the National Guard is working to
    develop situational awareness for Northern Command as to the activities
    that affect homeland security within the 50 states and territories.
    Although most activities of incident management at the federal level
    will fall under the control of the Department of Homeland Security, a
    constant monitoring of state-level activities and interests is needed
    by Northern Command in order to support the lead federal agency when
    needed. The National Guard, through the National Guard Bureau, is the
    natural conduit for DOD elements to the states and territories on
    military-related matters. The majority of the states use the Adjutant
    General of that state as the state emergency manager. The National
    Guard is intimately involved in all activities of homeland security at
    the state level. The National Guard Bureau is actively pursuing
    discussions and several initiatives within the Department of Defense
    which will likely result in better exploitation by all segments of the
    Department of Defense of the Bureau's capability as a two-way channel
    of communication to the National Guard of the several states. We are
    excited about assisting Northern Command in its emerging role and look
    forward to facilitating federally funded support of state activities.
        In addition, the National Guard Bureau will work, through the
    Assistant Secretary of Defense for Homeland Defense, with the new
    Department of Homeland Security to ensure that the National Guard's
    capabilities and requirements are fully integrated in the overall
    homeland security plan. The new Department of Homeland Security will be
    greatly assisted by the National Guard plans that are already in effect
    in all of the states and territories. Since the vast majority of
    homeland security activities come under state and municipal or other
    local control, the National Guard planning and activities under State
    Active Duty (state controlled and funded) and under Title 32 (state
    controlled, federally funded) will be an integral part of the processes
    being crafted by the new Department. National Guard Training Centers
    are existing assets that can be economically expanded to support
    realistic training and exercises with first responders, law enforcement
    agencies, and all levels of government integrating National Guard
    capabilities in homeland security roles. Several states have initiated
    pilot programs for this effort with federal support at the request of
    Congress. The National Guard is taking an open supportive approach to
    intradepartmental, interagency and intergovernmental cooperation for
    the defense of our Homeland. We each must succeed for all to succeed.
        The Army National Guard and the Air National Guard bring several
    inherent strengths to the homeland security environment. Aside from a
    capable, trained and organized force, there is also an in-place
    information technology infrastructure that has the potential to provide
    an efficient, reliable, interoperable, and user-friendly channel of
    communications for the Office of the Secretary of Defense and Northern
    Command through the National Guard Bureau to the Army and Air Guard.
    The present information technology infrastructure provides a robust
    reach-down capability to Army and Air Guard units in the states.
    However, to meet the emerging needs of homeland security missions,
    enhancements in network reliability and security will have to be
    incorporated. Additionally, the new requirements pose new challenges in
    areas such as wireless technology that will allow direct command,
    control and communications with on-site responders. The National Guard
    Bureau is uniquely positioned to provide this coordinated, controlled
    capability, consistent with the statutory requirements of Title 10.
        The National Guard supports any overseas fight primarily by
    supporting Army and Air Force initiatives. Most programmatic and force
    structure actions, therefore, are Service specific, supporting either
    the Air War or the Ground War through the respective Services. Examples
    of initiatives underway in this area include the Army National Guard
    Restructuring Initiative, an initiative to replace a portion of the
    existing heavy and light combat structure with Mobile Light Brigades
    prepared for full spectrum operations in support of the new defense
    strategy This will meet the Army's evolving needs for expeditionary
    warfare, as well as giving us more Guard forces well-suited to homeland
    security tasks in support of U.S. Northern Command and U.S. Pacific
    Command. In the Air National Guard, a Transformation Initiative will
    result in capabilities-based forces with improved Intelligence,
    Surveillance and Reconnaissance, Information Technology, Medical
    Service and operational aircraft with the ability to make strong
    contributions to both aspects of the Guard's dual federal-state
    mission. As we render homeland security support to the Lead Federal
    Agencies, however, we must change our approach and support them as a
    Joint Force--not two separate Services. The lead agencies need and want
    to deal with a single entity within the National Guard and this year we
    are prepared to provide that in a seamless manner. A Joint Staff
    approach out of the National Guard Bureau will present a single flow of
    information and will strive for a single funding line to support
    operations. In addition, the State Area Command will become a true
    joint state headquarters with enhanced capabilities. In this way, our
    team is coming together to support our communities and homeland
    institutions with expanded capabilities and improved linkages to
    national command and control mechanisms. In addition, the National
    Guard will continue to participate in the planning and execution of
    interagency exercises with local, state and federal agencies thereby
    building relationships that may prove useful during future contingency
    operations.
        The ability of the National Guard Bureau to maintain awareness,
    conduct coordination, provide guidance and resources to the National
    Guard must be strong to meet the growing needs of homeland security. To
    that end, the National Guard Bureau's Office of Homeland Defense has
    evolved as the focal point for that effort. It has assumed
    responsibility for these initiatives. To further ensure continuity and
    centralized management of all homeland security activities, our Office
    of Homeland Defense recently incorporated the civil support function
    under its control. The NGB Office of Homeland Defense will work with
    the States to determine their requirements to accomplish the homeland
    security mission. It will be this entity within the National Guard
    Bureau that will coordinate with the States, The Joint Staff, U.S.
    Northern Command, U.S. Pacific Command, and, through the Office of the
    Secretary of Defense, with other federal government agencies to manage
    all homeland security efforts.
        For the past two years the National Guard has had a very tangible
    asset to offer in support of the civilian and emergency first responder
    communities in the area of homeland security--its Civil Support Teams.
    The Guard has continued to strengthen the Civil Support Program, under
    which these teams fall. The teams provide rapid support to local, state
    and federal authorities in dealing with the consequences of chemical,
    biological, radiological, nuclear or high yield explosive events. Of
    the 32 Civil Support Teams that have been established, the Secretary of
    Defense has operationally certified all 32 teams. An additional 23
    teams have been authorized by the Congress, and DOD is developing a
    plan to field them as expeditiously as possible.
        Several of the certified teams were integrally involved in response
    efforts to the September 11th terrorist attack and to the anthrax
    attacks and hoaxes that were perpetrated throughout the nation in the
    ensuing months. The Civil Support Teams have been increasingly
    integrated into the planning, training and operations at every level of
    emergency response ever since. In fact, during the year following the
    September 11th attacks, the 27 certified teams collectively performed
    nearly 800 missions at the request of the agencies they support.
        These teams provide state and local authorities specialized
    expertise and technical assistance to the incident commander to:
      --Identify chemical, biological, radiological, nuclear or high yield
            explosive substances or agents.
      --Assess the situation; determine the type of weapon used and the
            likely consequences.
      --Advise the incident commander on potential courses of action.
      --Assist the local incident commander's response strategy with
            cutting edge technology and expertise.
        Operationally, these teams are under the command and control of the
    governors through their respective Adjutants General in a USC Title 32
    status. Should it be required, a team can be federalized and called to
    serve in a USC Title 10 capacity. The National Guard Bureau provides
    logistical support, standardized operational procedures and operational
    coordination to facilitate the employment of these teams and to provide
    depth and backup capability to states currently without a full-time
    Civil Support Team.
        In order to be the best resource possible to those entities they
    assist, it is crucial that the teams continue to be interoperable with
    all of the federal, state and local organizations with whom they work.
    This means that they must continue to be equipped with and trained on
    the state of the art technologies, requiring that they remain a high
    priority for resourcing at all levels within the Department of Defense.
        Issues of importance that are being addressed at many levels in
    support of improving this program include the following: coordination
    with Transportation Command and other commands to formalize the
    processes of requesting airlift for these units. This is required to
    minimize response times to remote and/or hard to access incident sites
    and thereby optimizing their utility to incident commanders. Intensive
    recruiting, special pay and acquisition issues are being worked by
    staff at the National Guard Bureau's Homeland Defense Office to address
    some of the more challenging issues the program faces in remaining a
    value-added capability to their civilian counterparts.
        Our adversaries will not rest--``the clock is ticking''--so our
    preparation must be immediate, exact and effective. The National Guard
    gives this nation a tremendous capability in that its members live,
    work and play within the communities they defend. Many of them are
    first responders--the Guardsmen know their home turf. The people trust
    their National Guard and always feel comforted by their presence during
    a crisis. During the next year, we will take that trust and solid
    experience to build the National Guard into a proactive,
    technologically superior team that is trained and ready to deal with
    any and all threats to our homeland. To further that end, the National
    Guard will continue to cooperate with all local, state and federal
    agencies in an effort to improve response capabilities. In its dual
    State and Federal roles, the National Guard will continue to support
    other government agencies when asked, and will take the lead, when
    appropriate, in the defense of our homeland.

                The National Guard Drug Interdiction and Counterdrug
                        Activities
        The National Guard Drug Interdiction and Counterdrug Activities
    provides airborne support to the domestic counterdrug effort through
    the Counterdrug Reconnaissance and Interdiction Detachment Program and
    the Counterdrug Program. These special programs employ specially
    modified helicopters and C-26 aircraft to detect and track counterdrug
    targets identified by local, state or federal drug law enforcement
    agencies. Currently eleven states have counterdrug C-26 units and 37
    states have the interdiction units.
        The National Guard supports counterdrug operations by providing
    support that helps law enforcement to stop illegal drugs from being
    imported, manufactured or distributed; and by supporting community-
    based drug demand reduction programs. There are six general counterdrug
    mission categories under current program regulations: program
    management; technical support; general support; counterdrug-related
    training; reconnaissance/observation; and demand reduction support.
        The National Guard is a partner in a variety of demand reduction
    activities ranging from educational programs in schools, summer camps
    and with community anti-drug coalitions. The National Guard operates
    four counterdrug training academies across the country that specialize
    in supply and demand reduction curriculum. The courses are available to
    civilian and military personnel at no cost.

                Information Technology Infrastructure
        The National Guard has a dual role, the National Guard of the
    United States (federal mission) and the National Guard of the Several
    States (state mission). Under Title 10 of the United States Code, the
    purpose of the National Guard Bureau is to be the channel of
    communications on all matters pertaining to the National Guard, the
    Army National Guard of the United States and the Air National Guard of
    the United States and the Departments of the Army and Air Force. This
    is a core competency of the Bureau, and its success is dependent on a
    strong information technology infrastructure under the management of
    the Chief of the National Guard Bureau. With the creation of the
    Department of Homeland Security, there is a potential requirement for
    the National Guard to integrate its communication network with that
    agency. The National Guard must be empowered to plan, program, and
    budget its information management program. Additionally, it should
    control, manage, and operate an information technology infrastructure
    that meets the requirements of both the federal mission of the National
    Guard of the United States, and the state missions that include
    homeland security.
        The National Guard network should provide an efficient, reliable,
    interoperable, and user-friendly information technology channel of
    communications for the Department of the Army, Department of the Air
    Force, U.S. Northern Command, Department of Homeland Security, and
    others. There is also a need for a channel of communications to be
    established by the states through the National Guard Bureau with the
    Department of Homeland Security. This is a proper role for the Bureau,
    and the Bureau's mission should be expanded to include that it serve as
    a channel of communications to the Department of Homeland Security. In
    this new role, the Chief Information Office would manage the
    information technology requirements for the homeland security mission.
    The Chief Information Office would also provide leadership for
    establishing National Guard information technology strategy, policy,
    standards, and infrastructure to support National Guard forces
    performing their federal and state missions. In addition to federal
    funds for information technology to support the National Guard of the
    United States, the National Guard Bureau Chief would plan and
    administer federal funds that are appropriated for information
    technology support for states under the homeland security mission. The
    Chief Information Office would work with the Army, Air Force, U.S.
    Northern Command, and Department of Homeland Security Chief Information
    Offices to assure that our information technology network is integrated
    and standardized with each other as well as other partners.

        Senator Stevens. General, if I may, before hearing from
    General Schultz and General James I'd like to yield to Senator
    Inouye for any questions he might have. He's going to leave
    here at 10:45 to go to an important meeting, and I thought
    perhaps he might have some comments or questions to make before
    he left. Sir.
        Senator Inouye. General Blum, the strain on Reserve forces
    may also depend on the skills needed for duty in Iraq compared
    to the number of active duty forces with these skills. What are
    the top skill groups for those who have been mobilized to Iraq
    thus far?

                                FORCE PROTECTION

        And the other question I have is that I understand that the
    Guard will be providing personnel to help the Air Force
    increase force protection; while in the fiscal year 2004
    budget, the Army itself will be experiencing a 53 percent
    increase in force protection requirements. Do you have enough
    to take care of your force protection, in addition to the Air
    Force?
        General Blum. Sir, let me answer those questions in turn if
    I may. General Schultz, you can come in there any time, and
    General James, you can come in any time you think it would be
    helpful.
        Sir, the skill sets, if I understood the question
    correctly, you wanted to know what skill sets were required in
    Iraq. It is across the full spectrum, everything from special
    operations, the kind of innovation that you just saw up on the
    ninth floor and the unconventional approach to dealing with the
    combat in Iraq. We have significant special operations forces
    over there, both in Special Forces psychological operations as
    the United States Army Reserve and Civil Affairs, but in
    addition, we have infantry on the ground over there, combat
    support units and combat service supports of every stripe and
    color, so there's nothing specific. It is full spectrum across-
    the-board combat formations that were called upon by the
    combatant commander that we provided from the National Guard.
        Back here at home, it's a little bit different. They've
    mostly been security forces for critical infrastructure
    protection, and the amazing work that the civil support teams
    were able to provide almost on a daily basis to keep the
    populations calm, that we were not under an attack by any
    chemical or biological agent from a foreign nation.
        The very fact that they were able to test and sample and
    verify that these samplings were not something lethal or
    threatening to our population has helped, a very calming
    influence, and I think the soldiers and airmen that we have had
    doing our critical infrastructure protection in nearly every
    State in this Nation has served as a significant deterrent, and
    have probably prevented any disruption of our mobilization
    process, our ability to project forces abroad, and to attack
    our citizenry or our ability to provide good Government here at
    home.
        I hope that addresses your question. If not, please press
    me a bit. Roger.
        General Schultz. Senator, if I could help with a piece of
    that answer from the Army Guard point of view. We have 24,000
    soldiers from the Army Guard in Central Command duty today.
    Primary duty is going to be, obviously, in support-related
    fields, military police (MP), perhaps chemical, perhaps
    medical, perhaps engineer. That's kind of the skills that are
    going to be required more so, even now, as the mission changes
    in theater.
        We're working today with the leadership in the Central
    Command land component command to figure out what kind of
    units, how long they need to stay, and do we have the right
    mix.
        Now, specifically to your point, we're short military
    police in the Army, in the Guard, and we're going through the
    acquisition process of acquiring more. We can use more military
    police here in the homeland as well, so today in the homeland
    we have over 16,000 soldiers securing critical facilities;
    8,100 of those members are securing Air Force bases, and the
    money, in the case of the Army Guard, is coming by way of the
    Air Force, so that's an Air Force budget line item. We think
    that will be a 2-year mission, so we're in the first year of
    that mission, standing by for a second.
        So security police in the Air Force, military police in the
    Army. We're short those kinds of forces today.
        Senator Inouye. What are you doing about that?
        General Schultz. We're actually going through the process
    of finding units, turning in units, buying more military police
    units, if I could explain it that way. We're going through the
    acquisition process right now, today, acquiring more MP units
    in the Guard.
        Senator Inouye. Thank you. Thank you very much, Mr.
    Chairman.
        Senator Stevens. Thank you. General Schultz.
        General Schultz. Thanks, Mr. Chairman, the distinguished
    committee members. We say thanks for allowing us to be here
    today, and for your ongoing support for our first priority, our
    soldiers.
        I would like, Mr. Chairman, to introduce Command Sergeant
    Major Frank Lever. He's senior enlisted soldier in the Army
    National Guard. He's the person, with me, that has the honor of
    looking after our members across this Nation.
        Mr. Chairman, our members have met and satisfied every
    mission asked, from the homeland through the deployed theaters,
    and it's an accomplishment that we are most proud of. If you
    think about the Guard today, we have over 78,000 soldiers
    deployed, and obviously we talk about the strength of who we
    are, our first priority would be the members in our formations.
    Now, today in a special way that also means our families.
        And then as you think about our mission since September 11,
    2001, just a couple of years ago, we obviously have had
    tremendous support from our employers, and it's that team that
    makes what we're doing today possible.
        Mr. Chairman, we say to you, for your ongoing support,
    thanks.
        Senator Stevens. General James.
        General James. Mr. Chairman, members of the committee, I
    also would like to add my thanks, as my colleagues have, for
    the support of this committee and the opportunity to speak to
    you today on behalf of our Air National Guard.
        Like our Army counterparts, our Air National Guard has been
    very, very busy around the world and here at home. We have
    approximately 22,000 airmen mobilized at this time, with
    another 1,100 volunteers added to that figure. Some have been
    mobilized for almost 2 years. Currently, 55 percent of the Air
    National Guard is performing some type of full-time duty when
    you add in the full-time force.

                             OPERATION NOBLE EAGLE

        In Operation Noble Eagle which is the defense of the
    homeland, an air sovereignty mission was applying 75 percent of
    the fighter force, and half of the tanker sorties this past
    fiscal year.

                           OPERATION ENDURING FREEDOM

        As you have noted, though, the Air National Guard is not a
    stay-at-home force. We, too, have been deployed around the
    globe. As of the end of March, we flew 64 percent of the
    fighter sorties supporting the Aerospace Expeditionary Force
    (AEF), 48 percent of the airlift sorties, and during that same
    time we flew almost one-quarter of both fighter and tanker
    sorties for Operation Enduring Freedom.

                            OPERATION IRAQI FREEDOM

        We've had significant contributions to Operation Iraqi
    Freedom, and to answer part of your question from the air side,
    Senator Inouye, we experienced some high frequency/low density
    specialties in firefighters and also in security forces, but we
    are in fact total force partners with our great reserve
    counterparts and our active duty. The National Guard flew 43
    percent of the fighter sorties, and an amazing 86 percent of
    the tanker sorties in Operation Iraqi Freedom.
        This committee is directly responsible for our ability to
    participate in these operations and do our mission, because you
    have provided the resources for us in areas like targeting pods
    and funds for our miscellaneous National Guard and Reserve
    Equipment Appropriation (NGREA) account. You've helped make us
    a part, a very relevant and important part of the total force,
    and Mr. Chairman and members of the committee, we're very
    grateful for that support.
        In closing, I would just like to say that in the future we
    too are looking to transform. I've developed a concept called
    Vanguard that will enable us to transform the Air National
    Guard into a force of the future. We also are looking forward
    to participating in new weapons systems such as the C-17 and
    the F/A-22, the joint strike fighter, and hopefully the KC-767.
    We do strongly support the lease of this aircraft. It will
    allow us to replace our aging K-135E models with R models, and
    maybe even participate in KC-767 aircraft in some selected
    Guard units.
        Again, thank you for the opportunity.

                       MERGING GUARD AND RESERVE ACCOUNTS

        Senator Stevens. General, we're grateful to you for those
    statements and, as you've said, each of you, this committee has
    been very supportive, but we're getting questions at home now,
    and I wonder if we're getting to the point where we're burning
    the candle at both ends.
        Before we went into Iraq, we already had 50,000 reservists
    called up and mobilized for the global war on terrorism. We
    mobilized more during the war and, as you said, General James,
    some of them have been mobilized for the best part of 2 years
    now. That gets beyond the role of citizen soldier that's there
    in the event of emergency, and I'd like to have your comments
    on where we're going. You add that to the Department's request
    that we merge your accounts into a single account now, and we
    wonder what's happening as far as the future of the identity of
    the Army Guard, the Air Force Guard, and the Reserves as
    separate entities.
        Would you comment on those situations, General Blum?
        General Blum. Yes, Mr. Chairman.
        First, on the identities, the Constitution will guarantee--
    unless we change the Constitution we will not lose the identity
    of the National Guard of the United States because of their
    dual mission status, unique among the other reserve components.
        As far as the operational tempo and the overuse of our
    National Guard citizen soldiers, I think it's a little too
    early to tell just yet on what those trends will bring in the
    long term. Certainly, there are anecdotal episodes or evidences
    that all of us can quote where it is less than a desirable
    condition, where there are great hardships on families and
    significant interruptions, particularly the small businesses,
    when you pull key people out, or key people in a community that
    are responsible for either law enforcement or emergency
    services, but what we have done is set up procedures whereby
    the Adjutants General of each State can make corrections and
    modifications and substitutions so that we don't do something
    that does not pass the common sense test when it's closely
    examined the next day on mobilizing guardsmen.
        The information so far that we've received is relatively
    positive. In spite of this increased use, the propensity to
    serve in these young men and women is extraordinary. Remember,
    they volunteered to serve their Nation. They volunteered to be
    members of the Army and Air National Guard, and they are proud
    to respond when their Nation needs them.
        I think what we need to do now is pay very close attention
    to the process that we follow when we demobilize these young
    men and women and return them back to their civilian jobs and
    their families. That will play an important part. How they do
    that will be very important to whether they make a decision to
    stay with us long term.

                              LIMITS ON DEPLOYMENT

        Senator Stevens. Well, should Congress consider putting a
    limitation on the amount of time that a guardsman, a person in
    the Guard or Reserve can be compelled to serve in any 1 year?
    We have situations where we have all been contacted--I'm
    certain I have--by small business people, by persons who ran
    support facilities for clinics in terms of medical supply
    units, and they have been called up and, as you say, they're
    ready to serve, and they did volunteer, but I'm not sure they
    volunteered to become a regular member of the service to be--
    they are compelled to stay, once they're called up, for as long
    as the Commander-in-Chief wants them to stay, and I think there
    ought to be some sort of a contract with these citizen soldiers
    that they will not be called up more than a certain amount of
    time in any 1 year unless there's a declaration of war.
        And we've gone through a series of situations now in the
    last 20 years where we've had these problems, more than 20
    years, really, without a declaration of war, all the way back
    to Korea, and when you think of the number of people that have
    been called up and their lives have just been completely
    changed, I think it's time for us to take a look at it. It may
    not be this committee.
        But we do have before us, however, the thing that bothers
    me, and that is this concept of the consolidation of personnel
    accounts into a single active personnel appropriations for each
    service. In other words, you won't be getting money for the
    Guard directly. You'll be getting money as part of the Army's
    appropriation and the Air Force appropriation, and eventually
    that will lead to less control for the Commanding General of
    the National Guard.
        I don't think I'm going to embarrass you by asking you what
    you think of that, because you're in uniform and you must
    respond to the direction of the civilian authorities and your
    Departments, but this direction worries me as a Senator, and I
    don't know about others, what they think, but I believe we
    should do everything we can to encourage an enormous number of
    young men and women to join the Guard and Reserve, particularly
    those who have had any service before, and they're Ready
    Reserve. They're really a magnificent force in the total force
    concept, but I think we have offended against some of them now
    and changed their lives and put some of them into bankruptcy,
    and we've got a job to do to try and straighten that out, in my
    opinion.
        I don't know if you want to make any comments about it, as
    I said. It's not right, General. It's not right that someone
    joins the Guard and Reserve and thinks they'll be called up in
    the event of real war, to be called up on a semi-permanent
    basis.
        Have you got any orders yet to release any of these people?
        General Blum. Well, sir, Mr. Chairman, you've thrown a
    couple of questions at me at once here.
        Senator Stevens. Several, yes. I'm sorry about that.
        General Blum. Let me try to sort these out. First, are we
    abusing the soldiers in how often and how long they're called
    up for? Again I say there are anecdotal evidences that each one
    of your constituents can articulate where that was probably the
    case.
        What I would argue for here, or urge the committee to do,
    is to give the leadership of the Guard the maximum flexibility
    to manage the force. If we are given the flexibility, we have a
    robust capability. Over 50 percent--even with all of the things
    that we've talked about here today, we still have a pretty
    robust capability remaining on the shelf that we can dip into
    and substitute and plug in place, so to speak, capabilities and
    special skill sets that are needed so that we don't have to
    abuse the same citizen soldier over and over, but we must
    retain that flexibility to do that, and I would urge this
    committee to make sure that the leadership that's represented
    here in all of the seven, reserve components have the authority
    to have some flexibility in that process.
        If we do that, I think we can mitigate much of what you're
    talking about, but as I stated earlier, it is still too soon
    for me to tell you definitively. We don't have any real trend
    evidence that says that this is going to cause us a long-term
    retention problem or a long-term recruiting problem, and so far
    it's been quite the opposite in terms of satisfaction, and the
    feeling that they did something worthwhile for their country
    when they came back off of service, and in most cases they have
    assimilated back into their civilian jobs and their families
    quite well.
        On the other issue about the consolidation of pay accounts,
    you're quite right, I can't comment on that for really two
    reasons. One is the Department of Defense (DOD) policy, and
    that I would support the policy, but however, I can't even tell
    you that today, because I have not seen the implementing
    instructions for that consolidation, so as you well know, the
    devil may well be in the details of that, and we have not seen
    those yet, so I don't know enough about that consolidation
    initiative to tell you whether that's a good thing or a bad
    thing for us here today.
        Senator Leahy. Mr. Chairman, could I just mention
    something? Senator Bond and I are the co-chairs of the National
    Guard Caucus, and we have sent a letter actually signed by a
    number of members of this committee to Senator Warner, Senator
    Levin and yourselves, Senator Inouye, expressing the same
    concerns that you've just raised.
        Senator Bond and I made sure it was a very bipartisan
    letter, but it is coming your way and expresses the same
    concerns you've just expressed.
        Senator Stevens. Good. Thank you very much.
        Senator Burns was first under the early bird rule. He went
    upstairs, I understand, to see the exhibit, so we'll count that
    as being present.
        Senator Burns. I've already been up there. We're really
    getting a little late down here.
        I guess the chairman raised a very important question here,
    and what we hear out in my State of Montana, not only are we
    getting some pressure from the employers, but we're also
    getting some pressure from the self-employed. If you take my
    State, it has an agricultural base, you've got a young man
    that's probably had previous active duty, wants to maintain his
    edge, wants to serve, and also does it in a sort of a way that
    he makes a little extra money on the side, and doesn't mind
    that at all, and will spend the extra time in training, but
    there also are times when the crop's got to go in and when it's
    got to come out. He's also charged with paying for that farm,
    and that's a tough enough thing nowadays all by itself, so I'm
    going to follow this issue very closely.
        And also we recruited some people into the Guard that had
    some special talents, education, skills to fill some of our
    needs, and I will tell you that all you had to do was go up to
    902 and take a look at the new toys that we've got now that
    have worked very well in the range of high tech. So the people
    that we're recruiting are really highly skilled people in the
    private sector, but there again they've got a responsibility
    there, and I would say most of them want to stay trained.
        General James, I thank you very much for the support of our
    Air Guard in Montana. We're very proud of our Air Guard up
    there. We've upgraded now to Block 30s, as you well know, and
    they performed very well, and we're very proud of them, and we
    appreciate your leadership, and all of you understanding these
    problems, but as the chairman says, we've got to start
    somewhere in coming up with a master plan on how we're going to
    help these people either survive in the private sector and
    still rely upon their skills and their talents in time of an
    emergency.
        I think when they joined the Guard they didn't mind a short
    deployment to hone their skills, or to even go and be away
    forever on a declared war in the defense of this country,
    because they're motivated in that direction. They're highly
    motivated people, we find, but nonetheless--and that's a
    different circumstance, and we all understand that, but I am
    going to follow this issue very closely, but I think somebody
    has got to come up with a plan, a plan B so to speak, in the
    event that we get into a situation as we face today.
        And by the way, I want to iterate that in the Iraqi
    operation our warriors, all kidding aside, were the best
    ambassadors we had on the ground over there, and the way they
    performed, not only in their skills but also in their mission,
    but also that extra little bit it takes to establish a
    relationship with the people of Iraq, and that was truly a very
    sensitive area, and it was also noticed by a lot of folks in
    this country as being gentlemen and gentleladies of a very
    special force, so we appreciate that very much.
        Thank you, Mr. Chairman.
        Senator Stevens. Senator Dorgan.
        Senator Dorgan. Mr. Chairman, thank you. Let me say that I
    agree with all of the expressions by the chairman. I may be
    wrong, but I think there could be recruitment and retention
    issues in the future unless we address this issue. The men and
    women who serve don't complain, do so willingly, and are
    enormously proud of doing so, but let me just give you an
    example.
        Part of the 142nd Engineers Battalion from Wahpeton, North
    Dakota, was deployed to Kosovo in January 2000. They spent 7
    months in Kosovo, came back for about 2 years, and now deployed
    to Kuwait. In all, 700 members of the 142nd were alerted on
    January 20, mobilized on the 24th, 4 days later, and 2 days
    after that they began moving their trucks from North Dakota to
    Fort Carson.
        I know normally there's a 30- to 60-day warning before
    deployment. That's what the Army would like to do, but in this
    case it was just a matter of a couple of days, so I think these
    issues are important, and as I say, these are not complainers,
    they're proud to serve their country, but I think we should
    address the issues the chairman mentioned.
        I'd like to ask more specifically a question I don't think,
    General Blum, you answered when the chairman asked it. Tell me
    about demobilization. If there are not now specific plans for
    beginning to demobilize, who will make those plans, and when
    will they make them, and I ask that I think on behalf of the
    families and employers and others. What do you expect with
    respect to the demobilization of those units that have been
    sent overseas at this point?
        General Blum. Senator, there are, in fact, plans being
    formulated as we speak for the demobilization of National Guard
    soldiers and airmen that were called up for duty. I wish I
    could give you a simple rule of thumb as to how they're doing
    that, last in, last out, first in, first out. It unfortunately
    doesn't work that way, as nice as we'd like, because they did
    not follow the normal troop sequencing procedure in the way
    they called up our units.
        We are in an extraordinary time, as you are aware, 9/11,
    and no one foresaw we were going to prosecute a war in
    Afghanistan and then very quickly prosecute a war in Iraq. We
    provide military capability when called upon, and we did not
    make those plans. We respond to those plans.
        The demobilization will--here are our concerns, that we get
    people off of active duty as quickly as they are not absolutely
    needed there. These people, these great Americans that you have
    all talked about, do not mind for the most part interrupting
    their lives to serve their Nation, but they want to do
    something meaningful. There are many people right now that are
    in various stages in the pipeline of going and coming out of
    there, and we are trying to sort that out so that we don't
    abuse this precious resource, our citizen soldiers, in that
    process.

                                 DEMOBILIZATION

        Senator Dorgan. But how much notice might you give for
    demobilization, and when can families and employees, employers
    and others expect some basic notion of whether this unit will
    continue to be mobilized for 6 months or 1 year, or whether
    perhaps within 3 months that mobilization will be over?
        General Blum. We are hoping to sort this out in short
    order. As soon as we have that information we share that
    immediately with the local commander, in this case the Adjutant
    General of the State, and then it immediately goes to the
    family support group and employers within a matter of hours and
    days.
        So we understand the angst that it causes. The uncertainty
    really creates some frustration and some tensions in employer
    support and with the family support piece. We are very
    concerned about this. I hope you didn't take my answer to mean
    that we are not concerned about the issues the chairman brought
    up. We are watching this very carefully, and we are advocating
    for the soldiers. Unfortunately, the General Officers
    represented here today do not control that process.

                                 COMMUNICATIONS

        Senator Dorgan. Let me mention one other thing and then ask
    General James a question. I met with a large group of families
    recently. They had two big concerns. One is mail, and the
    second is telephone contact. I'm sure you're working hard to
    try to resolve those issues, but it is critical to the
    families. To be able to communicate is just a critical
    connection.
        The families are very proud of their loved ones serving.
    They weren't complaining to me. They were just asking for the
    opportunity to have the Defense Department provide better
    communications, better movement of mail, and I know in staging
    areas sometimes that's very hard, but I just wanted to pass
    that on to you. That was their concern.

                                 AGING AIRCRAFT

        General James, you know the Happy Hooligans, the Air
    National Guard in Fargo, North Dakota have three times won the
    William Tell Award, the award for the best fighter pilots in
    the world. Yet they are flying the oldest fighters in the Air
    Force, which is incongruous to me. You and I have talked about
    this at great length. They fly the Block 15s. They're the only
    operational unit in the country still flying them. This needs
    to be remedied. Are we any closer to a solution to that?
        General James. Not currently. The hold that was put on the
    decision that I had to make about upgrading Fargo was generated
    by the fact that on relook the active component who supplies us
    with our equipment, our aircraft, are relooking the need for
    any more offensive counterair or air sovereignty resources
    going to the Guard in the F-15.
        As you know, as we talked before, the F-15, one squadron
    was identified. The Guard was approached about taking that
    squadron, and that squadron was to be activated and put either
    in Fresno or Fargo, so in either case it would have generated
    an upgrade in your equipment.
        The decision was put on hold. We're still looking at some
    possible alternatives. I've asked my staff to look at even the
    possibility of looking at other alternatives, and right now we
    don't have anything. I cannot give you a positive answer on
    that.
        Senator Dorgan. Mr. Chairman, on 9/11, when the Pentagon
    was hit, the first jet fighters flying air cover over the
    Nation's capital were the F-16s of the Happy Hooligans flying
    out of Langley Air Force Base.
        As I indicated, these are people who run drugstores and
    family farms, and mechanics, and the fact is they've gone out
    three times and won the William Tell Award against the best
    pilots and the best equipment in the world, beating all of the
    Air Force and everybody else, and the fact is, they've been
    shortchanged here with respect to these planes. They're flying
    F-16s that are out of time, and they do it, but the cost to
    maintain them is incredibly high.
        And I've heard the same answer about these issues for the
    last 3 or 4 years, and General, we've got to try to resolve the
    issue with these planes. You and I need to meet again, and I
    guess we need to meet with the Air Force Chief of Staff as
    well, but year after year after year we get the same answer
    with respect to these old A-model aircraft.
        I mean, we've a lot of wonderful people, a lot of missions,
    a lot of great units around the country, but this one begs for
    a solution and it hasn't been forthcoming, and I hope I can
    count on you to do what we ought to do for one of the best
    units in this country.
        General James. We're trying to come up with some solution,
    because it's unconscionable to have a unit that good flying
    airplanes that old and still tout ourselves as an important
    member of the total force, and this is one of my top
    priorities, Senator, and we'll talk about it more.
        I have an out-of-the-box kind of solution that I have had
    my folks put their pencil to and try to see if it's feasible. I
    don't know that it's going to be acceptable to the Air Force,
    but we're going to look at something that's quite different in
    the way of getting some new airplanes.
        Senator Dorgan. General, I like out-of-the-box solutions.
    As long as they're solutions, I like them.
        General James. Okay.
        Senator Dorgan. So this begs for a solution. I appreciate
    your willingness to put it at the top of your list.
        Mr. Chairman, thank you.
        Senator Stevens. Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you. Thank you,
    members of our panel for being here today and helping us
    understand the implications of the budget request that's being
    submitted on behalf of the National Guard. We appreciate very
    much, as I said in my opening statement, the leadership you
    have provided in the mobilization as a part of Iraqi Freedom,
    but it comes on the heels of other mobilizations for Noble
    Eagle and Enduring Freedom. There's been a very heavy
    concentration of activity in the National Guard units around
    the country.

                                   RETENTION

        I was impressed with the comments of the Senator from North
    Dakota about the fact that very little notice has been given
    for some of these activations. Usually it was a 30-day notice.
    That's been a tradition or a guideline. Do you worry, as I do,
    that this may have implications of people not looking with
    favor on reenlisting in the National Guard, or depletion of our
    forces? Have you seen any evidence of that? I know it may be
    anecdotal at this point. What is your reaction to the effect
    that that may have on our ability to attract men and women to
    serve in the National Guard in the future?
        General Blum. Senator, I think you're right to highlight
    that as an issue. All of the airmen and soldiers that this
    leadership team have talked to over the last past year have
    expressed their concern and desire for predictability, for
    knowing in advance what is required of them as far as possible
    for knowing when they will be needed and when they will be
    released. Employers, families, and the service members seem to
    do much better when we can give them a predictable time line of
    when they'll be called, how long they'll serve, and when they
    will return home.
        This is not just a service member here. The National Guard
    is a three-legged stool. The three legs are the airmen and the
    soldiers, the citizen soldiers and airmen, but their families
    are equally important, and their employers are as equal
    partners with the citizen soldiers and airmen and their
    families for the defense of this Nation. If either of those
    three legs gets out of balance, we threaten the integrity of
    the stool, so we are watching this very, very carefully, and
    the predictability would be highly welcomed by the three
    General Officers sitting before you today, and I'll let the
    others speak when they come up here, but any reserve component
    soldier really would love to have what you're suggesting.
        Unfortunately, with some of the realities that have
    happened, some of these campaigns, the global war on terrorism,
    ongoing commitments around the world that we were already
    supporting, the war in Afghanistan and then the follow-on war
    in Iraq, and then what may follow on as our involvement in
    phase 4 of Iraq has yet to be determined, so the predictability
    puzzle has not yet been solved for all of those events.
        Senator Cochran. General James, do you have any comments on
    that issue?
        General James. Yes, Senator. I agree predictability is the
    key. The Air Force has realized this, and that's why they
    established the AEF concept, the Aerospace Expeditionary Force,
    to give predictability to the airmen and the families so that
    they would know when they were eligible to be deployed, and
    they used this concept in Iraq, in Iraqi Freedom. They actually
    used the people that were due to rotate into theater, and they
    also kept some people that were in theater because of the AEF.
        Unfortunately, the predictability part for the reserve
    component is not as good as it is for the active component. We
    have to be part of our active team. We have to be engaged in
    these AEFs and activities and contingencies around the world to
    remain a relevant member of the team, so the predictability is
    very important.
        I would say also that these airmen are very proud to be a
    part of that, and they're proud to serve, but we don't know
    exactly what their breaking point is. When is it going to
    impact on our retention, and one of the things we did in the
    Air Guard is, we surveyed at the end of the first year and we
    looked at the results, and I'm pleased to say that they really
    were more positive than we thought. However, we're going to
    have to do it again at the end of the second year, and we're
    going to have to do it again another year or so down the road,
    because our operations tempo will continue to maintain a pretty
    high pace.
        Normally we lose--we turn over, excuse me, 10 percent of
    our force. The survey showed us that we'll probably turn over
    13, at the very most 15 percent of our force, so it's not going
    to be an issue that will beg--excuse me, would cause us much
    concern right now, but again we'll have to relook that, but in
    doing so we still do have those stress career fields in
    security forces and in firefighters and in support personnel
    and in red horses, we call them, people who build these bases.
        The Chief of Staff said this morning the most stressed
    career field in the Air Force right now is--the most limited
    capability is tents, because we've built over 30 bases around
    the world just in Operation Iraqi Freedom--not around the
    world, but to support Iraqi Freedom, and as such we have some
    stresses in areas we didn't anticipate in our standard Air
    Force, so we're looking very carefully at that predictability
    piece, at continuing to be part of the AEF and yet surveying
    our people to find out what their needs are.
        One of the things we do in the Air Guard is, we have
    contracted family support representatives. My predecessor,
    General Weaver, started this. We have at least one full-time
    person at every Air National Guard installation and separated
    unit for support of the families. Just as General Blum
    mentioned, the support of the families is very important, and
    if we can keep the family happy we'll keep the airman happy and
    they'll stay with us.

                                EMPLOYER SUPPORT

        The second part of that is the employers, the employers'
    support. By and large, our employers don't have, quote,
    anything for them. They don't have the predictability that we
    talked about earlier. They don't have any type of a tax
    incentive, anything, an incentive on the books that allows them
    to feel good about, other than being patriotic about having
    their folks be involved, so we need to get some way to give
    something back to the employers, and we are working very hard
    with our Employer Support of the Guard and Reserve (ESGR)
    people to keep them in the loop, to keep them in the
    communication loop and feeling good about what they do. The
    problems we've had have been really very small in terms of the
    scope of the operation.
        Thank you.
        Senator Cochran. Thank you. General Schultz.
        General Schultz. Senator Cochran, the issue is very serious
    with us. Overly concerned, I would not describe it quite that
    way, but we are most interested in the impacts of a schedule
    that drastically changed in the case of an employer or a
    soldier or a family on short notice as we put together the
    plans for an ever-changing war concept.
        But for the outstanding leadership across our States we
    couldn't have pulled this off. But for the outstanding
    soldiers, we couldn't have pulled this off, and some really
    understanding employers here, so we took plans and greatly
    moved the line to the left, as we say, and so instead of 30
    days, many of our units were actually alerted and mobilized in
    less than 7, some 1-, some 2-, some 3-day notices, and so I
    don't know that we've begun to realize the full implication of
    that activity set here, and of course our Nation's at war.
    That's why we're, across this country, willing to respond the
    way we do, and yet we understand there must be some discipline
    in the schedule over time. I mean, today we have plans that
    take our unit schedules out 3 and 4 years. You go to this
    theater, you'll deploy for this period, here's your major
    training event, and all of that turned upside down as we put
    together the final plan for Operation Iraqi Freedom, and of
    course the Guard units were involved in a number of those
    changes, and we've responded to everybody's credit across this
    country, but there are second and third order county
    implications.
        Now, what do we think long term? The Army Guard will meet
    our end strength this year. We're off our program target just a
    little bit. Retention is actually higher overall than we had
    planned. The active component has a stop loss policy in place,
    and about half of our members in the Army Guard come from
    active duty, so that's 30,000 soldiers that come into our ranks
    every year from active duty, so when the stop loss rules are
    all in place, consider those candidates not available to join
    the Guard, so we're off just a little bit in terms of our prior
    service accessions.
        Senator, we'll get through all of this, but the question
    you ask we take very seriously, and that is long-term outcomes,
    the implications, effect of how we handle this mission set, and
    our soldiers without a doubt will respond to the way we treat
    them.
        Senator Cochran. I had a chance just recently to visit the
    Mississippi National Guard Training Center. It's a regional,
    counterdrug training facility. It's located on the property of
    Naval Air Station Meridian, Mississippi, and I want to ask you
    to answer for the record, if you could, questions about the
    future possibilities for expanding the activities there to
    include homeland security and other law enforcement challenges
    that we have as a result of the war on terror and the threats
    we have against our country.

               C-17 FLEET AT JACKSON AIR NATIONAL GUARD FACILITY

        And I also have a question for General James for the record
    relating to the conversion to the C-17 fleet at the Jackson Air
    National Guard facility. We've talked about that before, and it
    would be good if you could bring us up to date and let us know
    how those plans are proceeding, and when we can expect to see
    that as a fully integrated part of the Air Force
    responsibility.
        General James. Senator, we have kept in touch with that. As
    you know, I visited the unit. You had your staffers there. We
    had briefings on the unit, and I'm pleased to tell you things
    are going quite well. We're on track. We're a little behind on
    one of the facilities in the construction, but I think there
    are some work-arounds that are going to bring that up to
    timetable pretty soon.
        The actual aircraft delivery was 2004, I think January,
    February 2004. It's been moved up 60 days. The first airplane
    should arrive this fall, in December, and right now we did have
    some discussion about the Block airplanes that you're getting.
    You're still getting the Block 14 airplanes and the Block 15,
    two other Block 15 airplanes later. There may be some dialogue
    about making them all the same blocks. As long as they're
    fairly new airplanes, and having the Air Force take the Block
    15s and two more, as I said, low time or new Block 14s so you'd
    have a homogenous fleet. That's the only thing that's come up
    lately, and I'm talking with General Handy and General Lipscomb
    to decide if that's what they want to do. Other than that, it's
    really a good new story. Things are working, progressing very
    well.
        Senator Cochran. Thank you. We appreciate your leadership
    on that issue. Thank you.
        Thanks, Mr. Chairman.
        Senator Stevens. Thank you very much. Senator Domenici.

                                 BORDER PATROL

        Senator Domenici. Thank you very much, Mr. Chairman. First,
    by way of a matter that I have some criticism, there's a major
    story in New Mexico today. It's styled, critics blast border
    plan, and essentially, General Blum, what it's talking about is
    that an area on our border, the National Guard provides some
    valuable support to the Customs department and border
    inspection operations, and hundreds of guardsmen around the
    country have become experienced inspectors in inspecting cargo
    at our borders, seaports, and mail facilities. As a result,
    Customs inspectors are better able to focus on inspecting
    terrorists, intercepting terrorists who try to infiltrate our
    borders.
        This work is very important to New Mexico on our border
    with Mexico. In all, there are approximately 52 guardsmen along
    the New Mexico border supporting a total of 90-plus Customs and
    immigration and agricultural inspectors. In addition to these
    inspections, the Guard is performing an effective
    counternarcotics surveillance as well.
        Recently, it has come to my attention that the Department
    of Defense plans to divest the National Guard of its inspection
    support duties. The rationale is that the inspection mission is
    not, and I quote, militarily unique.
        General, given the heightened state of alert that we have
    assumed since the terrorist attacks on our country, do you
    believe that now is an appropriate time to remove experienced
    guardsmen from our borders, and how does the DOD plan to effect
    the National Guard counternarcotics mission?
        General Blum. Senator, I have an office call and a meeting
    set up with the Deputy Assistant Secretary of Defense that is
    in charge of that particular operation, Andre Hollis. Mr.
    Hollis and I have had discussions on this when I was in a
    different job----
        Senator Domenici. All right.
        General Blum [continuing]. As the Chief of Staff of
    Northern Command. There is a four-star Air Force General named
    General Eberhardt who is deeply concerned about what moves
    across the Mexican border, both ways.
        Senator Domenici. Right.
        General Blum. The immigration and the narcotics, once
    viewed as a problem in itself, is an even greater problem when
    you consider the counternarcoterrorist nexus that can be
    connected to that, and the goodness in protecting our borders
    from hostile people, or hostile weapons systems, chem, bio, or
    nuclear, or high yield explosives coming across, or shoulder-
    fired missiles----
        Senator Domenici. Right.
        General Blum [continuing]. That could be used against our
    civilian aircraft coming across the border. We intend to engage
    with Mr. Hollis and present the National Guard's position in
    support of a combatant commander concern, so we do this in a
    unified effort, to reexamine the counternarcotics and
    immigration issue not as narcotics and immigration issues but
    national security issues, which may change the way the
    Department of Defense views that activity.
        I am not sure they totally understand the full value and
    the implications of what's being considered, but this is too
    early to tell you how that's going to work out, but at least
    you know what our concerns and interests are on that.
        Senator Domenici. General, you know what my concerns are.
    You've expressed it exactly right, and when the Attorney
    General and U.S. Attorney there expressed their concerns saying
    that they're not quite sure we're going to be able to handle it
    without this component, it does send signals to me that I have
    to get in touch with people like you and ask you how come this
    will happen.
        Now, on the positive side I want to say that New Mexico has
    a number, like other States we have a number of areas where
    weapons of mass destruction civil support teams have been put
    together. These teams have been trained and certified to
    respond to biological, chemical and nuclear incidents on key
    military installations and national laboratories.
        General, I applaud the quick action of the Guard, recognize
    the importance of the national laboratories, recognizing those
    in a proactive way. You have that going on in our State at Los
    Alamos National Laboratory, White Sands Missile Range, and the
    Air Force Research Laboratory installation right in the middle
    of Albuquerque. We compliment you on that and thank you for it.
        Mr. Chairman, for the record, as part of the discussion
    that has just taken place for the last hour with reference to
    how are we going to react in the future and what have we
    learned with reference to the Reserve and National Guard in
    this last couple of years, it seems to me, Mr. Chairman, that
    this is an opportune time for us to get information from our
    Reserve and National Guard units precisely as to how, how we
    can help them by changing rules and regulations on our end so
    that the Reserves and National Guard can serve us, as a people,
    better.
        It's obvious to me that we can't treat them in a willy-
    nilly way, that they just respond and if they're needed,
    they're needed, and if they're not needed, they're not needed.
    I think we have to have more objective standards and rules and
    regulations, because at the heightened time of everybody being
    excited about being in a war and wanting to serve, that's one
    thing, but the aftermath, when that's all settled down, then
    you have to measure what's really happened, what's happening to
    the attitude of the workers, the employers, and the parents,
    the families, and I would hope that you would be expressing
    concern in behalf of those that you represent so that you are
    not just used by the rest of the military to fill in and say,
    whatever's needed you all are going to have to do, regardless
    of the ramifications, and we'll take care of it later. I think
    that would be bad.
        And secondly, we have had to change what we pay to our
    military people and what we do in terms of helping their
    families during this war, during this war effort. I hope that
    if there are things we should be doing, whether--where we are
    paying more, remunerating better, offering better compensation
    and the like, and even some tax relief if necessary, I hope you
    are looking for those to recommend to us with reference to the
    Guard and the Reserve, because we have been surely looking for
    instances where we could be more fair, more equitable in that
    regard.

                       REDUCING SIZE OF GUARD AND RESERVE

        Thank you very much. Thank you, Mr. Chairman.
        Senator Stevens. Senator, thank you for the comments. I'll
    have some comments later, but I think the Department's answer
    so far that we've seen, I'll send you the issues study, is that
    we should enlarge the strength of the active units and reduce
    the size of the Guard and Reserve. I think a few Governors are
    going to have some comments about that, and besides that, I
    wonder--if you don't mind, Pat, if I just ask one question--
    what are we doing at the time of all these tornadoes? Every one
    of those States, the first responders should have been the
    National Guard, and many of those units are in Iraq or off on
    terrorism duty. Have you got any complaints yet about that?
        General Blum. Sir, we have not received any complaints
    about that because General Schultz and General James, to the
    degree that they were allowed, were very, very careful to not
    strip any Governor of their total capability to do State
    mission and anticipate the typical bad weather patterns and the
    normal Mother Nature-type catastrophes that happen, or leave
    them a response force in the State if they were to be attacked,
    particularly during the prosecution of the war in Iraq, by some
    agents or surrogates of the Iraqi, or sympathizer of the Iraqi
    people, so we were very careful to leave in every State and
    territory as much of a robust capability to respond as
    possible.
        Incidentally, in Missouri with the latest tragic events,
    the unit that responded to that tornado had been activated for
    war in Southwest Asia. They were at Fort Leonard Wood,
    Missouri, at the mobilization station. The unit heard its home
    town had been hit and devastated, and the unit marched back to
    their home town and responded to their own neighbors and
    families and friends. Even though they were on active duty,
    ready to go to war, they interrupted that process to come home
    to take care of the homeland, and then when that's done they'll
    go back to Fort Leonard Wood and prepare to go, so the short
    answer to your question is, we are watching that
    extraordinarily close.
        We want to make sure no Governor is left uncovered, no
    community is left without a National Guard, and as you may or
    may not know, the States have interstate agreements where they
    can mutually support one another now, which they did not have
    in years past.
        Senator Stevens. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman. In the last
    Congress I commissioned a General Accounting Office (GAO) study
    and asked them to look at health insurance requirements of the
    Guard and Reserve. The report found over 20 percent of our
    reservists, people who were ready to be deployed across the
    globe at a moment's notice, currently don't possess adequate
    health insurance. The report shows that this not only threatens
    readiness but it certainly raises questions on recruiting, and
    definite questions on retention. I've introduced S. 852, the
    National Guard and Reserve Comprehensive Health Insurance Act.
    It makes reservists eligible for TRICARE on a cost-share basis.
    The bill would open up TRICARE to help alleviate some of the
    problems on both readiness and retention.
        General Blum. Senator, any help in that area would be
    greatly appreciated. We at this table do not view that as an
    entitlements program. We view that as a readiness issue. The
    health and dental care of our soldiers and airmen is absolutely
    vital for them to be able to perform their mission when called
    upon. If you extend those kinds of benefits to our citizen
    soldiers and airmen, it also makes them very attractive for
    employers if they have health care, as you well know, because
    that gives them an advantage when they're competing for a job,
    and it may help mitigate some of the downside that an employer
    may view of hiring a citizen soldier or a reservist.
        Senator Leahy. Thank you. General James, General Schultz,
    do you agree with that?
        General Schultz. I agree with that, Senator.
        General James. Yes, sir.
        Senator Leahy. Thank you.

                            CALL-UPS OF GUARD FORCES

        Now, the National Guard has always been America's homeland
    security force, and the events of September 11, the war in
    Iraq, demonstrated the Guard's ready to deploy abroad or at
    home to defend the country. The Green Mountain Boys from
    Vermont were flying their aged F-16s over New York City almost
    immediately after the tragedy there.
        Actually, I was pretty impressed. I went there and watched
    some of the operations and you see these mechanics working
    literally around the clock to keep the planes flying and then
    the pilots doing the same thing. They weren't carrying dummy
    missiles, obviously, at that time.
        When the Guard is carrying out missions at home, it's
    usually most effective when it serves under the command and
    control of the Nation's Governors. They know their communities,
    and if there's a question of the Guard cooperating with local
    law enforcement or State law enforcement they know best how to
    do it. I'm concerned that the Department of Defense has not
    sufficiently supported callups under the title 32 status. How
    do you feel, General Blum? Do you support call-ups of Guard
    forces under the title 32?
        General Blum. Senator, yes, I do. It goes back to the issue
    of flexibility and responsiveness. To me, you should leave in
    the hands of whoever is responsible for responding to an event
    the most flexibility to respond to that event as possible. The
    unique dual status of the National Guard should not be
    discarded, it should be embraced. It actually is value-added in
    most instances.
        Senator Leahy. General James, do you agree with that?
        General James. I do agree with that. I think he's right on
    the mark on that, and as a former the Adjutant General (TAG) I
    will tell you that it's very important that the Governor and
    the Adjutant General of that State have the flexibility to
    utilize and maintain command and control of those forces under
    title 32 status as opposed to title 10. There are some cases
    where title 10 status has its benefits, but overall I believe
    title 32 would be the first choice of the Governor and the
    Adjutant General.
        Senator Leahy. And General Schultz?
        General Schultz. I agree with that, Senator, and if title
    32 would bring along a certain set of definitions, meaning it's
    a training status, perhaps it's time for another status that
    gets at the realities of post-September 11 attacks on this
    Nation, where a Governor still would control those first
    responses in a status, and then maybe the Federal force, the
    title 10 forces follow on at some logical point in an emergency
    mission, so I think we've got some work on this, but I do
    support what's been outlined by our chief here.
        Senator Leahy. As you all know, this committee has, or
    subcommittee has made the Guard and Reserve equipment account a
    high priority over the past several years, not that any
    parochial questions ever arise from this committee, but I----

                      NATIONAL GUARD AND RESERVE EQUIPMENT

        You have gotten out of me my comments about the F-16s and
    the 158th Fighter Wing, the oldest such equipment. They fly
    more hours than any other F-16s in the Air Force inventory, and
    are doing it well. How do we keep the Guard's equipment as
    modern as possible? We've got the Guard and Reserve equipment
    account, but should we be doing more? I mean, how do we do
    this, and if that's not an open-ended softball you're never
    going to get one in your life.
        General Blum. Senator, let me thank this committee for what
    they've done in providing for us in the past in the most
    generous fashion. The bottom line of that National Guard
    Reserve equipment account is that it allows the local
    commander, those charged with responsibility for ensuring
    readiness, the flexibility they need to manage our readiness,
    and I think the results are proven. This is a very, very good
    program, and it's much appreciated by us. Not to be open-ended,
    but since we are using this equipment at a much-increased rate
    than we projected even a year and a half ago, the wear-out rate
    would tend to lean toward, we would like to see this program
    continued, and if you wish to expand it, that would be most
    welcome.
        Senator Leahy. Mr. Chairman, the reason I raise that, as we
    all know, we have to come up with a lot of money for the
    Department of Defense. We all understand that. Just replacing
    the munitions expended in Iraq will be very considerable, but
    it's been a strain on all the equipment, all the way through,
    but I just don't want anybody to forget the Guard's equipment
    was strained, too.
        Mr. Chairman, I thank you for your courtesy. Gentlemen,
    it's good to see all of you, and thank you.
        General James. Thank you, Senator, and thank you for your
    support of the LITENING. If it had not been for the LITENING
    pods and the monies that were spent from the National Guard
    equipment account, we would not have been able to participate
    in the last contingency, very simple. LITENING gave us the
    precision-guided munitions capability that we needed, it kept
    us relevant, it put us in the fight. Thank you.
        Senator Leahy. Well, General, you made it very clear to me
    how important those were and I appreciate it.
        Thank you.
        Senator Stevens. Senator Hutchison.

                          OVERUSE OF GUARD AND RESERVE

        Senator Hutchison. Thank you, Mr. Chairman. Let me say
    first that the Easter of 2000 was probably the best Easter I've
    ever spent. It was with General James in Bosnia with our Guard
    unit. He was the head of the Texas Guard at the time, and we
    went over there. It was the first time we had a Guard unit in
    command and control. It was kind of the test case, and our
    Texans did so well that many have followed since, and it was a
    wonderful opportunity to go to that sunrise service and visit
    with our troops.
        I won't belabor it, because my staff tells me that others
    before me have made the same comments and questions about
    overusing the Guard and Reserves, and I have great concerns in
    this area as well. I talked to a lot of those young men and
    women in Bosnia, and have since, about the strains that occur
    when they are deployed so much, and talked with Senator Stevens
    on a trip that we took to Saudi Arabia, where we had Air Guard
    units that had been over there three times over a 2-year
    period, and they were pretty worn out, so I am concerned about
    that, and I just will look forward to working with the
    Department of Defense on the issues that relate to what is our
    troop strength in active duty, and what can we realistically
    expect from the Guard, and do we have the right troop strength
    there as well, but I won't ask the question because I
    understand you have thoroughly gone through that.
        There is, though, one question that I do have, and it was
    in the base tour that I took 2 weeks ago, and I found a woman
    near Diaz and Goodfellow whose husband had gone out with a
    Guard unit out of Collin, out of Fort Hood, and she was having
    trouble getting the access that we know our families of
    deployed have, and it turns out that we don't have a clear
    mechanism for deployed Guard and Reserve units to be able to go
    to the nearest base to their home if it's not close to where
    they're actually deployed from, so I am working on legislation
    right now that would require that contact to be made to the
    nearest base for a deployed reserve personnel, and that that
    person, the next of kin would have the contact at the base,
    that there would be someone at the base who would be in charge
    of dealing with the reserve families who are left behind, but
    I'm going to just ask you if you are aware of this, and if it's
    something that you could work on before I hopefully pass my
    bill.
        General Blum. I think that would be most welcome. As you
    know, the active duty bases are not really ideally located
    against population centers. Our membership mostly comes from
    population centers, so anything you could do to make that
    easier on families and make their access more eased would be
    most appreciated. Thank you.
        Senator Hutchison. Well, I will introduce the bill and then
    either get it in the authorization bill or offered as an
    amendment, and I don't think there'll be a problem with it, but
    I don't even think it should be a big problem for you. I think
    it's just having that little communication mechanism so that--I
    mean, these people are under a lot of stress, because they're
    not active duty, so in many instances they don't have the same
    family support and infrastructure, so I want to give them that
    to the greatest extent possible.
        Senator Hutchison. Thank you, Mr. Chairman.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Stevens. We want to thank you very much, gentlemen,
    for your testimony. We look forward to working with you on
    these difficult issues. The subjects that we discussed may
    primarily be in the province of the Armed Services Committee,
    although several of them are in the budget transmittal to us,
    which would require us to act on them, too, so we will be back
    in touch on some of those issues before we're through. Thank
    you very much.
        General Blum. Thank you, Mr. Chairman and members of the
    committee.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

            Questions Submitted to Lieutenant General H. Steven Blum
               Questions Submitted by Senator Christopher S. Bond

                              SEAMLESS ENVIRONMENT

        Question. What measures are you taking to ensure National Guard
    soldiers and airmen can operate seamlessly in the Joint Environment and
    Combined Environment?
        Answer. The National Guard is increasingly being called upon to
    participate in joint and combined operations. The peacekeeping task
    force in Bosnia is just one of those examples. At the same time, we are
    undertaking several measures to ensure that Guardsmen can more
    effectively operate in the full spectrum of operations. These formal
    and informal opportunities will be evolving as the National Guard's
    transformation process takes shape over the coming months.
        The National Guard is rapidly moving toward a joint configuration
    and joint operations. The National Guard Bureau is being reorganized
    into a true joint organization with an effective date of July 1, 2003.
    Headquarters in the 50 states, 3 territories and the District of
    Columbia are being reorganized into Joint Force Headquarters effective
    October 1, 2003. Once formed, these headquarters will better align and
    mirror our Combative Commands, Joint Staff, and Reserve Component
    forces within each state.
        The transformation of the Guard will be a dynamic and ongoing
    process. The National Guard Bureau and the National Guard of the
    Several States will operate in a joint environment on a day-to-day
    basis. We will undertake joint professional military training for our
    officers and enlisted personnel; train and groom our future leaders for
    joint operations; seek joint and combined assignment opportunities for
    our best leaders; and continue to embrace and expand upon our
    successful current joint operations, such as Bosnia, Sinai, Iraq,
    Afghanistan and the numerous National Guard State Partnership programs.
        Our soldiers and airmen are being actively encouraged to take
    advantage of increasing opportunities to serve on Joint Staffs. We have
    aggressively provided National Guardsmen to serve at U.S. Northern
    Command. Another set of opportunities will soon exist as U.S. Northern
    Command stands up its National Guard Augmentation Unit. We continue to
    monitor with interest the efforts at Joint Forces Command to launch
    Joint Professional Military Education for Reserve Component members.
        The best preparation is experience. WMD Civil Support Team (CST)
    operations and counter-drug operations involve Army and Air National
    Guard assets working together. As we stand-up more CSTs, this
    experience base will expand. Our successful airport security mission
    involved both Army and Air National Guard members. By virtue of these
    and other experiences, as well as the planned changes, current and
    future generations of Guardsmen will be able to operate seamlessly and
    successfully in all types of joint and combined operations they will be
    called upon to support at home and abroad.

                        IMPROVED WMD RESPONSE CAPABILITY

        Question. How is the National Guard preparing to improve the
    capability to better respond to WMD events?
        Answer. The National Guard Bureau and the National Guard are
    engaged in a myriad of initiatives designed to enhance the scope and
    timeliness of a National Guard response to a WMD incident.
        Congress authorized and resourced the current 32 WMD Civil Support
    Teams (CST) and the National Guard fielded those units on or ahead of
    schedule. The CSTs have made major contributions to our national
    readiness and they are responding to civilian authorities on a daily
    basis. The National Guard Bureau is constantly monitoring new
    technology that might enhance their capabilities in the future and uses
    every opportunity to expand and strengthen the skills of CST members as
    well.
        The National Guard Bureau, with Congressional support, developed
    the Comprehensive Review and Report of September 11th outlining actions
    taken throughout the emergency management and response communities in
    the minutes and days following the 9/11 incident. The report's purpose
    was to make available to the civilian and military communities an
    overview of actions taken, so that all could be aware of the challenges
    faced, areas of need and opportunities to further refine response and
    support capabilities.
        The report led to the Automated Exercise and Assessment System
    (AEAS), funded by the Congress and initially fielded in April 2003. The
    AEAS' primary objective was to create a fully automated and integrated
    electronic tabletop exercise tool that allows Emergency Responders and
    Emergency Managers to prepare and assess their communities' readiness
    to respond to incidents concerning WMD. AEAS thoroughly exercises the
    emergency response community and assists the National Guard in
    identifying potential mission support requirements by individual
    jurisdiction.
        Critical Incident Stress Management (CISM) training for the Guard
    was funded by the Congress and conducted during the past year. The
    National Guard trained 500 personnel as Certified CISM trainers,
    doubling the number of internationally certified and recognized
    trainers in the world. These CISM-qualified personnel are available to
    assist communities as well as their military organizations in time of
    need.
        We have been in close coordination with the Department of Defense
    to prepare an effective fielding plan to stand up the additional 23 WMD
    Civil Support Teams per Section 1403 of the fiscal year 2003 National
    Defense Authorization Act.
        I announced as part of my ``Transforming the Guard'' initiative,
    that the National Guard would organize itself as a truly joint
    organization beginning at the National Guard Bureau on July 1, 2003 and
    in the various states on October 1, 2003. It is the right thing to do
    for America and it is critical for the National Guard to ensure that we
    are fully capable of operating across the full spectrum--from the
    combat war fight, through Homeland Defense and Security, to responding
    to the governors in times of natural disaster or civil disturbance.
    Furthermore, this initiative will allow the National Guard to quickly
    and efficiently respond to the requirements of U.S. Northern Command
    either as the force provider and/or as the Joint Force Headquarters
    coordinating a follow-on federal military response.
        The second element of the transformation initiative is to leverage
    our existing war fight capabilities. We must leverage our existing
    structure and capabilities to ensure our forces are never late to need.
    We will task-organize 10 National Guard Chemical, Biological Incident
    Response Forces (NGCBIRF). The task forces will consist of a National
    Guard CST, an enhanced division medical company with 150 person per
    hour decontamination/treatment capability, an enhanced engineer company
    with specialized search and rescue equipment, and task-trained combat
    units capable of supporting law enforcement. These task forces will
    meet a previously identified NORTHCOM request for capabilities that are
    currently limited.
        We will expand National Guard involvement in Ground-based Mid-
    course Missile Defense by including both the Army and Air Guard. We
    will build on the Nike Hercules Guard model and intend to include
    Traditional Guard members and M-day units. We will create National
    Guard Reaction Forces through dual missioning and training existing
    units. These units will be immediately available to state and federal
    governments, and for Homeland Security purposes are already forwarded
    deployed throughout the United States. The units will retain full war
    fight and homeland security capabilities. These forces will also meet a
    previously identified NORTHCOM request for available forces.

                          IMPROVED EFFICIENCIES AT NGB

        Question. What effort, if any, are you making to improve
    efficiencies at the National Guard Bureau to reduce redundancies and
    improve the response time in routine and crisis operations between
    State National Guard HQ's, OSD, Northern Command, and civil
    authorities?
        Answer. The transformation of the National Guard Bureau and the
    headquarters of each State National Guard to joint configuration is the
    first step to increasing efficiencies and reducing response times to
    the full spectrum of National Guard response requirements.
        The National Guard Bureau is currently increasing its ability to
    communicate directly with the Department of Defense, U.S. Northern
    Command, the State National Guard Headquarters, and the civil
    authorities at all levels.
        This is being achieved in two ways. We are reorganizing our
    communication and information systems to provide more timely, relevant
    information to those officials who have an immediate ``need to know''.
    This can range from the on-scene incident commanders to regional
    combatant commanders. Critical to the information flow is the soon to
    be formed Joint Force Headquarters-State, which will be able to rapidly
    facilitate information passing to and from first responders and other
    civil authorities within their states. This is a top priority at the
    National Guard Bureau and will be implemented in the coming months.
        Joint Forces Headquarters at the state level will provide NORTHCOM
    and other federal entities with capabilities that are currently not
    available. The Joint Force Headquarters will provide a seamless
    transition and escalation from the almost immediate response by
    National Guard forces to the later arrival of federal forces. This will
    provide for continuity of operations and full integration of federal
    military support in response to, and in support of, the emergency
    management, emergency response, and elected officials communities.

                                CHAIN OF COMMAND

        Question. Are you satisfied with the current reporting chain of
    command that requires you to report through the Air Force and Army
    Service Chiefs when raising an issue that requires the attention of the
    Secretary of Defense or the Chairman of the Joint Chiefs?
        Answer. The present Channel of Communications is an efficient and
    effective means of dealing with Service-specific issues. This has
    effectively produced a highly ready Army and Air National Guard force
    that has proven itself over and over again. However, since September
    11, 2001, the various National Guard in the states have become
    increasingly engaged in homeland security operations under the command
    and control of state governors. At the National Guard Bureau, we
    monitor these operations and facilitate access to equipment within and
    between states.
        The Commander U.S. Northern Command has expressed interest in being
    situationally aware of state operations and capabilities. The National
    Guard Bureau is working to help provide NORTHCOM with that awareness
    and to serve as a communication channel to the states as needed. Our
    on-going re-organization to a more fully joint staff reflects the
    National Guard's requirement to more effectively operate in the joint
    environment.
        There may be merit in studying the possible expansion of the
    National Guard Bureau's purpose by adding service as the Channel of
    Communications between the states and the Department of Defense and the
    Joint Chiefs of Staff. This would enhance the National Guard's
    capability to effectively work in this joint operational environment
    and capitalize on our on going transformation. Strengthening links with
    the Assistant Secretary of Defense for Homeland Security, and the
    commanders of U.S. Northern Command, U.S. Pacific Command, and U.S.
    Southern Command, would provide mutual benefits to those organizations
    as well as the states.

                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison

                            TRANSFORMATION PROGRAMS

        Question. What are your key Transformation programs in the 2004
    budget request?
        Answer. The key Army National Guard (ARNG) transformational
    programs contained in this year's budget request include the fiscal
    year 2004 portion of Aviation Transformation and conversion of the
    Pennsylvania ARNG's 56th Brigade to a Stryker Brigade Combat Team
    (SBCT). The fiscal year 2004 portion of SBCT conversion is fully funded
    in the request, but Aviation Transformation is not. The 56th Brigade
    SBCT is programmed for Initial Operational Capability (IOC) in fiscal
    year 2010. The ARNG is looking at options to accelerate IOC to fiscal
    year 2008.
        There are several key Air National Guard (ANG) transformational
    programs funded in the fiscal year 2004 budget request: the ``blended'
    active Air Force/Air National Guard (ANG) JSTARS wing at Robins AFB,
    Georgia; the ANG support squadron to the Rivet Joint wing at Offutt
    AFB, Nebraska (it was formed from the Nebraska ANG's air refueling
    wing); and ongoing funding for the Washington ANG's 162nd Information
    Warfare Squadron at Bellingham, Washington, which was re-missioned from
    a ``sunset'' combat communications role.

                          TRICARE HEALTH CARE COVERAGE

        Question. What are your thoughts on extending TRICARE health care
    coverage to members and families of the National Guard on a cost-share
    basis? Would this provide a needed service to our Guardsmen? Would
    employers view it as an incentive to hire Guardsmen?
        Answer. In general, the National Guard supports extending health
    care coverage under TRICARE for Reserve Component members and families
    to improve medical readiness, recruitment, and retention. We believe it
    would be appropriate to extend this benefit to National Guard members
    as part of a more equitable compensation package that has become more
    compelling in light of increasing military commitments and operational
    tempo shared with the active component.
        Compared to the untenable costs of citizen-soldiers and citizen-
    airmen being unfit to deploy, extending TRICARE coverage to all of our
    members would provide a cost-effective means of ensuring medical
    readiness. Providing health care coverage to those Reserve Component
    members who do not have private health insurance because it is not
    affordable would not be an entitlement as much as it would be a
    readiness issue. Furthermore, employers would definitely view this as
    an incentive to hire Reserve Component members, as it would provide a
    direct cost benefit.

                        SOLDIERS AND SAILORS RELIEF ACT

        Question. How well has the Soldiers' and Sailors' Relief Act
    supported your members and are there any improvements to the act you
    can suggest?
        Answer. In the past, the Soldiers' and Sailors' Civil Relief Act
    (SSCRA) did not support the National Guard as well as it could because
    the SSCRA only applied to National Guard members in Title 10 status. As
    a result, Guardsmen who provided security to the nation's airports
    following the events of September 11, 2001 were not eligible for SSCRA
    benefits because although requested by the President, they conducted
    operations under section 502(f) of Title 32. Last year's addition to
    the SSCRA to include members of the National Guard called to Active
    Duty at the Request of the President was a tremendous and appreciated
    improvement. It has helped many members of the National Guard who have
    been called to active duty.
        Additional considerations the Congress may wish to take up include:
    increasing rent protections for high cost areas; the ability to
    terminate car leases; protecting tuition and class standing for members
    who are college students; and lowering home mortgage interest rates to
    the prime, but no greater than 6 percent.
        H.R. 100, the Servicemembers Civil Relief Act, introduced in the
    House, proposes to revise the SSCRA and provides a new definition of
    servicemember, which is the term used to trigger many protections. If
    H.R. 100 moves forward, the definition of ``servicemember'' should be
    modified to include Army and Air National Guard members when acting
    under section 502(f) of Title 32, or the trigger for servicemember
    protections should be tied solely to the proposed definition of
    ``military service''.

                   EMPLOYER SUPPORT OF THE GUARD AND RESERVE

        Question. How can you recommend we better support the employers of
    our National Guard members?
        Answer. With the increased utilization of reserve component
    personnel, employers are being impacted more than ever. As a result,
    programs such as the Employer Support of the Guard and Reserve (ESGR)
    are key to our efforts in gaining and maintaining the support of our
    civilian employers. ESGR greatly assists civilian employers with their
    Guard and Reserve employees by providing information, rewarding them
    for their sacrifices, and if necessary, resolving disputes.
    Accordingly, Congress should support the continued resourcing of this
    important program.
        We conduct numerous employer symposiums during the course of the
    year and we hear from employers about their concerns. One way we can
    make a significant difference with the employers of our soldiers and
    airmen is by providing them advance notification (at least 30 days or
    more, if possible) of any mobilizations, and we are continuously
    working with the Services to allow sufficient prior planning. Small
    businesses are especially hard hit by mobilizations so more
    predictability would be very beneficial to them.

                                     ______

                   Questions Submitted by Senator Tom Harkin

                              COUNTERDRUG SCHOOLS

        Question. This year the Iowa National Guard received $3.5 million
    to set up the fifth National Guard Counterdrug School (Mid-West
    Counterdrug Training Center) for training of law enforcement officers
    and community based personnel at Camp Dodge, Iowa. Utilizing existing
    facilities and National Guard personnel to administer the program, the
    Iowa Guard has begun to provide training by certified law enforcement
    personnel to thousands of officers in over ten states throughout the
    Midwest. In fiscal year 2004, MCTC needs $3.0 million to continue the
    training of thousands of law enforcement and community leaders, who
    currently have no training available in their areas. Could you describe
    the assistance and training the MCTC is providing to regional law
    enforcement to reduce drug trafficking in the Midwest, and the number
    of people being trained?
        Answer. The Midwest Counterdrug Training Center (MCTC) facilitates
    law enforcement and community-based organization training, with a drug
    nexus, by setting the conditions for training at Camp Dodge, Iowa, and
    through the use of mobile training teams as requested by the host state
    law enforcement agency. The yearly training calendar is established
    based on training requirements set by county sheriffs, police chiefs,
    and state patrol commanders primarily in the fifteen-state Northwest
    Counterdrug Region.
        In its first year, the MCTC has planned for thirty-three courses
    and nine training seminars. Our goal in the first year is to facilitate
    the training of 900 personnel. Indications are that MCTC will exceed
    the ``number trained'' goal by 600-700 personnel. MCTC's students
    represent thirty-three states and territories. Classes range from
    highway interdiction techniques and procedures to street-wise Spanish.
    MCTC facilitates Intelligence Analysts training with threat assessment
    instruction, ``follow-the-money'' techniques, and computer evidence
    recovery. Other courses include clandestine laboratory certification,
    highway drug investigations, and drug nexus interview and interrogation
    techniques.

                              COUNTERDRUG SCHOOLS

        Question. By utilizing existing facilities and manpower at Camp
    Dodge to support the community and law enforcement personnel, does this
    cause any decrease in the combat capability or readiness of any
    National Guard soldiers or airmen?
        Answer. No. In fact, we believe that it enhances readiness. There
    is no decrease in combat capability, readiness or availability as
    National Guard soldiers and airmen remain assigned to their units and
    are deployable as members of those units. Facilitating training for law
    enforcement through training centers, such as the Midwest Counterdrug
    Training Center (MCTC), does not affect any unit's deployable status or
    readiness posture. Soldiers and airmen who support MCTC are better
    prepared because they have already been medically screened to
    deployment standards, and are already in the Army's medical data banks.

                                     ______

           Questions Submitted to Lieutenant General Roger C. Schultz
                  Questions Submitted by Senator Arlen Specter

              ARMY NATIONAL GUARD 56TH STRYKER BRIGADE COMBAT TEAM

        Question. General Schultz, I have been informed that the Secretary
    of Defense has reconsidered the planned transformation of the
    Pennsylvania Army National Guard's 56th Brigade to a Stryker Brigade
    Combat Team, a unit which is currently ahead of schedule and doing
    well. Failure to continue the transformation, a process already well
    under way, will have great consequences and would be detrimental to the
    Army, the Pennsylvania Army National Guard, and to the Commonwealth of
    Pennsylvania. With this in mind, do you not believe that implementing
    the Secretary of Defense's plan to scrap the first transformational
    Army unit in the National Guard would degrade the modernization of the
    Guard and Reserve Components by not including them in the early phases
    of the SBCT program?
        Answer. The 56th Brigade conversion to become a Stryker Brigade
    Combat Team is on schedule. It has been our intent from the beginning
    to transform Army National Guard units. Plans are on schedule to field
    the brigade in its new design. The Army Guard is fully capable and
    prepared to modernize units across our formations. The 56th Brigade is
    leading the way in our efforts to modernize Guard units. The Army's
    efforts to modernize include the Guard. Any delays to the current
    schedule will degrade our ability to accomplish the emerging mission we
    are currently assigned. It has been my recommendation to proceed with
    fielding the Stryker Brigade Combat Team in the 28th Infantry Division.
        Question. Is it possible that transformation of the Guard and
    Reserve may produce different results than transformation of active
    units?
        Answer. No. The 56th Brigade will provide the Army with the same
    organization, structure and capability as an AC SBCT. It will provide a
    modernized combat brigade that is quickly deployable, lethal,
    survivable and have the ability to operate in a joint environment.
        Question. What impact will exclusion of the transformation of the
    Guard's 56th Brigade have on readiness?
        Answer. In the short term, readiness will remain status quo in the
    56th Brigade and the Army National Guard. However, the lack of modern
    equipment and systems that are programmed to accompany a SBCT would
    mean that the Army National Guard would not receive some of the newest
    systems and the new equipment training associated with the fielding of
    these systems. The 56th Brigade, and the other divisional maneuver
    brigades are not equipped with the same modern systems found the active
    army, and are short major equipment such as tactical wheeled vehicles.
    The SBCT is programmed to be fielded with the latest equipment and be
    filled to 100 percent of the authorized amount.

                    FUTURE FIXED WING AVIATION REQUIREMENTS

        Question. I understand that the Army National Guard forwarded a
    study in July 2001 to the Committee on Appropriations that identified
    future fixed wing aviation requirements to support and sustain planned
    missions such as weapons of mass destruction and national missile
    defense.
        Answer. To develop the 2001 response, and answer the Appropriations
    Committee's inquiry on fixed wing requirements to support weapons of
    mass destruction and national missile defense, the Army National Guard
    thoroughly reviewed the minimum fixed wing cargo capabilities required
    by the approved Fixed Wing Investment Strategy (FWIS) dated August
    1993. The FWIS's minimum required FW cargo aircraft capabilities were
    compared to those necessary to adequately support weapons of mass
    destruction and national missile defense efforts. The overall finding
    of the Congressional response demonstrated the Army National Guard
    requires an improved fixed wing cargo aircraft, with the minimum
    required capabilities defined in the Army's FWIS in order to support
    both weapons of mass destruction and national missile defense mission
    requirements. The Army has developed a new FW requirements document
    called The Fixed Wing Operational and Organizational Plan. This TRADOC
    and G3 approved document maintains the same minimum FW cargo aircraft
    requirements that were defined in the in the FWIS with some additional
    mandates.

                           C-23 SHERPA CARGO AIRCRAFT

        Question. Have you determined whether the C-23 Sherpa cargo
    aircraft currently operated by the Army National Guard can perform the
    missions identified in the Army National Guard Fixed Wing Study?
        Answer. The C-23 Sherpa does not meet any of the minimum required
    capabilities defined in the Army's Fixed Wing Operational and
    Organizational Plan. The C-23 does not adequately support mission
    requirements for weapons of mass destruction or national missile
    defense.
        Question. If you have determined that the C-23's performance
    limitations necessitate the procurement of a future aircraft capable of
    meeting projected mission requirements, please indicate whether you
    have identified such an aircraft.
        Answer. There are a few commercial off the shelf (COTS) fixed wing
    cargo aircraft available which are able to fully meet the Army's stated
    minimum performance requirements as well as meeting those critical
    mission requirements in support of homeland security and national
    missile defense. The Army National Guard does not have a research and
    development staff to specifically identify or provide the name of an
    aircraft that meets both the Army's mission demands and homeland
    security.
        Question. If you have, in fact, identified an aircraft that can
    better support the projected mission requirements identified in the
    July 2001 study, please state the funding level that would be required
    to support its initial procurement in fiscal year 2004.
        Answer. Shortly after the completion of the Congressional response,
    the National Guard general staff received an unsolicited bid for 44
    cargo aircraft that fully met all of the Army's minimum required cargo
    aircraft performance parameters. The unsolicited bid was for
    approximately $3.0 billion. As indicated in the bid, this cost included
    the complete life cycle funding, flying hours and maintenance for the
    44 aircraft over a 25 year period. It is not known if the bid and the
    offer are still valid or accurate for today's dollars.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                           C-23 SHERPA CARGO AIRCRAFT

        Question. The C-23 Sherpa, the Army's medium cargo fixed wing
    aircraft, experienced some shortfalls during operations in Iraq,
    including limitations for flight into icy conditions, lack of short
    takeoff and landing capability, and poor performance in high/hot
    conditions, lack of short takeoff and landing capability, and poor
    performance in high/hot locations. Does the Army National Guard have
    any plans to modernize or replace the C-23s?
        Answer. The C-23 was originally designed as a short distance
    commuter aircraft. As the Army's only tactical fixed wing cargo
    aircraft it has all of the performance limitations mentioned and more.
    The C-23 does not meet any of the Army's minimum cargo aircraft
    performance parameters as defined in the Fixed Wing Operational and
    Organizational Plan. The modernization of the Army National Guard C-23
    fixed wing aircraft is tied to Army modernization and funding.
    Currently, the Army has a small amount of money identified in the
    fiscal year 2009 time frame to look at a possible replacement FW cargo
    aircraft.

                        C-27J SPARTAN TACTICAL AIRCRAFT

        Question. Would the C-27J Spartan tactical lift aircraft provide a
    more capable alternative?
        Answer. The C-27J Spartan was designed and built as a tactical
    support aircraft. From what I understand, its capabilities meet all of
    the Army's stated minimum performance requirements and would greatly
    increase the Army National Guard's ability to perform its Federal and
    State missions including homeland security and national missile
    defense.
                                    Reserves

    STATEMENTS OF:
            LIEUTENANT GENERAL JAMES R. HELMLY, CHIEF, ARMY RESERVE
            VICE ADMIRAL JOHN B. TOTUSHEK, CHIEF, NAVAL RESERVE
            LIEUTENANT GENERAL DENNIS M. McCARTHY, CHIEF, MARINE FORCES
                RESERVE
            LIEUTENANT GENERAL JAMES E. SHERRARD III, CHIEF, AIR FORCE
                RESERVE

        Senator Stevens. We'll now call for the commanders of the
    Reserve forces to join us today. We have with us today
    Lieutenant General James Helmly, Chief of the Army Reserve,
    Vice Admiral John Totushek, Chief of the Naval Reserve,
    Lieutenant General Dennis McCarthy, Chief of the Marine Force
    Reserve, Lieutenant General Sherrard, Chief of the Air Force
    Reserve.
        I'm told that it would be proper for me to extend to you,
    Admiral, a bravo zulu. Well done. We understand this is your
    last appearance before us. We certainly wish you well in all
    your endeavors, and thank you for your service to our country.
        I assume the best way to proceed would be just in the order
    that I read the names, if that's agreeable, so we'll start with
    General Helmly, Chief of the Army Reserve.
        General Helmly. Thank you, Mr. Chairman, members of this
    distinguished subcommittee. I thank you again for the
    opportunity and the privilege to testify on behalf of the
    205,000 soldiers, 11,000 civilian employees, and their family
    members, all members of the United States Army Reserve.
        Today, as we speak, over 68,000 Army Reserve soldiers are
    mobilized throughout the world in America's global war on
    terrorism. They serve alongside their Army National Guard and
    active component counterparts courageously, skillfully, and
    proudly. These modern-day patriots have willingly answered the
    call to duty to perform the missions they've trained for and to
    honor their commitment as an indispensable component of the
    world's finest ground force, the United States Army.
        This committee, through its dedicated support of the
    soldiers in the Army Reserve has played a major and integral
    part in increasing the relevance and, indeed, strengthening the
    readiness of today's Army Reserve. Your concern, witnessed here
    today, for our people, our most precious resource, who dedicate
    a significant part of their lives to defending our Nation, in
    addition to honoring commitments to employers and families, as
    well as their communities, is evidenced by your invitation to
    review the present state of the Army Reserve. Thank you for
    that.
        One of our units, the 459th Multirole Bridge Company, based
    in Bridgeport, West Virginia, is a unit so honoring their
    commitment. This unit of 172 soldiers supported fact, the First
    Marine Expeditionary Force and similar to traveled first with
    the Marine Recon Battalion so that they could bridge the
    various rivers en route to Baghdad. This unit fought as
    infantry in a Marines firefight in al-Nasariya. One of the
    soldiers, a noncommissioned officer, Sergeant Paul Abernathy,
    remarked upon leaving al-Nasariya, we all signed up knowing
    that we might have to go do this. Now that we're here, you have
    to keep in mind this is our job as soldiers. We came to fight
    and win.
        I might add that they were proud to serve with the United
    States Marine Corps in this operation. It shows that we fight
    not only intracomponent, but also jointly amongst all the
    components, and with combined forces. But excelling in current
    missions is not sufficient by itself. It is also necessary that
    we concurrently confront today's challenges while preparing for
    tomorrow's.
        The Army must at all times maintain its nonnegotiable
    contract to fight and win the Nation's wars as we concurrently
    transform to become more strategically responsive and dominant
    across the spectrum of military operations. The concurrence of
    these dual challenges, transforming our force while fighting,
    winning, and preparing for today's wars, is the crux of our
    challenge today, transforming while concurrently at war.
        Today's war has mobilized 35.4 percent of the United States
    Army Reserve. That is far higher than the 27 percent of the
    Army Reserve mobilized for Operation Desert Shield/Desert
    Storm. Since 1996, we have averaged 9,265 Army Reserve soldiers
    mobilized annually. On December 31, 2002, we had approximately
    9,900 Army Reserve soldiers mobilized. Three months later we
    had over 69,000 mobilized. That is a vertical spike of
    unprecedented proportions in terms of the speed. You have
    alluded to that this morning.
        Since September 11, 2001, our world has changed
    drastically. The very nature of this global war on terrorism,
    long duration, very fluid and volatile at various places and
    times around the world, dictates that in fact major changes are
    required to practices, procedures, and policies related to how
    we organize, man, train, compensate, and mobilize for use the
    soldiers of the Army Reserve.
        What was once a force in Reserve has now become a full
    partner, indeed almost an auxiliary force, of the Army across
    the spectrum of operations needed to satisfy the demand and
    need for highly skilled, specialized soldiers and units. Our
    ability to remain relevant and responsive depends on the
    interoperability and condition of our equipment but principally
    and foremost on the training, readiness, and support welfare of
    our soldiers.
        We're grateful to the Congress and the Nation for
    supporting the Army Reserve and the centerpiece of our
    formations, our soldiers, the sons and daughters of America. I
    cannot in words express how very proud I am of our soldiers, as
    well as their families. They are in the hearts and prayers of a
    grateful Nation, and they will stay there until the job that we
    have come to finish is at hand.

                               PREPARED STATEMENT

        Thank you again, sir, for the opportunity to appear before
    you and the distinguished members of this subcommittee this
    morning, and I look forward to addressing any questions that
    you may have.
        [The statement follows:]

            Prepared Statement of Lieutenant General James R. Helmly

                                  INTRODUCTION

        Mr. Chairman, members of this distinguished subcommittee, thank you
    for the opportunity and the privilege to testify on behalf of the
    205,000 soldiers, 11,150 civilian employees, and their family members
    of the United States Army Reserve.
        Today, over 69,000 Army Reserve soldiers are mobilized in America's
    Global War on Terrorism, serving courageously and proudly around the
    world. These modern day patriots have willingly answered the call to
    duty to perform the missions they have trained for and to honor their
    commitment as part of a responsive and relevant force, an indispensable
    component of the world's finest ground force, the United States Army.
        This committee, through its dedicated support of the soldiers in
    the Army Reserve, has played a major part in increasing the relevance
    and strengthening the readiness of the Army Reserve. Your concern for
    the reserve soldier and employee who dedicates a significant part of
    his or her life to defending our nation, in addition to honoring
    commitments to employers and families, is evidenced by your invitation
    to review the present state of the United States Army Reserve. I am
    honored by that opportunity.
        The occasion to testify before this subcommittee comes at a time of
    profound importance and immense change in our nation's security
    environment, as well as dynamic change in the international political
    landscape and unprecedented improvements in technology that add
    significantly to both friendly and enemy military capabilities. We are
    engaged with a wily, determined enemy, intent on destroying our very
    way of life; confronting regional powers and potential use of weapons
    of mass destruction at home and abroad; and struggling with the
    challenges of how to secure our homeland while preserving our precious
    rights and freedoms. It is within this very challenging environment
    that the Army Reserve serves with excellence today.
        Excelling in current missions is not sufficient by itself. It is
    necessary that we concurrently confront today's challenges while
    preparing for tomorrow's. The Army must maintain its non-negotiable
    contract to fight and win the nation's wars as we concurrently
    transform to become more strategically responsive and dominant at every
    point on the spectrum of military operations. The concurrence of these
    dual challenges, transforming our force while fighting, winning, and
    preparing for other wars, is the crux of our challenge today--
    transforming while at war.
        This is my first opportunity to address this subcommittee as the
    Chief, Army Reserve. I am humbled and sobered by the responsibility
    bestowed to me. The Army Reserve is an organization that demonstrates
    its ability to be a full and equal partner, along with the Active
    Component of the Army and the Army National Guard, in being the most
    responsive dominant ground force the world has seen.
        The strength and goodness we bring to that partnership is drawn
    from the people who serve in our formations. The Army Reserve is the
    most ethnically and gender diverse force of all the armed services.
    Overall, ninety-two percent of our force holds high school diplomas.
    Our force consists of individuals who are community and industry
    leaders, highly trained and educated professionals, experts in their
    chosen field who give of their time and expertise to serve our nation.
        The Army Reserve has been in a continuous state of mobilization
    since December of 1995. Prior to that, our contributions to Desert
    Shield/Desert Storm numbered over 84,000 soldiers. The Army Reserve
    also mobilized over 2,000 soldiers in support of Operation Uphold
    Democracy in Haiti. Since 1996, the average number of soldiers
    mobilized has been 9,265 soldiers per year. Our soldiers are part of
    the rotational forces that are keeping the peace in Eastern Europe.
    Military police, medical and public affairs soldiers provide ongoing
    capabilities in Operation Joint Endeavor and Operation Joint Guardian
    in Bosnia and Kosovo. The depth of the current mobilization reflects a
    higher percentage of the force since Desert Shield/Desert Storm and
    still our soldiers are raising their hands to re-enlist in the Army
    Reserve, making our enlisted troop retention rates the best they have
    been since 1992.
        The attacks of September 11th intensified the pace of operations.
    Within hours of those attacks, the Army Reserve deployed a mortuary
    affairs company from Puerto Rico--a company that ten years earlier
    performed its mission with distinction in Desert Shield/Desert Storm--
    to deploy to the Pentagon to assist with searching and recovering the
    remains of the victims of the attack. They proved to be so invaluable
    to the recovery efforts that they did not return to their homes until
    September of 2002, after cataloging not only all of the personal
    effects of the dead but items from the Pentagon as well. It is worth
    noting that we prepared and deployed the unit in advance of a
    Presidential declaration of mobilization on Army Reserve training
    orders. To those who question the Army Reserve's ability to respond
    rapidly and completely to dynamic short notice missions, we are pleased
    to provide the 311th Mortuary Affairs Company's responsiveness as a
    case study. There are numerous other, similar examples as well.
        In downtown Manhattan, Army Reserve soldiers were also assisting
    with the recovery efforts after the attack on the World Trade Center.
    Emergency Preparedness Liaison Officers were on site shortly after the
    attack to assist with rescue and later, recovery efforts. Army Reserve
    units provided equipment, Army Reserve center space and other
    logistical support throughout the days and months that followed.
    Similarly, these responses were in advance of formal mobilization.
        This Global War on Terrorism is unique for Americans because its
    battlefronts include not only far-off places like Afghanistan and the
    Philippines but our own homeland. What was once a ``force in reserve''
    has become a full partner across the spectrum of operations to satisfy
    the demand and need for Army Reserve soldiers and units around the
    world. Wherever the Army committed forces in the world--Afghanistan,
    Uzbekistan, Pakistan, the Philippines, Kuwait, Iraq and here at home--
    Army Reserve soldiers are an integral part, providing critical
    specialized capabilities and augmentation.
        In the time that has followed those days, our military has been
    engaged in fighting the Global War on Terrorism around the world.
    Operation Anaconda in Afghanistan seriously impaired Al Qaeda's ability
    to continue to spread terror and ousted the Taliban. Civil Affairs
    units consisting of Army Reserve soldiers who possess civilian acquired
    and sustained skills in the fields of engineering, city planning, and
    education were deployed to the region to lead in establishing a free,
    functioning society. Numerous new schools were built and medical aid
    offered to the people of Afghanistan. These soldiers represent the
    goodwill and interests of the American people with every classroom they
    build and every skill they teach, every functioning society capability
    they help create, and every contact they make with the native
    population. And they are doing an incredible job.
        But despite the clear relevance and strength demonstrated by the
    aforementioned examples, we are, as an institution not without our
    challenges. It is necessary that we not only transform the institution,
    but we must also resource our requirements and transform the
    institution to even higher levels of readiness, responsiveness and
    capabilities. These resourcing requirements include recruiting and
    retention, family programs, information technology, anti-terrorism and
    force protection, equipment procurement and modernization, and facility
    revitalization.

                            RECRUITING AND RETENTION

        Recruiting and retention is an area of the highest importance to
    the Army Reserve and a volunteer force. Our responsibilities require
    the best soldiers America can provide. In this regard, we are most
    appreciative of the help your subcommittee has provided us. We would be
    remiss if we did not thank you for the attention you have paid to our
    recruiting needs in recent legislation. With your help we have met our
    recruiting mission for three straight years from 2000 to 2002. In
    fiscal year 2003, however, we are 213 accessions short of expected
    year-to-date mission. While cause for concern, I am not alarmed over
    this because we are at 102 percent strength.
        Although generally successful in overall mission numbers, we
    continue to experience difficulty in attracting and retaining qualified
    individuals in certain critical wartime specialties, particularly
    within the Army Medical Department. Your continued support on behalf of
    recruiting and retention incentives, allowing for innovative readiness
    training and the funding of continuing health and educational
    opportunities will help us with this difficult task.
        The Army Reserve, in partnership with the United States Army
    Accessions Command, conducted a thorough review of Army Reserve
    recruiting. This review has helped us forge a stronger relationship
    with the Accessions Command and has streamlined our processes to
    support the symbiotic relationship between recruiting and retention. To
    that end, we will seek to ensure that all Army Reserve soldiers are
    involved in recruiting and retention activities--we all are a part of
    the Army's accessions efforts. We are removing mission distracters
    allowing the Accessions Command to focus on their core competency of
    recruiting non-prior service applicants; we are focusing on life cycle
    personnel management for all categories of Army Reserve soldiers and
    our retention program seeks to reduce attrition, thereby improving
    readiness and reducing recruiting missions.
        During 2003, the responsibility for the entire prior service
    mission will transfer from the Accessions Command to the Army Reserve.
    Tenets of this transfer include: establishment of career crosswalk
    opportunities between recruiters and retention transition NCOs;
    localized recruiting, retention and transition support at Army Reserve
    units and increased commander awareness and involvement in recruiting
    and retention efforts.
        To support recruiting and retention, the Army Reserve relies on
    non-prior service and prior service enlistment bonuses, the Montgomery
    GI Bill Kicker and the Student Loan Repayment Program in combinations
    that attract soldiers to fill critical MOS and priority unit shortages.
    The Army Reserve must be able to provide a variety of enlistment and
    retention incentives, for both officer and enlisted personnel, in order
    to attract and retain quality soldiers. Fully funded incentive programs
    must be available to ensure success in attaining recruiting goals and
    maintaining critical shortages and skills.
        Our retention program is a success. Faced with an enlisted
    attrition rate of 37.5 percent at the end of fiscal year 1997, we
    adopted a corporate approach to retaining quality soldiers. Retention
    management was an internal staff responsibility before fiscal year
    1998. In a mostly mechanical approach to personnel management, strength
    managers simply calculated gains and losses and maintained volumes of
    statistical data. Unfortunately, this approach did nothing to focus
    commanders on their responsibility of retaining their most precious
    resource--our soldiers.
        The Army Reserve developed the Commander's Retention Program to
    correct this shortcoming. A crucial tenet of this program places
    responsibility and accountability for retention with commanders at
    every level of the organization. Commanders now have a direct mission
    to retain their soldiers and must develop annual retention plans.
    Additionally, first line leaders must ensure all soldiers are
    sponsored, receive delivery on promises made to them, and are provided
    quality training. In this way, the Commander's Retention Program
    ensures accountability because it establishes methods and standards and
    provides a means to measure and evaluate every commander's performance.
    Since the introduction of the Commander's Retention Program, the Army
    Reserve has reduced enlisted Troop Program Unit attrition by nearly
    nine percentage points. The enlisted attrition rate in fiscal year 2002
    was 27 percent. Current projection for fiscal year 2003 is an increase
    of 28.6 percent, due to projected demobilization, the Commander's
    Retention Program, and increased retirements.
        The Army Reserve is experiencing a 4,200 company grade officer
    shortfall. Retention goals focus commanders and first line leaders on
    junior officers. The establishment of a sound leader development
    program is a cornerstone of Army Reserve Transformation. Providing
    young leaders the opportunity for school training and practiced
    leadership will retain these officers. A transformed assignment policy
    will enhance promotion and leader development. Increased Army Reserve
    involvement in transitioning officers from active duty directly into
    Army Reserve units will keep young officers interested in continuing
    their Army career. Allowing managed flexibility during their transition
    to civilian life will be a win for the Army and the officer.
        Overall, the Army Reserve successfully accomplished the fiscal year
    2002 recruiting mission while achieving the Department of the Army and
    Department of Defense quality marks. This year our enlisted recruiting
    mission will stabilize at approximately 20,000 non-prior service due to
    the success of our retention efforts. The accomplishment of the
    recruiting mission will demand a large investment in time on the part
    of our commander's, our retention NCOs, and our recruiters as they are
    personally involved in attracting the young people in their communities
    to their units.
        However, the same environmental pressures that make non-prior
    service recruiting and retention difficult affect prior service
    accessions. With the defense drawdown we have seen a corresponding
    decrease in the available prior service market in the Individual Ready
    Reserve. This impacts Army training costs, due to the increased
    reliance on the non-prior service market, and an overall loss of
    knowledge and experience when soldiers are not transitioned to the Army
    Reserve. Consequently, the Army Reserve's future ability to recruit and
    retain quality soldiers will continue to be critically dependent on
    maintaining competitive compensation and benefits.
        Special attention needs to be placed on the recruiting budget, for
    advertising, to meet our requirements in the next several years. Young
    people of today need to be made aware of the unique opportunities
    available in the different military components. The best way to get
    this message out is to advertise through the mass media. Funding our
    critical advertising needs is imperative if we are to be honestly
    expected to meet our recruiting goals. Your continued support of our
    efforts to recruit and retain quality soldiers is essential if we are
    to be successful.

    Family Programs
        Family programs provide invaluable family assistance during
    peacetime and mobilization, to include training for family program
    directors and volunteers in support of family readiness activities.
    These volunteers and contract employees provide information referral
    and outreach to family members and deployed soldiers. Within this
    system are twenty-five contractors serving in Family Program Director
    positions whose duties include aiding in promoting families' awareness
    of benefits and entitlements, orienting family members to Army Reserve
    systems, programs, and way of life. These directors also assist in the
    deployment of unit Family Readiness Groups during peacetime and
    deployment.
        In preparation for mobilization deployment, these volunteers and
    service members provide an extensive briefing for both families as well
    as members. These family services include briefings by members of the
    Chaplains Corps who explain what happens to spouses or families upon
    separation. We also provide briefings when the service member returns
    and coach the family members to expect changes upon the soldier's
    return to home.
        During Desert Shield/Desert Storm Army Reserve family readiness
    programs were sparse. Today, these programs are extensive, and they are
    working to provide refuge and support network for our families. We have
    been able to meet the needs of our deployed soldiers of which about
    4,000 Army Reserve soldiers are on a second consecutive year of
    mobilization. We are anticipating challenges in the future.

    Information Technology

                Network Service/Data Center
        The Army Reserve is redesigning its information technology
    infrastructure to support the Global War on Terrorism and greatly
    increase the survivability of our information technology infrastructure
    in the event of a cyber or physical attack. This redesigned
    infrastructure will establish a network service/data center which
    supports the Continental United States. A robust provision of network
    defense for protection at the consolidated and interconnected sites
    will be integral to the redesign and creation of the network service/
    data centers.
        Our plan to establish a Reserve component network and data center
    would give the Army Reserve the capability to manage dissemination of
    information supporting command and control concerning mobilization,
    training and overall data exchange as well as Joint and Army wide
    information technology systems.

                Secure Communications
        Secure communications ensures the protection and sustainment of the
    Army Reserve's information and information systems during peacetime,
    war and national emergencies. The geographic dispersion of the Army
    Reserve makes telecommunication services the primary means of
    conducting command and control, mobilization timelines, training data
    exchange, and ``reach back'' capabilities in support of the combatant
    commands. The Army Reserve is challenged to expand applications and
    service demands, increased security requirements and increased network
    capability to ensure throughput and reliable connectivity.
        With this redesign, the Army Reserve would have the technological
    capability to sustain existing Army systems or field any new Army
    systems to meet readiness requirements, manage timely dissemination of
    information supporting command and control in the areas of
    mobilization, training, and overall data exchange.
    Antiterrorism and Force Protection
        Security and preparedness to meet the known and unknown threats
    facing Army Reserve installation and facilities worldwide are an
    integrated set of three distinct programs: Antiterrorism, Force
    Protection, and Installation Preparedness.
        Antiterrorism is the foundation of the overall Force Protection
    program within the Army Reserve. It assesses vulnerabilities at stand
    alone facilities and Army Reserve installations.
        Force Protection programs correct, upgrade, and repair facilities
    in accordance with Department of Defense Antiterrorism and Force
    Protection construction standards. This program also determines the
    level of access to installations and facilities within the Army
    Reserve.
        Installation Preparedness concentrates on training and equipment
    for first responders such as fire, police and emergency services to
    weapons of mass destruction incidents near or at Army Reserve
    installations and facilities.
        The Army Reserve is challenged with its existing military and
    civilian manpower structure as well with its capability to adequately
    plan, execute and assess this real world critical program at all
    levels. Therefore, we must expand contract requirements for
    antiterrorism vulnerability assessments, exercise planning, and
    training for the entire Army Reserve.
        Currently, the Army Reserve is able to restrict access to its
    installations, but sustainment of access control combined with
    additional security requirements since the Global War on Terror has
    become a challenge. Funding of these programs will allow the Army
    Reserve to meet security and preparedness for threats facing Army
    Reserve installation and facilities worldwide.

    Equipment procurement and modernization
        Increasing demands placed on the Army Reserve highlight the
    importance of equipment that is mission-essential. In addition, the
    increased use of Reserve forces in operational missions and the Global
    War on Terrorism has highlighted the importance of having compatible
    and modern equipment. In order for our soldiers to be able to
    seamlessly integrate on the battlefield, our equipment must be
    operationally and technically compatible. Without complete
    interoperability, the ability of the Army Reserve to accomplish its
    Combat Support and Combat Service Support missions would be diminished.
        Combat support and combat service support transformation is a vital
    link to the Army Transformation Plan. The Army Reserve is the main
    provider of this capability for the Army and the Army must continue to
    modernize the Reserve components along a timeline that ensures the
    Reserve components remain interoperable and compatible with the Active
    component.
        Equipment modernization of the Army Reserve is indispensable in
    meeting the goals of the Army's Transformation Campaign Plan. Full
    integration into the Army's modernization plan to implement force
    interoperability enables our units to deliver required Combat Service
    and Combat Service Support ensuring our Army's operational success.
        In the Army's Combat Service and Combat Service Support
    Transformation Plan, key enablers are identified to meet the deployment
    vision outlined by the CSA. These enablers help to reduce the Army's
    Combat Service and Combat Service Support Demand on Lift and Logistical
    Footprint requirements while increasing strategic responsiveness. To
    reduce the Combat Service and Combat Service Support Demand on Lift and
    Footprint, investments are required in the appropriate Army Reserve
    Combat Service and Combat Service Support Enablers.
        The Army Reserve has 20 percent of Combat Support and 47 percent of
    the Combat Service Support requirements in the Army. We must have these
    enablers on hand to support the Army's Combat Service and Combat
    Service Support Transformation Strategy.

    Facility revitalization
        The Army Reserve installation community proudly sustains two of the
    Army's major installations and 12 Regional Support Commands. These
    regional commands function as ``virtual installations'' with facilities
    in 1,300 communities across all 50 states, most United States
    territories, and in Europe.
        Our primary facilities, Army Reserve centers, are prominent symbols
    of The Army on ``Main Street America''. They often create the very
    first impressions of the entire Army and present a permanent
    ``billboard'' for all Americans to see. Unfortunately, most Army
    Reserve facilities consist of 1950's era structures that remain
    virtually the same as when they were constructed. They are sorely in
    need of modernization or, as in most cases, replacement.
        Army Reserve soldiers train in widely dispersed reserve centers and
    support facilities worldwide that use 45 million square feet. This
    equates to more square footage than Forts Hood, Sill and Belvoir
    combined. Our facilities experience the same type of challenges active
    Army posts do. The impacts of poor facility conditions are even more
    acute for our soldiers. Overcrowded, inadequate and poorly maintained
    facilities seriously degrade our ability to train and sustain units as
    well as decay soldier morale and esprit de corps.

    Transformation
        Clearly, our priorities and the way we approach national security
    changed. We must and will win the war on Terrorism. But the nature of
    this war dictates that major changes are required to practices,
    procedures and policies relating to use of our force. The processes and
    policies in place were designed for a different time and a different
    type of war than we are engaged in today. As a result, some have
    challenged our ability to respond early in a contingency operation, and
    to sustain continuous mobilization while continuing to attract and
    retain quality young men and women such as the ones who currently
    populate our force. I challenge this assertion.
        The Army Reserve is preparing changes to training, readiness and
    policies, practices and procedures. We are restructuring how we train
    and grow leaders within the Army Reserve by establishing a Trainee,
    Transient, Holdee, and Student Account, much like the Active Army, to
    manage our force more effectively. We are preparing implementation
    plans for the continuum of service concept recently proposed by the
    Office of the Secretary of Defense that would allow ease of movement
    between Army components as dictated not only by the needs of the Army
    but also by what is best for the soldier developmentally and
    educationally. We are excited by the potential of such proposals.
        A challenge to realizing the capabilities and potential of our
    highly skilled, loyal and sacrificing soldiers is a antiquated Cold-War
    era mobilization process. The nation's existing mobilization process is
    designed to support a linear, gradual build-up of large numbers of
    forces and equipment and expansion of the industrial base over time. It
    follows a construct of war plans for various threat-based scenarios. It
    was designed for a world that no longer exists. Today, multiple,
    operational requirements, unclear, uncertain, and dynamic alliances and
    the need for agile, swift, and decisive combat power, forward presence
    in more responsive ways, and smaller-scale contingency operations,
    demand a fundamentally different approach to the design, use, and
    rotation of the Army Reserve. Rather than a ``force in reserve'', it
    has become and serves more as a force of discreet specialized, skill
    rich capabilities and a building block for teams and units of
    capabilities, all essential to force generation and sustainment. The
    process to access and employ these forces must be streamlined,
    flexible, and responsive to the President and Nation's needs yet
    considerate and supportive of the soldier, family and civilian
    employer.
        There is an ongoing debate concerning the wisdom of reliance on the
    nation's Reserve components both for operations of a smaller scale
    nature, such as the Balkans rotations and early reliance in the opening
    phases of a contingency operation. Only thirty-three percent of the
    Army Reserve troop strength is currently mobilized. But raw troop
    strength numbers are not an accurate indication. Often, Army Reserve
    capabilities in Civil Affairs and Medical support are cited as but two
    of many examples of over reliance on the reserve components. There are
    specific types of units that have been used more than others. The
    demand for certain type units to meet the mission requirements of the
    Global War on Terrorism is higher in some more than others. Military
    Police, Civil Affairs, Military Intelligence, Transportation and
    Biological Detection and Surveillance capabilities are the highest in
    utilization. As an example, the Biological Detection and Surveillance
    units consist of one Active component unit and one Army Reserve unit.
    The Army Reserve unit has mobilized five times since 1997 and is
    currently in their second year of mobilization. A second Army Reserve
    unit will be organized this month and is prepared to mobilize by the
    fall of this year. There are future plans for additional such units in
    both the Army Reserve and the active component. This is but one example
    of a high demand, low density unit. Currently, 313 Standard Requirement
    Codes (types of units) are exclusively in the Army Reserve. The Army
    Reserve has been able to meet the challenges to date with this
    structure but clearly the structure requires change to meet the
    continuing demand for these skill rich capabilities which are more
    practical to sustain in a reserve component force.
        The Army Reserve has been transforming its force since 1993 when it
    reorganized to produce a smaller, more efficient and effective
    structure. Our overall strength was reduced by 114,000 soldiers, or
    thirty-six percent, leaving us with a 205,000 soldier end strength
    today. In our transformation from a Legacy Force Army Reserve (or a
    Cold War Force) to an Interim Force, we are poised to put changes in
    place that will keep us moving on the path of transformation to the
    Objective Force. In the 1990s, we cut the number of our Army Reserve
    Commands by more than half and re-invested that structure into
    capabilities such as medical and garrison support units as well as
    Joint Reserve Units. We reduced the number of our training formations
    by 41 percent and streamlined our training divisions to better meet the
    needs of the Army and its soldiers. Our transformation journey actually
    began ten years ago and is accelerating rapidly today.
        Changing the way we mobilize starts with changing the way we
    prepare for mobilization. The current process is to alert a unit for
    mobilization, conduct the administrative readiness portion at home
    station and then send the unit to the mobilization station for further
    administrative and logistical preparedness and to train for deployment.
    This process, alert-mobilize-train-deploy, while successful in Desert
    Shield/Desert Storm, today inhibits responsiveness. By changing to
    train-alert-deploy, and performing the administrative and logistical
    requirements prior to mobilization, we will reduce the time needed to
    bring a unit to a campaign quality level needed for operations.
        The Army Reserve is the nation's repository of experience,
    expertise and vision regarding soldier and unit mobilization. We do
    have forces capable of mobilizing in twenty-four hours and moving to
    the mobilization station within forty-eight hours, as we did in
    response to September 11th. This demonstration of quick and precise
    mobilization ability will become institutionalized in the processes and
    systems of the future and give our forces the ability to mobilize
    rapidly and smoothly. We will overcome challenges posed by units manned
    with untrained soldiers through initiatives that strengthen soldier
    readiness and leader development.
        While changing industrial age mobilization and personnel training
    and development policies is necessary, restructuring our force so that
    we can implement predictable and sustainable rotations based upon depth
    in capability is also necessary. Predictable and sustainable
    utilization is a key factor in soldier, family, and civilian employer
    support. One of the goals of transforming our force is to change
    policies that are harmful to soldiers and families. Predictable
    rotation schedules will allow the Army Reserve to continue to be a
    value-added source of skill rich capabilities for small-scale
    contingency conflicts and follow-on operations. It will provide our
    units with operational experience; provide a sense of fulfillment for
    our soldiers; impart a sense of predictability for our soldiers and
    evens out the work load across the force. We must begin now to
    implement new strategies to build a force with rotational capabilities.
    Individual Augmentee Program
        Under the current Army posture, there is a growing need to
    establish a capability-based pool of individual soldiers across a range
    of specialties who are readily available, organized, and trained for
    mobilization and deployment as Individual Augmentees. In spite of
    numerous force structure initiatives designed to man early deploying
    Active Army and Reserve component units at the highest possible levels,
    a requirement remains for individual specialists for unforeseen,
    unplanned-for-contingencies, operations, and exercises. Therefore, I
    have directed the establishment of an Individual Augmentee Program
    within the Selected Reserve to meet these needs.
        The purpose of the Individual Augmentee Program is to meet real-
    world combatant commander requirements as validated in the Worldwide
    Individual Augmentation System (WIAS). Additionally, this program will
    preclude the deployment of individual capabilities from active or
    reserve component units adversely impacting their readiness, cohesion,
    and future employment possibilities. It will allow soldiers to
    participate at several levels of commitment and supports the Office of
    the Secretary of Defense proposal for a continuum of service.
        Continuum of service offers the Army flexibility in accessing and
    managing personnel. Soldiers can serve through a lifetime in different
    ways from active duty to troop program unit to individual augmentee to
    retiree. The ability to move seamlessly through components and statuses
    can only benefit the Army and the soldier. Matching the right soldier
    in the right status at the right time makes sense. The Army Reserve
    will lead the way in making a reality of the phrase ``Once a Soldier,
    Always a Soldier''.
        Our initiatives concerning the management of individuals in the
    Army Reserve are the catalyst of Army Reserve Transformation--The
    Federal Reserve Restructuring Initiative. In order for the Army Reserve
    to continue to transform, six imperatives must be implemented. These
    imperatives are: re-engineer the mobilization process; transform Army
    Reserve command and control; remove unready units; implement human
    resources life cycle management, build a rotational base in our force;
    and re-engineer individual capabilities.
        The Chief of Staff, Army has stated that the engine of
    transformation is our people. Our Army Reserve transformation plan
    attacks directly those outdated, unresponsive policies, practices, and
    procedures that inhibit our people's ability to transform. Your
    awareness and Congressional support of our efforts is invaluable.

                                    SUMMARY

        In our current military environment, the Army Reserve has many
    challenges that we accept without hesitation. These challenges are
    embedded in the current wisdom of early reliance on the reserve
    component in early contingency operations and the wisdom of the use of
    the reserve components in scheduled operational rotations such as
    Bosnia and Kosovo. Historically our nation has placed great reliance on
    the reserve components of soldiers, sailors, airmen and marines, to
    expand the armed forces for operations during time of war. The nature
    of warfare has changed drastically and we must also change. This Global
    War on Terrorism, as our President has described, is a long-term
    campaign of inestimable duration, fought in many different places
    around the world. The issues we have brought to you today--changing how
    we recruit, prepare, maintain, and resource our force recognizes the
    Commander-in-Chief's intent, to prepare for future wars of unknown
    duration, in places we have yet to fight, and against enemies who
    threaten our freedoms and security.
        We are grateful to the Congress and the Nation for supporting the
    Army Reserve and our most precious resource, our soldiers--the sons and
    daughters of America.
        I cannot adequately express how proud I am of our soldiers. They
    are in the hearts and prayers of a grateful nation and will continue to
    stay there until we finish the job at hand.
        Thank you.

        Senator Stevens. Thank you, General. Admiral.

                   STATEMENT OF VICE ADMIRAL JOHN B. TOTUSHEK

        Admiral Totushek. Thank you, Mr. Chairman, and thank you on
    a personal note for the kind words about my service to the
    country. I'm just humbled and proud to be representing the
    88,000 men and women of the Naval Reserve Force, and I would
    tell you that they have once again stood forth, just as the
    other component members have, when the Nation needed them.
        I'd like to talk a little bit about the Naval Reserve Force
    as a whole, just talk about a couple of things you've already
    brought up. The first is the overuse issue. It seems to me that
    perhaps, rather than changing the numbers in the active
    component and reserve component mix, perhaps we need to be
    looking at the mission areas so that we don't recall people
    year after year after year.
        In the Naval Reserve we've done a pretty good job of doing
    that, and the data that we have, which is current as of the end
    of AEF--OEF, I'm sorry--shows that the people that have been
    mobilized actually have a higher retention rate than those
    people that have not been mobilized, so at least for the Naval
    Reserve Force, as of current, after the Afghanistan operation,
    we have not seen, and the data reflects about a 50 percent
    better attrition rate, if you will, than the people that are
    just doing their time, if you will, drilling. I think that
    shows us that the men and women of the Naval Reserve Force at
    least, and I would expect the other components as well, are
    willing to serve and, in fact, are expecting to serve a little
    bit more differently than they have in the past, and I would
    just ask that as we think about the way we're going to try to
    structure the military of the future, that we don't try to put
    a one-size-fits all, or put too many constraints on us that
    prevents us from doing our mission, or allowing our people to
    serve.
        The second thing is that we've heard some talk about the
    fact that it's not a good idea to have 100 percent of any
    capability in the reserve component, because that would also
    suggest that we would be overusing them. The Naval Reserve has
    several capabilities that we do the entire mission for the
    Navy. One of the good examples is our intratheater airlift. All
    the transport airplanes that we have, if you see an airplane
    that says Navy on the side, it's either carrying people or
    cargo, that's a Naval Reserve airplane.
        Once again, during Operation Iraqi Freedom, we did
    wonderfully well there, bolstering the support to the theater
    by about 300 percent, and we did much of it without
    mobilization. Much of it was on a volunteer and a detachment
    type of basis, so I think we have proven over and over again
    that we can do that mission for the Navy cheaper, better, and
    with more expediency than even trying to outsource this would
    be able to do, and I would just ask us to keep that in mind as
    well, that there are certain missions that are perfect for the
    reserve components.
        Lastly, I'd like to talk about the length of time it takes
    to mobilize. We all expect and would like to give our members
    as much notice as we can, but in these times when we are at
    war, I think everybody understands that if it is a quick
    mobilization, that there are some instances where that is
    necessary, and our people are willing to sign up for that as
    long as it isn't the usual case. If we can plan, as the other
    commanders have pointed out, on a regular basis, and then
    perhaps understand that once in a while it's going to be now,
    people will understand that.
        I, too, would tell you that just like the other component
    commanders, the employers and the families of our people have
    been very, very important to us. We've taken steps in both
    cases to make sure that those equities are recognized, and I
    would tell you that by and large all of those families are
    standing up and doing a wonderful job, just as our people have.

                               PREPARED STATEMENT

        Thank you very much for our continued support. I look
    forward to your questions.
        [The statement follows:]
              Prepared Statement of Vice Admiral John B. Totushek
        It has been a remarkably challenging and successful past year for
    the Naval Reserve. We are continuing at an unprecedented pace in
    support of the war on terrorism, while at the same time navigating the
    Naval Reserve through the complex process of Transformation. Today,
    Navy's ability to surge rapidly and decisively to new crisis points
    rests primarily on active force capabilities with some Naval Reserve
    augmentation. Yet, any new crisis could potentially strain Navy's
    ability to sustain existing commitments, thus increasing the value of
    maintaining--and using, when needed--flexible operational capabilities
    resident in the Naval Reserve.

        ----------------------------------------------------------------

        The Naval Reserve provides Navy with necessary operational and
    organizational agility
      --Operational readiness
      --Parallel capability--reinforcing/sustaining/optimizing for crisis
      --Incubating new capabilities
      --Stand alone missions

        ----------------------------------------------------------------

        We ask a lot from our individual Reservists. And they have
    responded heroically. As Operations Noble Eagle and Iraqi Freedom
    demonstrate, mobilized Naval Reserve capabilities are often required to
    meet the risks associated with surge, and to sustain Navy commitments.
    Despite various opinions to the contrary, my Reserve Force has not been
    overtasked during the continuing Global War on Terrorism. We've
    recalled nearly 19,000 Naval Reservists to-date, or approximately 25
    percent of our force. We've recalled entire commissioned units as well
    as individuals with unique skills. While attrition across my force has
    been averaging in the high 20 percentile, our Career Decision Surveys
    targeted to those personnel demobilizing indicate that their attrition
    is holding at a mere 12 percent. We are confident that we have policies
    in place to manage and mitigate the strains we place on our Sailors and
    their employers. The bottom line is that Naval Reserve personnel are
    staying Navy, and we were able to reduce our enlisted recruiting goal
    by 2,000 endstrength this year.

        ----------------------------------------------------------------

        The Naval Reserve: a proven source of Navy flexibility
      --Mobilization for war or contingency
      --Relieving stress on active PERSTEMPO
      --War fighting and support capability at reduced cost

        ----------------------------------------------------------------

        Observing the work performed by our Naval Reservists over the past
    year, I have concluded that heroes are just ordinary people who do
    extraordinary things.
        Among the Naval Reserve heroes who represent the extraordinary
    sacrifices made by all of our members in support of Operations Enduring
    Freedom, Noble Eagle and Iraqi Freedom are people such as these:
      --Commander Neal Bundo, from Crofton, Maryland, and members of Navy
            Command Center Unit 106 at the Pentagon mobilized and drilled
            around-the-clock to maintain the watch in the aftermath of the
            destruction of the center and the murder of fellow Sailors.
      --Utilityman Second Class Marianne Johnson, who lives in San Diego
            and is a single parent of two daughters and an accounts
            receivable clerk for Pepsi. She was mobilized to Pearl Harbor
            with Construction Battalion Maintenance Unit 303 to provide
            security support for Commander, Navy Region Hawaii. Although
            she could have waived her commitment, she arranged for a friend
            to take her apartment and temporary custody of her children for
            a whole year.
        And there are Naval Reserve heroes among the spouses of our
    reservists.
      --The husband of Susan Van Cleve was also recalled with Construction
            Battalion Maintenance Unit 303. Without any formal Ombudsman
            training, Mrs. Van Cleve took on the task of representing the
            dependents and relatives of more than 180 mobilized Seabees.
            What's remarkable is that the Van Cleves, from Lake Elsinore,
            California, have five children at home under age five.
        Ordinary people. Summoned to do extraordinary things. I call them
    heroes. Anyone associated with the Reserve Components of this nation
    could go on and on with such stories because there are thousands of
    them. They are the people whose dedication we honor and must support.
        We are at the height of the mobilization in support of Operations
    Noble Eagle, Enduring Freedom, and Iraqi Freedom, with more than 12,000
    sailors providing support around the world today. A perfect example of
    this is Strike Fighter Squadron (VFA) 201, based at Naval Air Station
    Joint Reserve Base, Fort Worth, Texas, which was ordered to active duty
    by President George W. Bush, as a unit of Carrier Air Wing (CVW) 8
    embarked aboard the USS Theodore Roosevelt (CVN 71). Reports indicate
    that the ``Hunters'' of VFA 201 are leading the Air Wing in every
    measurable category.
        The majority of Naval Reservists that have been mobilized are
    individuals with unique specialties. They included significant numbers
    of law enforcement officers and security specialists. Medical, supply,
    intelligence and other specialties continue to be heavily tasked.
    Entire units of the Naval Coastal Warfare commands were activated.
        Naval Reserve fighter pilots flew combat air patrol over our great
    cities. P-3C Orion pilots and crews are still flying surveillance
    missions. Logistics aircraft crews maintain a continuous presence in
    Bahrain and their operations tempo has increased by 25 percent, most of
    which is being done without mobilization.
        Top Five Priorities.--And while our deckplate sailors continue
    training to support combatant commanders, at the headquarters level we
    are still adhering to our Top Five priorities for the Naval Reserve.
    Let me briefly review highlights of these goals to illustrate how we
    are making progress.

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        The Fiscal Year 2003 Top Five Priorities for the Naval Reserve
      --Manpower
      --Training
      --Equipment & Information Technology Compatibility
      --Force Shaping
      --Fleet Support

        ----------------------------------------------------------------

        Manpower.--Our recruiting numbers look good, and we are meeting
    goal. A continuing challenge is to fill targeted rates. While we
    initially saw that the percentage of prior service Navy entering the
    Naval Reserve bottomed out after 9/11, it quickly rebounded, and we
    finished the year over end strength. Our attrition rate hovers near 25
    percent, sharply down from a few years ago but short of our goal of 22
    percent. One major improvement is that we are consolidating our
    recruiting efforts with the active Navy and expect that benefits will
    accrue to both.
        Training.--Our training emphasis is on supporting the Chief of
    Naval Operation's Task Force Excel and Commander, Naval Education and
    Training, through integration of Naval Reserve personnel at all levels
    in the Navy Training Organization. This integration will enable the
    Naval Reserve to be in a position to take advantage of training
    initiatives underway throughout the Navy. We are also providing Joint
    Professional Military Education and ultimately building a cadre of
    Reserve Officers with joint experience and designated as Fully Joint
    Qualified. This will involve working closely with joint gaining
    commands to identify billets requiring joint experience to be filled by
    Reserve Officers, an opportunity that has previously been non-existent.
    Additionally, in order to take advantage of current and future training
    available through Distance Learning, we have been working hard to
    develop and implement a policy to provide drill pay to those personnel
    completing Distance Learning courseware at the direction of their
    Commanding Officer.
        Equipment and Information Technology Compatibility.--In fiscal year
    2004 we see a continuation of the decline in procurement of equipment
    for the Naval Reserve. Total Naval Reserve equipment procurement
    steadily decreased from $229 million in fiscal year 1997 to about $91
    million in fiscal year 2003.
        Among the few bright spots in the fiscal year 2004 equipment budget
    is funding for the acquisition of one new C-40A logistics aircraft.
    These aircraft are of vital importance to fleet logistics since the
    Naval Reserve provides 100 percent of the Navy's organic lift
    capability and direct logistics support for combatant commanders in all
    operating theaters. In addition, the fiscal year 2004 budget calls for
    the procurement of another C-40A aircraft.
        Other programs slated to receive procurement funding in the fiscal
    year 2004 budget include: the C-130T Aviation Modernization Program
    that will make 18 logistics aircraft compliant to fly worldwide;
    surveillance equipment upgrades and small boats for Naval Coastal
    Warfare forces; and ground and communication equipment for the Naval
    Construction Force.
        Despite these welcome Reserve modernization efforts, essential F/A-
    18 modifications, P-3C upgrades, and SH-60B helicopters still require
    substantial investments. Currently one squadron of Reserve F/A-18A
    aircraft lack the capability to deliver precision-guided munitions and
    need ECP-560 upgrades to avionics, software and accessories. Under the
    Navy-Marine Corps TACAIR integration plan, a Naval Reserve squadron is
    slated for disestablishment in fiscal year 2004.
        P-3C aircraft used by the Naval Reserve constitute approximately 40
    percent of the Navy's capability. Currently, these aircraft provide
    only limited support to operational commanders because they lack the
    Aircraft Improvement Program (AIP) upgrade. Active component AIP
    aircraft were used extensively in Afghanistan due to their improved
    communication and surveillance capabilities. To enable our P-3C
    squadrons to fully participate and integrate with the active component
    in support of operational requirements, an investment needs to be made
    to upgrade our 42 P-3C aircraft in the Naval Reserve's seven P-3C
    squadrons. Improving Reserve squadron integration with active forces
    will reduce active component's operational tempo and increase overall
    Navy mission capability. Spending to achieve equipment compatibility
    and equivalent capability between active and Reserve components is
    always a wise investment. Finally, the Littoral Surveillance System
    (LSS) provides timely assured receipt of all-weather, day/night
    maritime and littoral intelligence, surveillance and reconnaissance
    data. For fiscal year 2003, Congress appropriated funds for a second
    LSS to support Naval Coastal Warfare. I'm encouraged that the emerging
    Homeland Security requirement to secure land and sea borders from
    potential terrorist attack is an emerging mission to which LSS
    capability can contribute. It is joint, transformational, and is
    consistent with Naval Reserve capabilities. I look forward to working
    with our Coast Guard friends in assisting them in protecting our
    coastal waters and ports.
        In the Information Technology area, we have implemented the New
    Order Writing System (NOWS) online, and it is up and running smoothly.
    Within budget constraints, we continue with implementation of the Navy
    Marine Corps Intranet (NMCI). By the end of 2003, 100 percent of the
    Naval Reserve Force will be on the NMCI. Our goal is a seamless
    information and communication systems integration between the active
    Navy and the Naval Reserve. To meet our primary mission of delivering
    sailors, equipment and units to combatant commanders requires
    information technology improvements in the manpower, personnel,
    communications, training and financial management areas.
        Force Shaping.--On July 20, 2002, the Naval Reserve stood up the
    Naval Reserve Forces Command. In doing so, it eliminated the old title
    of Commander Naval Surface Reserve Force and merged separate Naval
    Reserve air and surface chains of command. This ongoing alignment,
    which is examining every facet of Naval Reserve operations--is making
    the Naval Reserve more flexible and responsive, improving its systems
    and focusing on customer service. The alignment of the New Orleans
    headquarters staff allows one-stop shopping for the active duty Navy to
    reach the Naval Reserve Force and has provided additional full time
    support to the fleet.
        Fleet Support.--Earlier I mentioned the direct support we have been
    providing to combatant commanders, and we are prepared to do more.
    While we continue monitoring potential risks of sustained and repeated
    recalls, to date we have seen improved retention rates of recallees
    measured against the rest of the force. Every one of our 86,000 Naval
    Reservists wants to participate in winning the war on terrorism. We
    must ensure that they have the tools to do their jobs and integrate
    smoothly into the Fleet.
        Transformation.--Within the think tanks of Washington and in the
    Pentagon E-Ring hallways, there is much talk about how the Navy will
    participate in the DOD-wide Transformation process. And though the
    Naval Reserve's traditional mission of reinforcing active forces and
    sustaining capabilities has always been valid, there are additional
    ways in which we can support Transformation.
        The Naval Reserve is the ``flex'' Navy needs to navigate, and even
    accelerate its passage through a challenging and uncertain future. As
    it did throughout the Cold War, Post-Desert Storm and Post 9/11
    periods, the Navy will continue to depend on its Reserve as a
    mobilization asset, affordably extending Navy's operational
    availability. At the same time, the Navy will continue to rely on Naval
    Reserve units and individuals to provide day-to-day peacetime'
    operational capabilities and to reduce the stress on active personnel
    tempo. The extensive operational warfighting and service support
    experience resident in the Naval Reserve will be crucial to assisting
    Navy in achieving its Sea Strike, Sea Shield and Sea Basing
    capabilities.
        Some of our terminology will change as we transform. We no longer
    talk about CINCs; we talk about combatant commanders. We don't talk
    about TARs; we talk about Full Time Support personnel. We're not using
    the phrase Total Force, but we are talking about a transformational
    force that is simply one Navy.
        The Navy is shaping itself in the 21st century in an environment of
    competitive resources, fluid planning assumptions, and operational
    uncertainty. As it begins the transformation, the Navy is also fighting
    the war on terrorism and maintaining a challenging global forward
    presence. Juggling such priorities involves risk.
        The Naval Reserve's traditional function as a reservoir of
    capabilities that are not needed continuously in peacetime, but are
    needed in crisis, is crucial to mitigate such risks.
        As one example, Naval Coastal Warfare forces have been called upon
    to provide a security framework on the home front as well as overseas.
    The mission--protection of strategic shipping, shallow water intrusion
    detection, traffic control, and harbor defense--has resided exclusively
    in the Naval Reserve for more than 10 years. Today, this force
    protection presence is made up of 100 percent Naval Reservists, who
    conduct fully integrated command, control, communications, surveillance
    and harbor defense missions around the globe. Because these are ongoing
    requirements in this mission area, we will be integrating an active
    Mobile Security Force with existing Naval Reserve Coastal Warfare
    forces.
        Another example is also tied to the aftermath of 9/11: the
    immediate requirement for Master-at-Arms and law enforcement specialist
    to provide force protection to the Navy. This was a very small mission
    area for the Navy that, when the need arose, they were unable to fill
    with active duty Sailors. The Naval Reserve took care of the
    requirement until the Navy could implement long-term measures.
        However, the Naval Reserve can do more. Our agility can spread
    across a spectrum of other challenging areas: manpower, operations,
    planning, force structure and mix. We can be a great reservoir for
    experimentation and innovation. In these and many other ways, the Naval
    Reserve can mirror and complement the Chief of Naval Operation's
    visions in Sea Power 21: to project power, protect U.S. interests, and
    enhance and support joint force operations.
        Myths.--Before I close, since this is probably the last opportunity
    I will have to appear before this committee, I would like to take this
    opportunity to briefly comment on several myths about the Naval Reserve
    that I have encountered during my tour as the Chief of Naval Reserve.
        The first myth is the popular opinion of many that Reserve Forces
    have been overused during the GWOT. As I mentioned in the beginning, I
    can assure you that the Naval Reserve has not been overused and is
    ready and able to do more to support the Navy. I know this not only
    because of the conversations that I have had with Naval Reservists on a
    daily basis, but also because of some very interesting statistics that
    have come out of our 9/11 mobilizations, such as the one measure that
    indicates our current attrition rate for those mobilized for the GWOT
    is approximately 12 percent, which is considerably lower than our
    historical attrition rate. I'm a firm believer that the Naval Reserve
    Force needs to be used to be relevant.
        The second myth is that it is unwise to place 100 percent of a
    mission within the Reserve. I firmly believe that certain missions are
    designed perfectly for the Reserve and are very cost effective. A
    perfect example is the 14 Naval Reserve squadrons of our Fleet
    Logistics Support Wing which have very successfully provided 100
    percent of the Navy's worldwide intra-theatre airlift support on a
    continuous basis for over a decade. There are currently 14 Naval
    Reserve logistics aircraft deployed outside the continental United
    States, which is a 230 percent increase since 9/11, yet we have done
    this while only mobilizing one airlift squadron.
        You may have heard discussions about changing the mix of active
    component versus Reserve component. The Naval Reserve is working
    closely with the Navy to address High Demand/Low Density type units.
    Through innovative sharing of assets and essential skill sets, Reserve
    personnel have been used to train new Active Component crews as well as
    carry some of the load of the deployment rotation. VAQ 209, flying EA-
    6B electronic warfare jets based at NAF Washington, deployed overseas
    for 45 days this past summer flying combat patrols in support of
    Operation Northern Watch, their fifth such deployment in the last seven
    years. Yet when they were here at home, they provided personnel and
    aircraft to the Fleet to support multi-week flight training
    detachments. By doing this they maximize the value of the dollars Navy
    has already spent to train and equip them while sustaining and
    exercising their warfighting skills. The renewed demand for Naval
    Coastal Warfare units, as mentioned before, has caused Navy to
    reevaluate the requirement and to create Active Component units. Naval
    Reserve, in this case, has served to provide the storehouse of skills
    so that as the demands of warfighting changed Navy was able to quickly
    meet the new challenge. These are just two examples of how your Naval
    Reserve Force provides the organizational flexibility needed to
    navigate the rapid changes of a transforming world.
        A myth that certainly has to be dispelled is that Naval Reservists
    cost more than their active duty counterparts. A cost comparison done
    for a seven year period from fiscal year 2003 through fiscal year 2009
    shows that a Selected Reservist, not mobilized at any time during that
    period, costs approximately 21 percent of the cost of an active member.
    The cost of a Selected Reservist mobilized for a two year period during
    the 7 year time frame still reflects a considerable savings--less than
    half of that of an active member. In 2002, Navy estimated that it costs
    $1.26 million to train an F-18 pilot, taking that ``nugget'' pilot from
    ``street to fleet.'' By the time that same pilot will become a member
    of the Reserve Force, Navy will have invested many more millions of
    dollars to hone his or her skills. When that pilot joins a Naval
    Reserve squadron we will have recaptured every one of those training
    dollars. My point is that the cost of a valuable mobilization asset
    should not be looked at only in the limited context of the period
    during mobilization, but, rather in the larger context; that of an
    amazingly cost effective force multiplier available both during periods
    when the nation's active forces are able to handle the PERSTEMPO and
    OPTEMPO without Reserve augmentation and during those periods of crisis
    that require Citizen-Sailors to leave their civilian lives and jobs and
    be mobilized.
        An additional myth is that the Naval Reserve should only be
    employed for full mobilization scenarios. Much like VAQ 209, which I
    mentioned earlier, our Naval Special Warfare units and Naval Special
    Warfare helicopter squadrons, either by providing personnel or by
    providing deploying units, have participated in smaller scale
    contingency operations such as Uphold Democracy in Haiti. Our Naval
    Reserve intelligence community is contributing daily to the processing
    and evaluation of intelligence information. Our maritime patrol
    squadrons and Naval Reserve Force frigates are continuously employed in
    the war on drugs. These scenarios do not involve full mobilization,
    they involve ad hoc contributions that keep our Naval Reservists
    engaged in something that is important to them--the safety, security
    and preservation of our country. If we want to continue the capable
    reserve force we have today, we must utilize their talents or they will
    not stay.
        And the last myth is that it takes too long for us to mobilize and
    be ready. Fortunately, I have a timely example to use to dispel this
    myth. On October 4th, 2002, a mobilization order was issued to VFA-201.
    Within 72 hours 100 percent of squadron personnel had completed the
    mobilization process, and within 90 days, all refresher training had
    been completed and the squadron was deployed on board the U.S.S.
    Theodore Roosevelt. Every aviator has cruise experience, over 1,000
    flight hours, and many have 2,000 hours in aircraft type. Squadron
    aviators provided leadership to the air wing in strike planning, flight
    execution, and carrier operations. Their experience in operations
    around the world and in adversary tactics continue to aid increased air
    wing readiness. Since mobilization, the Hunters of VFA-201 have flown
    more than several thousand Sorties, have flown over 300 hours in combat
    and have dropped over 60,000 lbs. of precision-guided munitions. Not
    only were we ready to respond to the call quickly, but, I am please to
    report that VFA-201 pilots had the highest qualification grades in the
    Air Wing and were awarded the Squadron ``Top Hook'' award. I am also
    pleased to report that VFA-201's twelve F-18A+ aircraft are equivalent
    to F-18C aircraft primarily because of funding for equipment upgrades
    provided by Congress via the NG&RE appropriation.

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        Running Myths about the Naval Reserve
      --Naval Reserve forces are being overused
      --It is unwise to place a mission entirely in the Naval Reserve
      --The active/reserve force mix for High Demand/Low Density units
            should be changed
      --The Naval Reserve should be used only for full mobilization
            scenarios
      --It takes too long for the Naval Reserve to mobilize and get ready

        ----------------------------------------------------------------

        Summary.--The Naval Reserve is meeting big challenges with a Force
    that is remarkably fit and ready to continue doing the heavy lifting
    for the Navy Marine Corps Team. If we are successful at procuring the
    compatible equipment we need, we can become even more effective at
    world-class service to the Fleet. We look forward to meeting the
    challenges ahead, both within the Naval Reserve and in support of the
    Navy's strategic vision.
        As I review the state of our Naval Reserve Force over the past
    year, I take pride in what the Naval Reserve has accomplished. All
    things considered, it has been a remarkable year.

        Senator Stevens. Thank you very much. I think the committee
    would be very interested in the number of volunteers that came
    forth in each one of your branches. I've got to tell you, I've
    had more calls from people who were irritated that they weren't
    called up than I got for those who called up who were
    irritated, so there's a balance there somewhere.
        General McCarthy.
        General McCarthy. Mr. Chairman, members of the committee,
    with my colleagues I thank you for the opportunity to appear
    and to talk briefly about the Marine Corps Reserve. Most
    importantly, I would like to say that as an advocate for the
    Marine Corps Reserve I want to thank the Congress and this
    committee in particular for the support that you have provided
    over the years, and I think it's clear that the investments
    that the Congress and this committee have made in the Marine
    Corps Reserve have been well used, and have borne fruit in this
    most recent period of combat for our country.
        As you pointed out, Senator Stevens, it is truly a totally
    integrated force. The Marines and their units in the Marine
    Corps Reserve are indistinguishable from their active units.
    They are part of those units. Their units are combined, and it
    truly is, I believe, a validation of the concept of a total
    force.
        Over 50 percent of the marines and sailors who serve with
    us in Marine Reserve units have been mobilized, and the vast
    majority, I think over 75 percent of those mobilized right now,
    were mobilized for service in the U.S. Central Command's area
    of responsibility. They have been directly engaged with the
    enemies of our Nation. They have suffered their share of
    casualties. They've served across the full spectrum of Marine
    operations, infantry, aviation, tanks, light armored
    reconnaissance, reconnaissance units, engineers, combat service
    support, ANGLICO units serving with Special Operations Command
    and with the first United Kingdom forces in Southern Iraq. In
    short, in every aspect of Marine operations in Operation Iraqi
    Freedom, Marine Reserves and their units have been an integral
    part.
        We are now focused at my headquarters on bringing these
    units home, on demobilizing them and refitting them and getting
    them ready for whatever challenges may lie ahead. That
    demobilization process is our number one focus of effort, and
    as soon as that process is complete, we will begin to focus on
    reconstituting and rebuilding the capabilities of the Marine
    Corps Reserve, and that is going to be a challenging task, but
    it is one that I believe we can accomplish.
        It's clear that as we bring units home there will still be
    units remaining in the area of operations. Some of the last
    units to leave Iraq, I believe, will be Marine Corps Reserve
    units, Civil Affairs units, a couple of infantry battalions,
    and light-armored reconnaissance come immediately to mind, but
    I just left the theater on Sunday night, and I talked to I
    think hundreds, maybe thousands of Marines while I was there, I
    visited with the senior marine commanders, and I come away
    convinced that your Marine Corps Reserve has done a tremendous
    job, and that it will continue to do so. It will come out in
    good order, and we will begin the process of getting ready for
    whatever challenges lie ahead. We will work in close
    coordination with the Congress, and again I would state my
    appreciation for your support.
        Thank you, Senator.
        [The statement follows:]
          Prepared Statement of Lieutenant General Dennis M. McCarthy
                                  introduction
        Chairman Stevens, Senator Inouye and distinguished members of the
    Committee, it is my privilege to report on the status and the future
    direction of your Marine Corps Reserve as a contributor to the Total
    Force. On behalf of Marines and their families, I want to thank the
    Committee for its continued support. Your efforts reveal not only a
    commitment for ensuring the common defense, but also a genuine concern
    for the welfare of our Marines and their families.

                        YOUR MARINE CORPS RESERVE TODAY

        Today's Marine Reserves are ready, willing and able to support the
    Active component and to serve our communities in peace or war. During
    the Global War on Terrorism, Reserve units have filled critical roles
    in our nation's defense--whether deployed to Afghanistan, Djibouti or
    the Persian Gulf or on standby to respond to Homeland Security crises.
        As of April 21, approximately 21,100 Marines were activated as part
    of units or individual augmentees in support of Operations Noble Eagle,
    Enduring Freedom, and Iraqi Freedom. This represents approximately 52.8
    percent of the Selected Marine Corps Reserve and 4.7 percent of the
    Individual Ready Reserve. Roughly 75 percent of the Selected Marine
    Corps Reserve Marines currently activated are participating in
    Operation Iraqi Freedom. From the 2nd Battalion, 23rd Marine Regiment
    operating up front with the 1st Marine Regiment, to Reserve KC-130s
    flying supplies into Iraq and evacuating prisoners of war, to the 6th
    Engineer Support Battalion purifying over a million gallons of water,
    to members of the 3rd Civil Affairs Group establishing local police
    forces and organizing joint patrols with Iraqi policemen, Marine
    Reserves continue to play a major role in Coalition operations in Iraq.
        Reserve integration readily enhances Marine Corps operational
    capabilities, however, the Commandant of the Marine Corps recognizes
    that the Reserve is a finite resource and insists on its judicious use.
    In the first year of Operations Noble Eagle and Enduring Freedom we
    activated no more than 11 percent of the Selected Marine Corps Reserve
    (units and Individual Mobilization Augmentees) and less than 2 percent
    of the Individual Ready Reserve. All of the Individual Ready Reserve
    members were volunteers.
        Mobilization readiness is our number one priority all the time and
    the men and women in the Marine Corps Reserve have responded
    enthusiastically to the call to duty. Only 1.8 percent of those
    receiving orders have requested delay, deferment or exemption from
    duty. The hard work and dedication of the Marines and Sailors to this
    task has resulted in the efficient execution of the mobilization. We
    moved personnel and cargo directly from reserve training centers to
    embarkation points using tractor-trailers, chartered buses and
    flights--without missing a designated arrival date. No reserve unit had
    to ask for relief to enter theater without the required anthrax and
    smallpox inoculations. As we begin to see combat operations taper off,
    we are now preparing for the equally efficient demobilization of many
    of our reserve units.
        The ability of the Reserve to rapidly mobilize and integrate into
    the Active component in response to the Marine Corps' operational
    requirements is a tribute to the dedication, professionalism and
    warrior spirit of every member of the Marine team--both Active and
    Reserve. Our future success relies firmly on the Marine Corps' most
    valuable asset--our Marines and their families.

                           MARINES AND THEIR FAMILIES

        We continue to evaluate personnel policy changes regarding
    entitlements, training and employment of Reserve forces, and support
    for family members and employers to minimize the impact of mobilization
    on our Marines. Success in this area will enhance our ability to retain
    the quality Marines needed to meet our emerging operational
    requirements.
        We need your continued support to attract and retain quality men
    and women in the Marine Corps Reserve. Our mission is to find those
    Marines who choose to manage a commitment to their family, their
    communities, their civilian careers, and the Corps. While such
    dedication requires self-discipline and personal sacrifices that cannot
    be justified by a drill paycheck alone, adequate compensation and
    retirement benefits are tangible incentives for attracting and
    retaining quality personnel. This challenge will be renewed when
    mobilized units return from Active duty and begin the process of
    reconstitution.
        Last year, the Marine Corps Reserve achieved its recruiting goals,
    accessing 5,900 non-prior service and 4,213 prior service Marines. This
    is particularly challenging because the historic high rate of retention
    for the Active component has reduced the pool for prior service
    recruiting. Enlisted attrition rates for fiscal year 2002 decreased
    approximately 2.8 percent from our four-year average. Marine Corps
    Reserve officer attrition rates were slightly higher than historical
    averages which can in part be attributed to Reserve officers leaving
    non-mobilized Selected Marine Corps Reserve units to be mobilized in
    support of individual augmentation requirements.
        The incentives provided by Congress, such as the Montgomery G.I.
    Bill and the Montgomery G.I. Bill Kicker educational benefits,
    enlistment bonuses, medical and dental benefits, and commissary and
    Post Exchange privileges, have helped us to attract and retain capable,
    motivated, and dedicated Marines, which has contributed to the
    stability of our Force. Congressional enhancements allowed us to
    increase our recruiting and retention incentive programs during fiscal
    year 2002. We are funding these programs to the same levels in fiscal
    year 2003 through internal realignment. The increase is also reflected
    in our fiscal year 2004 budget request. The tangible results of your
    support for these incentives are the aforementioned decreased attrition
    and recruiting successes.
        The Marine Corps is the only Service that relies almost entirely on
    its prior service population to fill the ranks of its Reserve officer
    corps. Although the Marine Corps Reserve exceeded its recent historical
    Selected Marine Corps Reserve unit officer accession rates in fiscal
    year 2002, staffing our unit officer requirements at the right grade
    and military occupational specialty continues to be our biggest
    recruiting and retention challenge. We are exploring ways to increase
    the Reserve participation of company grade officers.
        The long-term impact of serial or repeated mobilizations on
    recruiting and retention is still undetermined. More than 3,000 of our
    activated reserves have now exceeded the one-year mark. We will not
    know the overall retention impact until we demobilize a significant
    number of these Marines and they have an opportunity to assess the
    impact of mobilization on their families, finances and civilian
    careers.
        Should Active or Reserve Marines choose to make a transition back
    to civilian life, the Marine for Life program is an initiative which is
    already proving to be of immeasurable value to our returning citizens.
    The Marine For Life Program was developed to achieve the Commandant's
    vision of ``improving assistance for our almost 29,000 Marines each
    year who honorably leave Active service and return to civilian life,
    while reemphasizing the value of an honorable discharge.'' While work
    continues to complete all necessary details of this broad program,
    Marine For Life has begun the transition toward initial stand up.
    Combining a nationwide network of hometown links administered by
    Reserve Affairs at Headquarters Marine Corps, Marine For Life provides
    Marines with information and assistance required to make a successful
    transition from Active service to civilian life in their desired
    hometown. This year marked the release of numerous policies and
    information outreach campaigns on the use and benefits provided by
    Marine For Life to the Total Force Marine Corps as part of our ongoing
    efforts to improve the overall life of all Marines. The Marine For Life
    Program will build, develop and nurture a nationwide network of
    transitioning Marines, veterans, retirees, Marine Corps affiliated
    organizations, and friends of the Corps.
        Combat readiness and personal and family readiness are inseparable.
    Our Marine Corps Community Services organization works aggressively to
    strengthen the readiness of our Marines and families by enhancing their
    quality of life. Our many Marine Corps Community Services programs and
    services are designed to reach all Marines and their families
    regardless of geographic location--a significant and challenging
    undertaking considering the geographic dispersion of our Marines and
    their families throughout the United States and Puerto Rico. During the
    current mobilization we are seeing the payoffs of our significant
    investment over the past several years in family readiness programs.
    Key volunteers and site support personnel are assisting families and
    keeping communities informed.
        In December 2002, the Marine Corps began participating in a two-
    year Department of Defense demonstration project providing 24-hour
    telephonic and online family information and referral assistance.
    Referred to as ``Marine Corps Community Services One Source'', it is
    similar to employee assistance programs used by many of the nation's
    major corporations as a proven Human Resource strategy to help
    employees balance work and homelife demands, reduce stress and improve
    on-the-job productivity. We are already receiving positive feedback
    from users.
        The support our Reserve Marines receive from their employers has a
    major impact on their ability to serve. We have partnered with the
    National Committee for Employer Support of the Guard and Reserve to
    foster a better mutual understanding and working relationship with
    employers. During the current partial mobilization many employers have
    voluntarily pledged to augment pay and extend benefits which has
    greatly lessened the burden of activation on our servicemembers and
    their families. I would like to acknowledge and thank the public and
    private sector employers of our men and women serving in the Marine
    Corps Reserve for their continued support.
        Like the Active component Marine Corps, the Marine Corps Reserve is
    a predominantly junior force with historically about 70 percent of
    Selected Marine Corps Reserve Marines serving their first enlistment.
    Many of our young Marines are also college students. Currently, there
    are no laws that would offer academic and financial protections for
    students and schools affected by mobilization. We support Employer
    Support of the Guard and Reserve's new initiative to improve
    communication between Reserve component personnel and their educational
    institutions.
        In addition to supporting Operations Noble Eagle, Enduring Freedom,
    and Iraqi Freedom, Marine Reserves continued to provide operations
    tempo relief to the Active forces. Notably, more than 300 reserves
    volunteered to participate in UNITAS 43-02, creating the first Reserve
    Marine Corps UNITAS (an annual U.S. sponsored exercise in South
    America). From August to December, the Marines sailed around South
    America conducting training exercises with military forces from Brazil,
    Colombia, Ecuador, Argentina, Peru, Chile and other countries. Marine
    Forces Reserve also provided the majority of Marine Corps support to
    the nation's counter drug effort, participating in numerous missions in
    support of Joint Task Force 6, Joint Interagency Task Force-East and
    Joint Interagency Task Force-West. Individual Marines and Marine units
    support law enforcement agencies conducting missions along the U.S.
    Southwest border and in several domestic ``hot spots'' that have been
    designated as high intensity drug trafficking areas.
        The Active Duty Special Work Program funds short tours of active
    duty for Marine Corps Reserve personnel. This program continues to
    provide critical skills and operational tempo relief for existing and
    emerging augmentation requirements of the Total Force. The demand for
    Active Duty Special Work has increased to support pre-mobilization
    activities during fiscal year 2002 and fiscal year 2003 and will be
    further challenged during post mobilization. In fiscal year 2002, the
    Marine Corps executed 1,208 work-years of Active Duty Special Work.
    Continued support and funding for this critical program will ensure our
    Total Force requirements are fully met.
        Maintaining overall Selected Marine Corps Reserve end-strength at
    current levels will ensure the Marine Corps Reserve's capability to
    provide operational and personnel tempo relief to Active Marine Forces,
    maintain sufficient full-time support at our small unit sites, and
    retain critical aviation and ground equipment maintenance capabilities.
    Selected Marine Corps Reserve units are structured along the Marine Air
    Ground Task Force model, providing air combat, ground combat and combat
    service support personnel and equipment to augment and reinforce the
    Active component. Less than one percent of our Selected Marine Corps
    Reserve unit strength represents a reserve-unique capability. The
    current Marine Forces Reserve structure also reflects a small tooth-to-
    tail ratio with a minimal number of Active duty and Reserve personnel
    in support roles, and a majority of our Reserve and active Marines and
    Sailors as deployable warfighters.
        The Marine Corps Reserve also provides a significant community
    presence in and around our 187 sites nationwide. One of our most
    important contributions is providing military funerals for our
    veterans. The Active duty staff members and Reserve Marines at our
    sites performed approximately 6,170 funerals in 2002 and we anticipate
    supporting as many or more this year. The authorization and funding to
    bring Reserve Marines on Active duty to perform funeral honors has
    particularly assisted us at sites like Bridgeton, Missouri, where we
    perform several funerals each week. We appreciate Congress exempting
    these Marines from counting against active duty end strength.

                               CURRENT READINESS

        I am happy to report that the the general state of readiness in the
    Marine Corps Reserve today is good. This condition is attributable to
    the spirited ``can do'' attitude of our Marines, and increased funding
    in the procurement and operations and maintenance accounts provided by
    the Congress in fiscal year 2002. Most important, we remain ready and
    prepared to augment the Active Component in support of standing and
    crisis action requirements.
        The $5 million provided by National Guard and Reserve
    Appropriations in fiscal year 2002 was used entirely for warfighting
    priorities which will help us get to the fight and remain effective.
    Night vision upgrades to our KC-130s and CH-53 helicopters have been
    extremely valuable--enabling support of operations in Afghanistan and
    of the 24th Marine Expeditionary Unit. Your support of National Guard
    and Reserve Appropriations proposed for fiscal year 2004 will continue
    to enhance the readiness of the Reserves and their ability to integrate
    with the Active duty forces. The $10 million provided in fiscal year
    2003 National Guard and Reserve Appropriations will further enhance the
    Reserve aviation assets as well as provide communications systems
    compatible with our Active duty counterparts. Additional funding
    provided by Congress has also enabled us to begin issue of the new
    Marine Corps combat utility uniform. By the end of 2003 every Marine in
    the Marine Forces Reserve will have at least one set.
        During the most recent mobilizations, the benefits of previous
    Congressional support that provided for the creation of our Nuclear,
    Biological and Chemical Defense equipment storage facility were
    realized. Every Reserve Marine deployed with modern, serviceable
    equipment.
        Maintaining current readiness levels into the future will require
    continued support as our equipment continues to age at a pace which,
    unfortunately, exceeds replacement. Within our Reserve aviation
    community, the average age of our ``youngest'' platform is the UC-35 at
    5 years, followed by the AH-1W Cobra at 10 years, CH-53E at 15 years,
    KC-130T at 17 years, F/A-18A at 19 years, and F-5 at 30 years. Our
    oldest platform, and platforms which have exceeded programmed service
    life, include the UH-1N at 32 years (20-year service life) and the CH-
    46E at 36 years (20-year service life with ``safety, reliability, and
    maintainability'' extension to 30 years). Maintaining these aging
    legacy platforms requires increased financial and manpower investment
    with each passing year due to parts obsolescence and higher rates of
    equipment failure. Aircraft maintenance requirements are increasing at
    an approximate rate of 8 percent per year. For example, for every hour
    the CH-46 is airborne, it requires 37 man-hours of maintenance.
        The situation within our Reserve ground community, while not as
    dire as the aviation force in terms of nearing or exceeding service
    life of platforms, also is a growing concern. The average age of our
    Logistics Vehicle System fleet is 16 years; Light Armored Vehicles at
    17 years; High Mobility Multipurpose Wheeled Vehicle A1s at 18 years;
    5-ton trucks at 21 years; M-198s at 20 years; Reverse Osmosis Water
    Purification Units at 18 years and Assault Amphibious Vehicles at 30
    years, although all of our Assault Amphibious Vehicle P7A1 personnel
    carriers have been upgraded through the Reliability, Availability, and
    Maintainability/Rebuild to Standard program which significantly
    increased vehicle readiness and lowered the support cost. Our 5-ton
    trucks have exceeded their programmed service life, but will be slowly
    replaced with the Medium Tactical Vehicle Replacement beginning in June
    2003. The Reverse Osmosis Water Purification Unit, which currently has
    a critical role in Iraq, has also exceeded its programmed service life
    but will not be replaced until fiscal year 2006. While some are being
    replaced or upgraded with service life extensions, maintaining these
    aging legacy platforms still requires increasing financial and manpower
    investments for the reasons cited earlier. Due to affordability, we
    have taken some near-term readiness risk with the level of funding we
    proposed in fiscal year 2004 for depot level maintenance.
        In addition to equipment aging, operations and maintenance expenses
    are also being driven upwards by increasing equipment utilization rates
    brought about by greater integration and support with the Active
    component, both in peacetime and more recently in support of the Global
    War on Terrorism. We are pursuing various measures internally to
    mitigate these trends by focusing on better business practices. One
    example is transferring unit non-essential equipment to central storage
    locations for preservation and maintenance.
        We are thankful for and remain confident that the additional funds
    provided by Congress in fiscal year 2003 will ensure the continuing
    readiness of the Marine Corps Reserve, and we seek your continued
    support in the fiscal year 2004 President's Budget.

                                 INFRASTRUCTURE

        Our long-range strategy to maintain our connection with communities
    in the most cost effective way is to divest Marine Corps owned
    infrastructure and to locate our units in Joint Reserve Centers
    wherever feasible. With the opening of the new Joint Reserve Center in
    Wahpeton, North Dakota, this year, Marine Forces Reserve units will be
    located at 187 sites in 48 states, the District of Columbia, and Puerto
    Rico. Over 75 percent of the reserve centers we are in are more than 30
    years old, and of these, about 37 percent are over 50 years old.
        Investment in infrastructure has been a bill-payer for pressing
    requirements and near-term readiness for most of the last decade. The
    transition to Facilities Sustainment, Restoration and Modernization
    funding has enabled us to more accurately capture our requirements.
    Like the Active Component Marine Corps, we do not expect to be able to
    bring our facilities to acceptable levels of readiness before fiscal
    year 2013. Thirty-seven percent of our facilities are currently rated
    below acceptable levels. We have over a $20 million backlog in
    restoration and modernization across the Future Years Defense Program.
    Maintaining facilities adequately is critical to providing quality
    training centers our Marines need.
        Last year's vulnerability assessments identified $33.6 million in
    projects to resolve anti-terrorism/force protection deficiencies at the
    42 sites that we own or otherwise have responsibility for site
    maintenance. We are prioritizing and addressing these deficiencies now
    and in the future years. The age of our infrastructure means that much
    of it was built well before anti-terrorism/force protection was a major
    consideration in design and construction. These facilities will require
    resolution through structural improvements, relocation, or the
    acquisition of additional stand off distance. All of these more
    expensive solutions will be prioritized and achieved over the long term
    to provide the necessary level of force protection for all our sites.
    Our fiscal year 2004 President's Budget submission for Military
    Construction, Naval Reserve is $10.4 million, 20 percent lower than the
    fiscal year 2003 enacted level. The fiscal year 2004 request addresses
    our most pressing requirement--a new Reserve Training Center at
    Quantico, Virginia. Joint construction often provides the most cost
    effective solution. We support a Joint construction funding account, as
    long as it is structured correctly.
        In addition to the Military Construction, Naval Reserve program, we
    are evaluating the feasibility of other innovative solutions to meeting
    our infrastructure needs, such as real property exchange and public-
    private ventures. The overall condition of Marine Corps Reserve
    facilities continues to demand a sustained, combined effort of
    innovative facilities management, proactive exploration of and
    participation in Joint Facility projects, and a well-focused use of the
    construction program.

                        MODERNIZATION AND TRANSFORMATION

        In recent years the Marine Corps has made a deliberate choice to
    fund current readiness over recapitalization and transformation. It is
    well documented that this practice has led to a downward spiral in
    which we annually invest more funds for operations and maintenance to
    maintain aging equipment leaving insufficient funds for new equipment
    procurement. Generating savings to reinvest in procurement, while
    essential for recapitalization and transformation efforts, should be
    accomplished with great care, using a risk management approach to
    evaluate existing legacy equipment. The following modernization
    priorities represent low investment/high pay-off capabilities, closely
    linked to Marine Corps operational concepts and doctrine, relevant to
    the combatant commanders, and essential to the survival of our Marines
    in combat.

    Modernization

                F/A-18A Engineering Change Proposal 583
        Our top modernization priority remains unchanged from fiscal year
    2003: upgrading our fleet of 36 F/A-18A Hornet aircraft with
    Engineering Change Proposal 583. This Marine Corps Total Force program
    encompasses 76 aircraft. This Engineering Change Proposal converts
    early lot, non-precision, day fighter/attack aircraft into F/A-18C Lot
    17 equivalent aircraft capable of day/night operations employing the
    newest generation of air-to-air and air-to-ground precision-guided
    munitions, including the Joint Direct Attack Munition, Joint Standoff
    Weapon, Standoff Land Attack Missile-Expanded Response, and AIM 9X.
    Additionally, this Engineering Change Proposal replaces the APG-65
    radar with the APG-73, adds a global positioning system to the
    navigation suite, replaces radios with the ARC-210--a digital
    communication system, and installs new mission computers and many other
    components.
        As the Chairman of the Joint Chiefs of Staff stated in recent
    testimony, there is ``increased reliance on our Reserve components to
    defend the Nation's coastlines, skies and heartland, as well as protect
    our interest worldwide.'' For the relatively low investment cost of
    $5.2 million per aircraft, the combatant commanders, first, will have
    access to an additional 76 capable and interoperable war-fighting
    assets. Second, with many F/A-18C aircraft nearing service life limits,
    upgrading these aircraft helps to mitigate the Navy's decreasing
    inventory of tactical aviation assets. Third, it is supportive of a
    goal outlined by the Secretary of Defense in recent testimony--to
    continue transforming for the threats we will face in 2010 and beyond.
        Congress has funded 52 aircraft Engineering Change Proposal 583
    upgrades through fiscal year 2003 with 20 more aircraft requiring
    follow on funding. The fiscal year 2004 President's Budget funds $27.0
    million, which will provide 6 aircraft with the 583 upgrades.

                CH-53E Helicopter Night Vision System
        Our second modernization priority also remains unchanged from
    fiscal year 2003: upgrading our fleet of 21 CH-53E helicopters with
    Helicopter Night Vision Systems. This Marine Corps Total Force program
    encompasses 152 aircraft, including 131 Active Component aircraft. The
    primary component of the Helicopter Night Vision Systems is the AN/AAQ-
    29 Forward Looking Infrared. Helicopter Night Vision Systems ``expands
    the envelope'' by providing improved night and all-weather capability.
    The importance of having a robust and capable heavy lift capability was
    displayed in Afghanistan where the Corps' CH-53Es transported Marines
    and supplies hundreds of miles inland to austere operating sites. To
    operate effectively and within safe margins mandates that our CH-53Es
    be equipped with Helicopter Night Vision Systems. Congress has funded
    84 Helicopter Night Vision Systems through fiscal year 2003 with 68
    remaining unfunded (59 Active Component/9 Reserve Component). The
    fiscal year 2004 President's Budget funds $5.6 million, which will
    provide another 5 Helicopter Night Vision Systems.

                Initial Issue Equipment
        On the ground side, our most important priority concerns the need
    for adequate initial issue equipment for our individual Reserve
    Marines. Individual issue equipment includes body armor, cold weather
    items, tents, and improved load bearing equipment. Supplemental funding
    provided through the Defense Emergency Response Fund in fiscal year
    2002 allowed us to replace/replenish unserviceable gear which was
    paramount to the success of the recent mobilization of the Reserve
    forces.

    Transformation
        The value of the Marine Corps Reserve has always been measured in
    our ability to effectively augment and reinforce the Active Component.
    Over the next several years, the overall structure of the Marine Corps
    Reserve will remain largely the same; however, we are working to create
    new capabilities to adapt and orient the reserve force to the changing
    strategic landscape. The capabilities were identified as part of an
    internal comprehensive review begun in 2001 and do not involve any
    changes to the number of reserves or the geographic laydown of the
    force.
      --Foremost among these capabilities will be the creation of two
            Security Battalions and an Intelligence Support Battalion. The
            Security Battalions will provide a dual-use capability
            consisting of eight Anti-Terrorism Force Protection platoons
            and an augmentation unit for the Marine Corps Chemical
            Biological Incident Response Force.
      --Recognizing the increased requirements at Marine Corps and Joint
            Commands for rapid, flexible staff augmentation, the Marine
            Corps Reserve is enhancing and modifying the Individual
            Mobilization Augmentee program to increase the quantity and
            distribution of augmentee billets to better support the
            warfighting commander's needs.
      --Additional Reserve capability improvements involve information
            technology, environmental protection, and foreign language
            skills.

                                   CONCLUSION

        In early February this year while visiting a group of Marines in
    Qatar, the Commandant of the Marine Corps made the following comment:
    ``I understand from the numbers that two-thirds of you here are
    reservists--I know you simply as Marines--and looking at performance I
    can't tell the difference.'' Testaments like this tell the real story
    of our success. Our greatest asset is our outstanding young men and
    women in uniform. Your consistent and steadfast support of our Marines
    and their families has directly contributed to our success. The Marine
    Corps appreciates your continued support and collaboration in making
    the Marine Corps and its Reserve the Department of Defense model for
    Total Force integration and expeditionary capability.

        Senator Stevens. Thank you. General Sherrard.
        General Sherrard. Yes, sir. Mr. Chairman, members of the
    committee, I, too, would like to thank you for the opportunity
    to come before you representing the men and women of the Air
    Force Reserve Command, nearly 76,000 strong, of which we have
    in excess of 15,000 mobilized today.
        As has been expressed by all the members of your committee,
    as well as my colleagues, the men and women of our command,
    along with all our cohorts, have just been fabulous in what
    they've done in response to the needs of the Nation, and we
    could not be more proud. We have a responsibility, each one of
    us, to make certain that we in fact look after their needs and
    make certain that they in fact are met, and I want to thank the
    committee for the things that you have done for us in the past,
    and for those that you'll do for us in the future in terms of
    pay and education benefits, in terms of modernization
    capabilities for our equipment, and as General James mentioned
    the LITENING II pods. That's one of the greatest things we've
    ever done for your Air Force, in terms of giving that
    capability to our F-16s, and we're now taking it into the A-10
    and the B-52, and it gives it remarkable capability, and if it
    were not for your support that would not have been possible.

                                  MOBILIZATION

        I would tell you that our priorities in the command remain
    our people, readiness and modernization. We want to make
    certain that our people are always our number one objective. In
    doing so, as we go through the mobilization period we were
    faced with the same things that my cohorts have already
    mentioned, in some cases very short notice. We did not have the
    normal 30-day notice that we would like to have had. The
    members responded. In fact, I will tell you in reality they
    responded in the volunteer state and deployed before we had
    mobilization authority. They deployed as volunteers, and then
    we mobilized them in place in some cases.

                                   READINESS

        In terms of the readiness side, we want to continue to
    pursue our accessing as many prior active service members as
    possible. That gets to be a major challenge for us,
    particularly as was mentioned by the earlier panel. When there
    is a stop loss of the active force, that does put a restriction
    on our recruiters, but I am very proud to tell you that our
    recruiters are out there, they met goal by getting as many of
    the nonpriors to fill in those holes where the prior service
    members were, in fact, not available, but the prior service
    members are certainly our key to success. They give us that
    experience level that is so critical for us to be able to do
    the things that we ask our members to do in light of the very
    limited time that they would have to serve with us when they're
    not in a mobilized state.

                                 MODERNIZATION

        In terms of modernization, as I mentioned, we need to
    continue to make certain that our weapons systems are relevant.
    The combatant commanders insist upon that. If not, they don't
    invite you to the fight. We've got to make sure that they're
    interoperable not only with our active force and the Air
    National Guard, but also with our other component friends here,
    because we're all using the same battle space, and we've got to
    make certain that we can communicate and know who is the friend
    and who is the foe.

                                 DEMOBILIZATION

        The things that I would tell you are most critical to us,
    as I mentioned earlier on the demobilization side, we have
    demobbed just under 3,000 people to date. We are bringing the
    people back as fast as the combatant commander releases them,
    back to the gaining major commands, who in turn will release
    them to us, but we want to make certain we do it in a very
    rational manner, that we provide the member the opportunity to
    exercise all the rights of reconstitution, of leave, and most
    importantly of the medical assessment, so we can determine if
    there have been some issues that would need to be addressed in
    the future for that member. We take that time and ensure that
    we don't do something that would place our members into harm's
    way when we could have prevented that if we had just taken some
    time and been a bit more orderly in the way we go about it.
        I think the Air Force has got a very reasonable and
    rational plan in bringing our members back and making certain
    that we do it properly. I will tell you, that as we in the blue
    suit community know very well, we are in fact all tied
    together, the active force, the Air Force Reserve, and the Air
    National Guard, seamlessly, and I would tell you our unit
    equipped units as well as our very cost-effective associate
    units give us a capability that allows us to meet the Air Force
    needs worldwide.
        I'd like to just close with the statement that I had the
    opportunity to discuss with one of my outstanding troops. I was
    having a conversation with one of our special operators when he
    was in theater, and he put it very succinctly, but also it
    touched what I think is the very reason that all of you are
    talking about today, why are our men and women willing to go
    sacrifice in some cases maybe their business, they certainly
    sacrifice time with their families and with their employers,
    and he put it very straightforward. He said, you know, if it's
    not me, then who, and if it's not now, then when, and I think
    that statement, or those two statements are, in fact, the
    things that each member of the Guard and Reserve components ask
    themselves, because it is their dedicated efforts that allow it
    to happen, and we could not be more proud of the response that
    they have stepped forward when asked. I thank the committee
    again for their service and support of us, and I also will tell
    you that we're very, very proud to be serving with our Air
    Force, and I look forward to questions that you may have. Thank
    you.
        [The statement follows:]
         Prepared Statement of Lieutenant General James E. Sherrard III

        Mr. Chairman, Senator Stevens, and distinguished members of the
    Committee, I appreciate the opportunity to appear before you today and
    I certainly want to thank you for your continued support, which has
    helped your Air Force Reserve address vital recruiting, retention,
    modernization, and infrastructural needs. Your passage of last year's
    pay and quality of life initiatives sent a clear message to our citizen
    airmen that their efforts are not only appreciated and supported by
    their families, employers, and the American people, but also by those
    of you in the highest positions of governing.

                               HIGHLIGHTS OF 2002

        We culminate 2002 and begin 2003 focused on transforming our air
    and space capabilities as well as streamlining the way we think about
    and employ our forces. We continue to develop our airmen into leaders,
    bring technology to them at their units and in the battlespace, and
    integrate operations to maximize our combat capabilities. These three
    basic core competencies are critical to the Air Force Reserve as we
    become more and more relevant in the future total force.
        The Air Force, with the Air Force Reserve Command (AFRC), has
    enjoyed over 30 years of unparalleled Total Force integration success.
    We were the first to establish associate units which blend Active and
    Reserve forces into the correct mix. Our members perform in almost
    every mission area and seek involvement in all future mission areas, as
    those areas become relevant. Key to our successes, to date, is the fact
    that AFRC is a very dynamic organization in a dynamic environment,
    still putting our airmen first, and using new technology to seamlessly
    integrate all our forces, whether associate or unit equipped, in both
    peace and war.

                             DEVELOPING OUR AIRMEN

        I am pleased to tell you that the Air Force Reserve continues to be
    a force of choice for the Air Force and the warfighting commanders, as
    we respond swiftly to each phase of the Global War On Terrorism (GWOT).
    We focus our attention on our people to assure they are provided the
    full spectrum of training opportunities, enhancing their war-fighting
    skills, the capabilities of the Air Force Reserve, and thus, the
    capabilities of the Air Force.
        As we strive to retain our best and brightest, we must continue to
    reward them through compensation and benefits. We continue to challenge
    our family support personnel, commanders, and first sergeants to find
    improved ways to look after the families who remain while our members
    deploy. We reach out to their employers with our thanks for their
    sacrifice and support. We encourage open dialogue among the troops, and
    from the troops, through their chain of command, to me, to exchange
    ideas and receive feedback. Finally, it is critical to partner with you
    to ensure we remain the strongest air and space force in the world.
        The Air Force is a team--we train together, work together, and
    fight together. Wherever you find the United States Air Force, at home
    or abroad, you will find the active and Reserve members working side-
    by-side, trained to one tier of readiness, READY NOW! and that's the
    way it should be.

                                   RECRUITING

        In fiscal year 2002, Air Force Reserve Command (AFRC) exceeded its
    recruiting goal for the second year in a row. This remarkable feat was
    achieved through the outstanding efforts of our recruiters, who
    accessed 107.9 percent of the recruiting goal, and through the superb
    assistance of our Reserve members who helped tell our story of public
    service to the American people. Additionally, AFRC was granted
    permission by the Assistant Secretary of the Air Force, Manpower and
    Reserve Affairs, in coordination with the Under Secretary for Defense
    (Personnel and Readiness), to surpass its fiscal year 2002 end-strength
    due to the ongoing support of current operations. AFRC end strength
    reached 102.59 percent of congressionally authorized requirements.
        Several initiatives contributed to Air Force Reserve recruiters
    once again leading the Department of Defense in annual accessions per
    recruiter. For example, in fiscal year 2001, AFRC permanently funded 50
    recruiter authorizations through accelerated authorizations and
    appropriations by the Congress, we extended the much appreciated
    Congressional action through the Programmed Objective Memorandum
    process. Further, they instituted a new 1-800 call center, redesigned
    the recruiting web site, launched an advertising campaign targeting
    those accessed from other services, and re-energized the ``Get One''
    program, whereby Air Force Reserve members receive incentive awards for
    referrals and accessions given to recruiters.
        Moreover, AFRC received permanent funding for an ``off-base'' real
    estate program to set up offices in malls and other high visibility
    areas. This initiative was desperately needed to provide recruiters
    greater exposure in local communities and access to non-prior service
    (NPS) applicants--a significant recruiting requirement since the active
    duty drawdown.
        While fiscal year 2002 was an outstanding year for Recruiting,
    fiscal year 2003 is shaping up to be a very challenging year. A
    personnel management program, ``Stop-Loss,'' was implemented for Air
    Force members. Historically, Reserve Recruiting accesses close to 25
    percent of eligible separating active duty Air Force members (i.e. no
    break in service), accounting for a significant portion of annual
    accessions. Although Stop-Loss has since been terminated, the continued
    high OPS/PERS tempo may negatively impact our success in attracting
    separating airmen. As a result, Recruiters will have a difficult task
    accessing through other sources, including NPS, Air Force separatees
    with a break in service, and accessions from other service's former
    members.
        Additionally, one of the biggest challenges for recruiters this
    year is a shortage of Basic Military Training (BMT) and technical
    training school (TTS) quotas. BMT and TTS allocations have not kept
    pace with increasing NPS recruiting requirements. Specifically,
    Recruiting Services enlisted almost 1,500 applicants in fiscal year
    2002 without BMT and TTS dates. We are working closely with Air Force
    Specialty Code Functional Managers (FAMs) and the personnel community
    to increase the future number of BMT and TTS quotas available. In the
    interim, when we cannot match Basic Training and Technical Training
    Schools back-to-back, new airmen can complete basic training, report
    back to their unit for orientation and local training, then attend
    their technical school at a later date convenient to both the Air Force
    Reserve and the applicant.
        Finally, while overall end-strength of the Air Force Reserve
    exceeds 100 percent, some career-fields are undermanned. To avoid
    possible readiness concerns, recruiters will be challenged to guide
    applicants to critical job specialties. To assist in this effort, we
    continually review enlistment bonus listings to achieve parity with
    active duty listings for our airmen in these critical career-fields. It
    is an on-going management process involving all levels from career
    advisors to those of you on this committee to look into the future,
    anticipate the high demand specialties, and increase bonuses to balance
    supply and demand.

                                   RETENTION

        Retention is a major concern within the Air Force Reserve. With the
    lifting of Stop Loss and extended partial mobilizations, the full
    impact on Reserve retention remains to be seen. Nevertheless, our over-
    all enlisted retention rate of 86 percent for fiscal year 2002 exceeded
    the five year average. For officers, retention remains steady at
    approximately 92 percent.
        We continue to look at viable avenues to enhance retention of our
    reservists. We are exploring the feasibility of expanding the bonus
    program to our Active Guard and Reserve (AGR) and Air Reserve
    Technician (ART) members; however, no decision has yet been made to
    implement. In addition, the Aviation Continuation Pay (ACP) continues
    to be offered to retain our rated AGR officers. The Reserve has made
    many strides in increasing education benefits for our members, offering
    100 percent tuition assistance for those individuals pursuing an
    undergraduate degree and continuing to pay 75 percent for graduate
    degrees. We also employ the services of the Defense Activity for Non-
    Traditional Education Support (DANTES) for College Level Examination
    Program (CLEP) testing for all reservists and their spouses. These are
    our most notable, but we continue to seek innovative ways to enhance
    retention whenever and wherever possible.

                          QUALITY OF LIFE INITIATIVES

        In an effort to better provide long term care insurance coverage
    for its members and their families, the Air Force Reserve participated
    in the Federal Long Term Care Insurance Program (a commercial insurance
    venture sponsored by the Office of Personnel Management). This program
    affords members of the Selected Reserve insurance coverage for a
    variety of home and assisted living care requirements. Legislative
    changes are being pursued to open program eligibility to those members
    who are ``gray area.'' The Air Force Reserve expanded its Special Duty
    Assignment Pay (SDAP) program to include an additional 17 traditional,
    7 Active Guard and Reserve (AGR), and 10 Individual Mobilization
    Augmentee (IMA) Air Force Specialty Codes, and continues to advance
    staff efforts to mirror the active duty SDAP program. Additionally, an
    initiative to pay Congressionally authorized SDAP to members performing
    inactive duty for training was approved on the thirteenth of February,
    this year.

                                THE BIG PICTURE

        We have learned much from the events of September 11, 2001, as it
    illustrated many things very clearly, not the least of them being the
    need for a new steady state of operations demanding more from our
    people and our resources. Within hours, and in some cases within
    minutes of the terrorist attacks, AFRC units throughout the country
    were involved in transporting people and resources to aid in the
    massive humanitarian relief effort. Air Force Reserve aeromedical
    evacuation (AE) aircrews were among the first to respond and provided
    almost half of the immediate AE response provided. However, the larger
    need was mortuary affairs support, of which the Air Force Reserve
    provides 75 percent of Air Force capability. Again, one hundred eighty-
    six trained Reservists immediately stepped forward, in volunteer
    status, for this demanding mission. Reserve airlift crews were among
    the first to bring in critical supplies, equipment and personnel,
    including emergency response teams from the Federal Emergency
    Management Agency (FEMA), fire trucks, search dogs, and earth moving
    equipment. F-16 fighters and KC-135/KC-10 air refueling tankers
    immediately began pulling airborne and ground alert to provide combat
    air patrol support over major U.S. cities.
        In direct support of OPERATION ENDURING FREEDOM (OEF), Air Force
    reservists have flown a multitude of combat missions into Afghanistan.
    Most notably, the 917th Wing at Barksdale AFB, Louisiana (B-52s), the
    419th Fighter Wing at Hill AFB, Utah (F-16s), the 442d Fighter Wing at
    Whiteman AFB, Missouri (A-10s) and the 926th Fighter Wing at NAS Joint
    Reserve Base, New Orleans (A-10s). Reserve aircrews have flown C-17
    airdrop missions into Afghanistan delivering humanitarian aid, provided
    refueling tanker crews and support personnel from the 434th Air
    Refueling Wing at Grissom ARB, IN, and 349th Air Mobility Wing at
    Travis AFB, California (KC-10). Additionally, Air Force Reserve F-16
    units have been involved in support of Noble Eagle by flying combat air
    patrols over American cities (301st Fighter Wing, JRB NAS Fort Worth,
    Texas, 482d Fighter Wing, Homestead ARB, Florida, and 419th Fighter
    Wing, Hill AFB, Utah). Our AWACS associate aircrew from Tinker AFB, OK,
    flew 13 percent of the OPERATION NOBLE EAGLE sorties with only 4
    percent of the Total Force crews. Air Force Reserve C-130s with their
    aircrew and support personnel, under the direction of NORAD, in support
    of OPERATION NOBLE EAGLE, provided alert for rapid CONUS deployments of
    Army and Marine Quick response Forces and Ready Response Forces.
    Reserve units were also refueling those combat air patrol missions with
    refueling assets from various Reserve wings. Also in direct support of
    OPERATIONS ENDURING FREEDOM/NOBLE EAGLE, Air Force space operations'
    reservists have conducted Defense Meteorological Satellite Program
    (DMSP), Defense Support Program (DSP), and Global Positioning Satellite
    (GPS) operations, providing critical weather, warning, and navigation
    information to the warfighter. Additionally, Air Force reservists have
    supported Aerospace Operations Center efforts providing COMAFSPACE with
    situational awareness and force capabilities to conduct combat
    operations at all levels of conflict.
        Also, to date in support of OPERATION IRAQI FREEDOM (OIF), we have
    seen our reservists make huge contributions to each discipline key to
    its ongoing success. In strategic airlift, we contributed 45 percent of
    the C-17 support, 50 percent of the C-5 support, and 90 percent of the
    C-141C aircraft to not only move the people and supplies into theater,
    but to repatriate the Prisoners of War (POW) after their amazing
    recoveries. Intra-theater operations have also been critical to the
    success of the Operation, thus far. We have supplied 25 percent of the
    KC-10 and KC-135 support for theater refueling and 45 percent of
    aeromedical evacuation of the injured. Many thanks to you for your help
    in procuring cutting edge medical equipment such as Modular medical
    capability that allowed us to safely transport the injured. Our F-16s,
    B-52s, and A-10s, outfitted with the LITENING II pods and integrated
    with Army assets on the ground, through the Situation Awareness Data
    Link (SADL), proved invaluable for Strategic Attack, Close Air Support,
    and hunting down SCUD missiles. Three more areas that become more
    critical with each conflict are Special Operations, Combat Rescue, and
    Space Operations. Again, the Air Force Reserve plays a significant role
    in their success and support to the mission. We provided 33 percent of
    the HC-130 and HH-60 combat rescue, 62 percent of the Special
    Operations crews, and more than 900 space operators, providing
    Battlefield Situational Awareness key to the Commander's decision loop
    at all levels.
        What makes these units and individuals unique is the fact that our
    reservists have demonstrated time and time again, the success of an all
    volunteer force. In fact, many of those who were mobilized, had
    volunteered to perform duty, and day to day, a significant percentage
    of Air Force missions are performed through or augmented by AFRC. We
    are no longer a force held in reserve solely for possible war or
    contingency actions--we are at the tip of the spear. The attacks on our
    freedom--on our very way of life--cemented the Total Force policy
    already in place and AFRC continues to work shoulder-to-shoulder with
    the Active Duty (AD) and Air National Guard (ANG) components in the
    long battle to defeat terrorism.
        Effective modernization of Air Force Reserve Command (AFRC) assets
    is our key to remaining a relevant and combat ready force. It is
    apparent to all, that the Reserve Component is crucial to the defense
    of our great nation and our modernization strategy is sound, but is
    dependent upon lead command funding. AFRC has had limited success in
    getting the lead commands to fund our modernization requirements (CCIU
    and C-17 sim are two examples), but unfortunately lead command funding
    of AFRC modernization priorities remains below the level needed to
    maximize our capabilities. Although the National Guard and Reserve
    Equipment Appropriation (NGREA) funding helps offset some of these
    modernization shortfalls, the level of funding precludes us from
    addressing our larger modernization priorities. Success in meeting our
    modernization goals depends on robust interaction with the lead
    commands and in keeping Congressional budgeting authorities informed of
    AFRC initiatives.

                             INTEGRATING OPERATIONS

        AFRC made major Air Expeditionary Force (AEF) contributions in
    fiscal year 2002. We met virtually 100 percent of both aviation and
    combat support commitments, by deploying over 20,700 volunteers
    overseas and another 12,600 supporting homeland defense, in volunteer
    status. The challenge for 2003 will be to meet ongoing AEF commitments
    with volunteers from a Reserve force which has had much of its
    operations and combat support mobilized for homeland defense and the
    war on terrorism. As of today, over 12,000 Air Force Reservists are
    mobilized, and thousands more continue to provide daily support as
    volunteers. Over 1,500 of those mobilized are Individual Mobilization
    Augmentees (IMAs), providing critical support to the Unified Commands,
    active component MAJCOMs, and various defense agencies supporting
    Homeland Security and OPERATION ENDURING FREEDOM. Required support
    functions span the entire breadth of Reserve capabilities including
    security forces, civil engineering, rescue, special operations,
    strategic and tactical airlift, air refueling, fighters, bombers,
    AWACs, command and control, communications, satellite operations,
    logistics, intelligence, aerial port, services, mission support, and
    medical.

                              AEF CY02--IN REVIEW

        2002 ended as it began, in transition. It began with surging
    requirements brought on by the GWOT. To manage the surge, we remained
    true to the AEF concept to hold the negative impact of operations and
    personnel tempos to a minimum. AFRC was meeting the new taskings
    brought on by the war and the associated mobilizations while at the
    same time meeting AEF commitments we made prior to September 11. From
    the AFRC AEF Cell perspective it was a magnificent effort by all the
    wings in the command to meet the challenges. The full impact is
    appreciated when it is understood we did not ask to be relieved of any
    AEF tasking, met all new ONE/OEF taskings, and were still able to find
    volunteers to help fill other identified shortfalls. As the year ended,
    we transitioned to a lower activity level through demobilizations, but
    continued to plan for a potential new demanding operation. The constant
    is that we still have our AEF commitments, we are still meeting them,
    and we do not have any shortfalls. For next year we expect the number
    of AEF requirements to reflect the increase brought on by the war on
    terrorism. The culture change to an expeditionary air force is being
    realized through all levels of the command and is demonstrated in
    action as well as words by the response to the AEF, ONE, and OEF
    taskings of the past year.
        ARC participation is central to the AEF construct. The ARC normally
    contributes 10 percent of the Expeditionary Combat Support and 25
    percent of the aviation for steady-state rotations. Air National Guard
    (ANG) and AFRC forces make up nearly half of the forces assigned to
    each AEF, with the ARC making up the majority of forces in some mission
    areas.

                          TECHNOLOGY TO THE WARFIGHTER

    F-16 Fighting Falcon
        Air Combat Command and AFRC are upgrading the F-16 Block 25/30/32
    in all core combat areas by installing a Global Positioning System
    (GPS) navigation system, Night Vision Imaging System (NVIS) and NVIS
    compatible aircraft lighting, Situational Awareness Data Link (SADL),
    Target Pod integration, GPS steered ``smart weapons'', an integrated
    Electronics Suite, Pylon Integrated Dispense System (PIDS),and the
    Digital Terrain System (DTS).
        The acquisition of the LITENING II targeting pod marked the
    greatest jump in combat capability for AFRC F-16s in years. At the
    conclusion of the Persian Gulf War, it became apparent that the ability
    to employ precision-guided munitions, specifically laser-guided bombs,
    would be a requirement for involvement in future conflicts. LITENING II
    affords the capability to employ precisely targeted Laser Guided Bombs
    (LGBs) effectively in both day and night operations, any time at any
    place. LITENING II was designed to be spirally developed to allow
    technology advances to be incorporated as that technology became
    available, and provides even greater combat capability. This capability
    allows AFRC F-16s to fulfill any mission tasking requiring a self-
    designating, targeting-pod platform, providing needed relief for
    heavily tasked active duty units.
        These improvements have put AFRC F-16s at the leading edge of
    combat capability. The combination of these upgrades are unavailable in
    any other combat aircraft and make the Block 25/30/32 F-16 the most
    versatile combat asset available to a theater commander. Tremendous
    work has been done keeping the Block 25/30/32 F-16 employable in
    today's complex and demanding combat environment. This success has been
    the result of far-sighted planning that has capitalized on emerging
    commercial and military technology to provide specific capabilities
    that were projected to be critical. That planning and vision must
    continue if the F-16 is to remain usable as the largest single
    community of aircraft in America's fighter force. Older model Block 25/
    30/32 F-16 aircraft require structural improvements to guarantee that
    they will last as long as they are needed. They also require data
    processor and wiring system upgrades in order to support employment of
    more sophisticated precision attack weapons. They must have improved
    pilot displays to integrate and present the large volumes of data now
    provided to the cockpit. Additional capabilities to include LITENING II
    pod upgrades, are needed to nearly eliminate fratricide and allow
    weapons employment at increased range, day or night and in all weather
    conditions. They must also be equipped with significantly improved
    threat detection, threat identification, and threat engagement systems
    in order to meet the challenges of combat survival and employment for
    the next 20 years.

    A/OA-10 Thunderbolt
        There are five major programs over the next five years to ensure
    the A/OA-10 remains a viable part of the total Air Force. The first is
    increasing its precision engagement capabilities. The A-10 was designed
    for the Cold War and is the most effective Close Air Support (CAS)
    anti-armor platform in the USAF, as demonstrated during the Persian
    Gulf War. Unfortunately, its systems have not kept pace with modern
    tactics as was proven during Operation Allied Force. The AGM-65
    (Maverick) is the only precision-guided weapon carried on the A-10.
    Newer weapons are being added into the Air Force inventory regularly,
    but the current avionics and computer structure limits the deployment
    of these weapons on the A-10. The Precision Engagement and Suite 3
    programs will help correct this limitation. Next, critical systems on
    the engines are causing lost sorties and increased maintenance
    activity. Several design changes to the Accessory Gearbox will extend
    its useful life and reduce the existing maintenance expense associated
    with the high removal rate. The other two programs increase the
    navigation accuracy and the overall capability of the fire control
    computer, both increasing the weapons system's overall effectiveness.
    Recent interim improvements included Lightweight Airborne Recovery
    System (LARS) and LITENING II targeting pod integration.
        With the advent of targeting pod integration, pods must be made
    available to the A-10 aircraft. Thirty LITENING II AT pods are required
    to bring advanced weapon employment to this aircraft. AFRC looks
    forward to supporting the Precision Engagement program to further
    integrate targeting pods. Looking to the future, there is a requirement
    for a training package of 30 PRC-112B/C survival radios for 10th Air
    Force fighter, rescue, and special operations units. While more
    capable, these radios are also more demanding to operate and additional
    units are needed to ensure the aircrews are fully proficient in their
    operation. One of the A-10 challenges is resources for upgrade in the
    area of high threat survivability. Previous efforts focused on an
    accurate missile warning system and effective, modern flares; however a
    new preemptive covert flare system may satisfy the requirement. The A-
    10 can leverage the work done on the F-16 Radar Warning Receiver and C-
    130 towed decoy development programs to achieve a cost-effective
    capability. The A/OA-10 has a thrust deficiency in its operational
    environment. As taskings evolved, commanders have had to reduce fuel
    loads, limit take-off times to early morning hours and refuse taskings
    that increase gross weights to unsupportable limits.

    B-52 Stratofortress
        In the next five years, several major programs will be introduced
    to increase the capabilities of the B-52 aircraft. Included here are
    programs such as a Crash Survivable Flight Data Recorder and a Standard
    Flight Data Recorder, upgrades to the current Electro-Optical Viewing
    System, Chaff and Flare Improvements, and improvements to cockpit
    lighting and crew escape systems to allow use of Night Vision Goggles.
        Enhancements to the AFRC B-52 fleet currently under consideration
    are:
      --Visual clearance of the target area in support of other
            conventional munitions employment;
      --Self-designation of targets, eliminating the current need for
            support aircraft to accomplish this role;
      --Target coordinate updates to JDAM and WCMD, improving accuracy; and
      --Bomb Damage Assessment of targets.
        In order to continue the viability of the B-52 well into the next
    decade, several improvements and modifications are necessary. Although
    the aircraft has been extensively modified since its entry into the
    fleet, the advent of precision guided munitions and the increased use
    of the B-52 in conventional and Operations Other Than War (OOTW)
    operation requires additional avionics modernization and changes to the
    weapons capabilities such as the Avionics Midlife Improvement,
    Conventional Enhancement Modification (CEM), and the Integrated
    Conventional Stores Management System (ICSMS). Changes in the threat
    environment are also driving modifications to the defensive suite
    including Situational Awareness Defense Improvement (SADI) and the
    Electronic Counter Measures Improvement (ECMI), and integration of the
    LITENING II targeting pod. 5 LITENING II AT pods are required to
    support this important new capability.
        The B-52 was originally designed to strike targets across the globe
    from launch in the United States. This capability is being repeatedly
    demonstrated, but the need for real time targeting information and
    immediate reaction to strike location changes is needed. Multiple
    modifications are addressing these needs. These integrated advanced
    communications systems will enhance the B-52 capability to launch and
    modify target locations while airborne. Other communications
    improvements are the Global Air Traffic Management (GATM) Phase 1, an
    improved ARC-210, the KY-100 Secure Voice, and a GPS-TACAN Replacement
    System (TRS).
        As can be expected with an airframe of the age of the B-52, much
    must be done to enhance its reliability and replace older, less
    reliable or failing hardware. These include a Fuel Enrichment Valve
    Modification, Engine Oil System Package, and an Engine Accessories
    Upgrade, all to increase the longevity of the airframe.

    MC-130H Talon
        In 2006, AFRC and Air Force Special Operations Command will face a
    significant decision point on whether or not to retire the Talon I.
    This largely depends on the determination of the upcoming SOF Tanker
    Requirement Study. Additionally, the MC-130H Talon II aircraft will be
    modified to air refuel helicopters. The Air Force CV-22 is being
    developed to replace the entire MH-53J Pave Low fleet, and the MC-130E
    Combat Talon I. The CV-22 program has been plagued with problems and
    delays and has an uncertain future. Ultimately, supply/demand will
    impact willingness and ability to pay for costly upgrades along with
    unforeseeable expenses required to sustain an aging weapons system.

    HC-130P/N Hercules
        Over the next five years, there will be primarily sustainability
    modifications to the weapons systems to allow it to maintain
    compatibility with the remainder of the C-130 fleet. In order to
    maintain currency with the active duty fleet, AFRC will accelerate the
    installation of the APN-241 as a replacement for the APN-59.
    Additionally, AFRC will receive two aircraft modified from the ``E''
    configuration to the Search and Rescue configuration. All AFRC assets
    will be upgraded to provide Night Vision Imaging System (NVIS) mission
    capability for C-130 combat rescue aircraft.

    HH-60G Pave Hawk
        Combat Search and Rescue (CSAR) Mission Area modernization strategy
    currently focuses on resolving critical weapon system capability
    shortfalls and deficiencies that pertain to the Combat Air Force's
    Combat Identification, Data Links, Night/All-Weather Capability, Threat
    Countermeasures, Sustainability, Expeditionary Operations, and
    Pararescue modernization focus. Since the CAF's CSAR forces have
    several critical capability shortfalls that impact their ability to
    effectively accomplish their primary mission tasks today, most CSAR
    modernization programs/initiatives are concentrated in the near-term
    (fiscal year 2000-06). These are programs that:
      --Improve capability to pinpoint location and authenticate identity
            of downed aircrew members/isolated personnel
      --Provide line-of-sight and over-the-horizon high speed LPI/D data
            link capabilities for improving battle space/situational
            awareness
      --Improve Command and Control capability to rapidly respond to
            ``isolating'' incidents and efficiently/effectively task
            limited assets
      --Improve capability to conduct rescue/recovery operations at night,
            in other low illumination conditions, and in all but the most
            severe weather conditions
      --Provide warning and countermeasure capabilities against RF/IR/EO/DE
            threats
      --Enhance availability, reliability, maintainability, and
            sustainability of aircraft weapon systems.

    WC-130J Hercules
        The current WC-130H fleet is being replaced with new WC-130J
    models. This replacement allows for longer range and ensures weather
    reconnaissance capability well into the next decade. Once conversion is
    complete, the 53rd Weather Reconnaissance Squadron will consist of 10
    WC-130J's. Presently, there are seven WC-130J models at Keesler AFB, MS
    undergoing Qualification Test and Evaluation (QT&E). The remaining
    three aircraft have been transferred to AFRC and are currently at
    Lockheed Marietta scheduled for delivery to Keesler AFB. Deliveries are
    based on the resolution of deficiencies identified in test and will
    impact the start of operational testing and the achievement of interim
    operational capability (IOC). Major deficiencies include: propellers
    (durability/supportability), radar modification to correct (range to
    range inconsistencies), tilt and start up blanking display errors and,
    SATCOM transmission deficiencies. AFRC continues to work with the
    manufacturer to resolve the QT&E documented deficiencies.

    C-5 Galaxy
        Over the next five years, there will be sustainability
    modifications to the weapon system to allow it to continue as the
    backbone of the airlift community. The fleet will receive the avionics
    modernization which replaces cockpit displays while upgrading critical
    flight controls, navigational and communications equipment. This will
    allow the C-5 to operate in Global Air Traffic Management (GATM)
    airspace. Additionally, the C-5B models and possibly the C-5As, will
    undergo a Reliability Enhancement and Re-engining program which will
    not only replace the powerplant, but also numerous unreliable systems
    and components. The 445th Airlift Wing at Wright Patterson AFB, OH will
    transition from C-141 Starlifters to C-5As in fiscal year 2006 and
    fiscal year 2007. Finally, the 439th Airlift Wing at Westover ARB, MA
    will modernize its C-5 fleet in fiscal year 2007 and fiscal year 2008
    when it transitions from C-5As to C-5Bs.

    C-17 Globemaster
        Beginning in fiscal year 2005, the Air Force Reserve Command will
    enter a new era as the 452nd Air Mobility Wing at March Air Reserve
    Base, CA transitions from C-141s to C-17 Globemasters. Although
    reservists have been associating with active C-17 units since their
    inception in the active Air Force, March ARB will be the Command's
    first C-17 Unit Equipped Unit and will aid in maintaining diversity in
    the Reserve Command's strategic mobility fleet.

    C-141 Starlifter
        For the past 30 years, the C-141 has been the backbone of mobility
    for the United States military in peacetime and in conflict. In the
    very near future, the C-141 will be retired from the active-duty Air
    Force. However, AFRC continues the proud heritage of this mobility
    workhorse and will continue to fly the C-141 through fiscal year 2006.
    It is crucial that AFRC remains focused on flying this mission safely
    and proficiently until units convert to follow-on missions.
        Replacement missions must be more than the insertion of another
    airframe. They must be a viable mission that includes modernized
    equipment.

    C-130 Hercules
        AFRC has 127 C-130s including the E, H, J and N/P models. The
    Mobility Air Forces (MAF) currently operates the world's best theater
    airlift aircraft, the C-130, and it will continue in service through
    2020. In order to continue to meet the Air Force's combat delivery
    requirements through the next 17 years, aircraft not being replaced by
    the C-130J will become part of the C-130X Program. Phase 1, Avionics
    Modernization Program (AMP) program includes a comprehensive cockpit
    modernization by replacing aging, unreliable equipment and adding
    additional equipment necessary to meet Nav/Safety and GATM
    requirements. Together, C-130J and C-130X modernization initiatives
    reduce the number of aircraft variants from twenty to two core
    variants, which will significantly reduce the support footprint and
    increase the capability of the C-130 fleet. The modernization of our C-
    130 forces strengthens our ability to ensure the success of our
    warfighting commanders and lays the foundation for tomorrow's
    readiness.

    KC-135E/R Stratotanker
        One of AFRC's most challenging modernization issues concerns our
    unit-equipped KC-135s. Five of the seven air refueling squadrons are
    equipped with the KC-135R, while the remaining two squadrons are
    equipped with KC-135E's. The KC-135E, commonly referred to as the E-
    model, has engines that were recovered from retiring airliners. This
    conversion, which was accomplished in the early-mid 1980s, was intended
    as an interim solution to provide improvement in capability while
    awaiting conversion to the R-model with its new, high-bypass, turbofan
    engines and other modifications. AFRC's remaining two E-models units
    look forward to converting to R-models in the very near future. The
    ability of the Mobility Air Forces (MAF) to conduct the air refueling
    mission has been stressed in recent years. Although total force
    contributions have enabled success in previous air campaigns,
    shortfalls exist to meet the requirements of our National Military
    Strategy. AMC's Tanker Requirements Study-2005 (TRS-05) identifies a
    shortfall in the number of tanker aircraft and aircrews needed to meet
    global refueling requirements in the year 2005. There is currently a
    shortage of KC-135 crews and maintenance personnel. Additionally, the
    number of KC-135 aircraft available to perform the mission has
    decreased in recent years due to an increase in depot-possessed
    aircraft with a decrease in mission capable (MC) rates. An air
    refueling Mission Needs Statement has been developed and an Analysis of
    Alternatives (AoA) will be conducted to determine the most effective
    solution set to meet the nation's future air refueling requirements.

                                 FUTURE VECTOR

        As we think about our future, the nature of warfighting, and the
    new steady state, we anticipate many challenges. While this new mission
    activity continues, we need to keep our focus--assess the impact of
    Stop Loss on our operations, provide adequate funding for continuing
    activations, and keep an eye on sustaining our recruiting efforts. The
    challenge will be to retain our experience base and keep our prior
    service levels high.
        With your continued support, and that which you have already given,
    we will be able to meet each new challenge head-on, without
    trepidation.
        Our Citizen Airmen, alongside the Active Duty and the Air National
    Guard, continue to step through the fog and friction as we prosecute
    the GWOT. Our support for them is not just in the battlespace, but at
    home. We will continue to refine the ways we support their families,
    their employers, and the members themselves as we keep the lines of
    communication open to you. We must ensure that we are doing as much for
    them through increased pay, benefits, and finding the right mix between
    equity and parity with their Active Duty counterparts, as we continue
    to ask more and more of them. We must continue to think outside the
    box, to protect their rights as students who are called away from an
    important semester, as employees who must turn that big project over to
    someone else in the company for a while, and just as critically, as
    sons, daughters, husbands, wives, and parents who will miss birthdays,
    graduations, and a litany of other events many of us take for granted.
        We are making strides at leveling the operations tempo by finding
    the right skill mix between the ARCs and the AD. In a Total Force
    realignment of scarce Low Density/High Demand (LD/HD) resources, the
    939th Rescue Wing's HC-130s and HH-60s will transfer to the active
    component in order to reduce the Total Force PERSTEMPO in the LD/HD
    mission of Combat Search and Rescue. The transfer of these assets to
    the active component increases full-time personnel without increasing
    already high volunteerism rates or having to mobilize a significant
    number of CSAR reservists. The activation of the 939th Air Refueling
    Wing, Portland, OR addresses the need for more aerial refueling assets
    on the West coast enhancing our ability to rapidly respond to any
    crisis.
        Additionally, AFRC has assumed responsibility for supporting the
    National Science Foundation DEEP FREEZE mission. The next three years,
    the men and women of the 452nd AMW at March ARB, CA, will be flying C-
    141 support missions in support of this Antarctic operation. We have
    also assumed 16 percent of the total force Undergraduate Pilot Training
    programs at seven bases around the United States and we continue to
    balance, assume, and relinquish missions or parts of missions to
    accommodate the goals of the Air Force and Department of Defense as
    world events unfold and dictate change, and as necessary to lessen the
    burden on our members and the AD.
        All of the distinguished members on the committee, and we in the
    Air Force and Air Force Reserve, have been given an incredible
    opportunity and an incredible responsibility to shape not only the
    structure of the world's premiere air and space force, but to shape its
    environment--its quality people, and the quality of their lives. Our
    mission will continue to be accomplished more accurately, more timely,
    and with an even greater pride, as we focus on our best resource.
        These and other evolving missions are just some of the areas into
    which we hope to continue to expand, keeping reserve personnel
    relevant, trained, and READY NOW when we are called. I'd like to extend
    my thanks again to the committee for allowing me the opportunity to
    testify before you here today and for all you do for the Air Force
    Reserve.

        Senator Stevens. Well, thank you all. The actions of your
    people and your supervision of them more than validated all the
    work that we've done to try to upgrade the reserve and to make
    certain that it had the equipment, you all had the equipment to
    train and to deploy that would be needed.

                               RETIREMENT POLICY

        You sat through the questions that we had for your
    predecessors. If you have any comments about those, we would be
    glad to have them, but I've been thinking about the problem of
    a total force and what it means to be deployed as often as we
    have had people deployed during these past years going back to
    Bosnia and Kosovo, and even back further than that into Panama
    and various other problems, and I wonder if you've ever thought
    about the concept of active Guard Reserve having a multiplier
    for the retirement credit for the times they actually serve in
    combat status. Any of you ever reviewed that, some added
    incentive, really reward for those who do answer the call?
        We've had people go through prolonged periods of peacetime
    who had reserve credits towards retirement, but I think when
    these people are called up, particularly under the
    circumstances that we've had in the past few years, there
    should be a change in the retirement system so that there's a
    recognition for those who have answered the call, and I think
    it would be an incentive for those who might be called up to
    respond. Do you have any comments about that? Admiral.
        Admiral Totushek. If I may, Mr. Chairman, everywhere I go
    today people ask me about a change in the retirement policy and
    this, of course, was proposed last year to lower the retirement
    age for reservists down to age 55.
        I understand that in the form that it was presented it was
    a very big bill to the country, but it seems to me there has to
    be some recognition of, if we're going to use reservists more
    often, that we in fact do recognize the fact that they are no
    longer weekend warriors and are very much a part of the total
    force, so I think an idea like that, or an idea that combines
    something that allows them to get a little bit of their
    retirement a little bit earlier, if it makes sense for them,
    would make sense for all the reserve components.
        Senator Stevens. Well, this would make their retirement
    come earlier. If you had 2 years' service and it gave you 4, or
    maybe 6 years' credit to your retirement, then obviously you're
    going to get it sooner.
        Admiral Totushek. Right.
        Senator Stevens. Because it is a combination of age and
    total service, isn't it?
        Admiral Totushek. Yes. It's your number of points that you
    earn, and those basically are done by the year, and this
    would--an idea like that, but there is an idea out there
    somewhere, if we put all these things together, that's going to
    work for our people.
        Senator Stevens. I will ask for a review of that and see if
    we can get some studies made. There ought to be some
    recognition so that those--we're in a situation where some
    people are not called up, and they will go through and get the
    same retirement as those who were, and I think there ought to
    be some mark on the wall for having answered the call to duty,
    and for those people who are already on duty to have intensive
    duty as compared to just normal peacetime service, but it's one
    of those things--is there anything you're doing now to assure
    that we're going to meet the recruiting goals in the future?
    Are we going to have a drop-off now?
        We had an increase in volunteerism, I'm sure you know, a
    spike there, as this whole situation built up, but I think now
    that this is over, there's sort of a lull that comes. What are
    your plans for recruiting in this post-war period? We're not
    there yet, but it's coming soon, I assume.
        General Helmly. Senator, if I may, for the Army we went
    back and I looked at Desert Shield/Desert Storm as a point in
    time. We experienced--since Desert Shield/Desert Storm, the
    soldiers who served in Desert Shield/Desert Storm, that cohort
    group has attrited since then by about 85 percent. I've been
    unable to break that, the number who, if you will, left as
    opposed to those who completed a term of service, that is,
    retired after 20 years, and I might add one correction. Your
    proposal regarding retirement under current law, though, would
    still not allow the reserve member to receive benefits from
    retirement until age 60. They might get there faster, but
    wouldn't get any benefits.
        Senator Stevens. I may not have explained it, but I would
    reduce----

                                   ATTRITION

        General Helmly. Yes, sir, okay.
        Senator Stevens [continuing]. The age by the equivalent
    amount.
        General Helmly. I understand.
        Senator Stevens. So that if you served 5 years and you're
    supposed to retire at 65, you would actually be able to stand
    down at 55.
        General Helmly. Yes, sir. But regarding attrition, for
    myself, I dare say for all of us, in an all-volunteer force,
    that is something we cannot take for granted. We're addressing
    that. I proposed to the Department of the Army that we retain a
    stop-loss in place. That stop-loss is good for the period of
    mobilization plus 90 days. I've asked for that solely because
    we wish to have the soldier deal, not with emotions and
    external pressures, but, rather, facts. It is a very volatile
    situation.
        Where we are today, if we retain the current stop-loss in
    place, based on the number we have mobilized and just the
    physical factors of how fast you can bring them back home and
    demobilize them in a humane, considerate sort of way, we will
    exceed our end strength at the end of fiscal year 2003 by as
    much as 9,000. Our end strength is 205. We have projections we
    could come in at 214. In turn, our worst case attrition model
    says that we could come in as low as 192 at the end of next
    fiscal year 2004, so I will tell you that it is an extremely
    volatile situation.
        My biggest concern falls in the area of professional
    medical staff. Two-thirds of the Army's combat medical care is
    resident in the Army Reserve. Our highest attrition rates are
    suffered by our professionals in the AMEDD field, self-
    employed. In fact, we put them some years ago on a 90-day
    rotation model to be considerate of not breaking private
    practices, so I don't have any ready-made solutions, other than
    to say we're putting a full court press on, to include starting
    tomorrow, myself, personally, going out to hold town hall
    meetings with soldiers that we have mobilized, and we have
    about 25,000 in this category that we have mobilized in less
    than 10 days' notice, gotten trained, and gotten certified for
    deployment, but the war was over quickly, and they're hung up
    literally at a mobilization station waiting for us to either
    demobilize them, give them a subsequent mission in another part
    of the world, or send them to the desert and bring another unit
    home, but again, the law of physical mass applies in terms of
    strategic lift transportation, what kind of unit is needed in
    theater, sequencing that, et cetera.
        So I would just close by saying there's a passage in a new
    book out, and I apologize, I don't remember the author's name.
    The book is, The Principles of War for the Information Age. One
    of the passages in that book deals with the requirement for
    precision mobilization. That is what I alluded to in my remarks
    when I said that largely the policies, practices, procedures
    that we employ in the Department with regard to the
    mobilization and use of reserve members were designed for an
    age which is no longer with us; that is, a mobilization of
    masses of people over a long period of time with subsequent
    demobilization of virtually everyone. We just have to come to
    grips with that and develop the procedures, policies, and
    practices to be more precise and, in so doing, very considerate
    of people and their employers.
        Senator Stevens. Well, I do appreciate that. Do any of the
    other of you have comments? I do want to make one request, and
    I'm sure Senator Cochran's got some questions, but I'd like to
    have each of you for the record provide us information about
    the percentage of your people who actually stay in your service
    to retirement time, as compared to the volume that come through
    your reserve units.
        How many of them really stay with you to retirement,
    particularly with the age you mentioned, 65? That would be
    interesting for us to look at, because I think there ought to
    be some greater incentive to keep people through at least the
    50, 55 age group, and I'd like to see where that break-off is.
    Where do they start fluffing off and saying, this is not worth
    it?
        General Helmly. We can get you that data. We've got that.
        [The information follows:]

                                   Retirement

        The following information is presented to provide a short
    introduction to the current retirement program for members of the Air
    Force Reserve as set forth by provisions found in 10 United States
    Code, Sections 12731, 8911, and 8914. The most notable distinction
    between reserve (non-regular) retirement and active duty (regular
    retirement) is that reservists do not receive retired pay until
    attaining age 60 while active duty (regular retirees) receive an
    immediate annuity upon retirement.
        The Retired Reserve consists of two categories of members. The
    first category is composed of those members that are actually receiving
    retired pay. The second category is composed of those members who have
    met all requirements for retired pay EXCEPT for the attainment of age
    60. The Reserve components use age 60 as the ``cut-off'' for retirement
    as public law prohibits military service past age 60 (with the
    exception of general officers, chaplains, and those officers in medical
    specialties). Originally, the age 60 retired pay eligibility
    corresponded to the retirement age for federal civil service. The
    retirement age for full civil service annuity was lowered to 55 over 25
    years ago.
        Members must complete at least 20 years of satisfactory service to
    attain eligibility for retired pay (a satisfactory year is a year in
    which a member earns 50 or more ``points'' toward retirement).
    Additionally, the last six or eight qualifying years of this service
    must have been served in the Reserve component (as directed by changes
    in public law). The 2003 National Defense Authorization Act made
    permanent the six-year requirement for qualifying duty in the Reserve
    component.
        Retired pay for active duty members who first joined any military
    service on or after September 8, 1980 is computed using the average of
    the highest 36 months of base pay and the member's grade and years of
    service. Members qualifying to retire under the ``active duty''
    retirement provision (Sections 8911 and 8914), and who have a ``date of
    initial entry to military service'' on or after August 1, 1986 may
    elect to receive a career status bonus at the 15-year point. However,
    their retired pay will be computed using 40 percent of the ``high-
    three'' years of service for 20 years and additional 3.5 percent for
    each additional year up to a maximum of 75 percent. As with any
    retirement plan, the greater the time of satisfactory service, the
    greater the retirement pay at the culmination of the career. This
    provides an increased incentive for members to stay longer in the
    Reserve component.

                      RESERVE COMPONENT RETIREMENT SYSTEM

        Qualification for payment of retired pay for non-regular service
    (Reserve component retirement) is outlined in Title 10, United States
    Code 12731. It requires that the person:
      --Is at least 60 years of age;
      --Has performed at least 20 years of service; and
      --Performed the last six years of qualifying service while a member
            of the Reserve components.
        Regardless of the total number of years served beyond 20 years,
    receipt of retired pay is delayed until age 60.
        The only monetary incentive for participation beyond 20 years of
    service (assuming member has served at least the last six in the RC) is
    the payment of duty performed and the accumulation of additional points
    to increase the value of the members retirement pay upon receipt at age
    60.
        Reduction of receipt of retired for RC members acknowledges the
    contribution of these members when DOD is asking more and more of these
    citizen airman, soldiers, sailors, marines and coast guardsmen.
        Analysis of Congressional bills introduced in the 108th Congress:

    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               H.R. 331                                            H.R. 742                                             S. 445
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Introduced By.......................  Rep Wilson (R-2-SC)...............................  Rep Saxton (R-3-NJ)...............................  Sen Landrieu (D-LA)
    Title...............................  Armed Forces Retirement Equity Act................  To amend title 10 United States Code, to reduce     Reservists Retirement and Retention Act of 2003
                                                                                               the age for receipt of military retired pay for
                                                                                               non-regular service from 60 to 55.
    Requirement of Bill.................  Member qualifies for receipt of retired pay at 20   Reduces receipt of retired pay to age 55, assuming  Reduces receipt of retired pay by 1-year for every
                                           years of service, assuming all other requirements   all other requirements of 10 U.S.C. 12731 are met.  2 years the member serves beyond 20, assuming all
                                           of 10 U.S.C. 12731 are met.                                                                             other requirements of 10 U.S.C. 12731 are met,
                                                                                                                                                   not to be reduced below age 55
    Pros................................  (1) Pays retirement immediately, based on same      (1 Reservist waits 5-years less for receipt of      (1) Encourages service beyond 20-years to increase
                                           length of service commitment as active duty         retirement pay; (2) Recognizes and rewards the      the value of members retirement pay and thus
                                           members; (2) Incentive for prior active service     increased use of RC members; (3) Possible           reduce age for receipt of payment; (2) Retention
                                           members to join the RC.                             incentive for prior active service members to       tool of current RC members and recruiting tool of
                                                                                               join the RC; (4) Reduces the pay gap between        prior active service members--good deal for the
                                                                                               actual retirement and receipt of retired pay at     RC; (3) Members continued service beyond 20
                                                                                               age 60.                                             determines the receipt of retired pay before age
                                                                                                                                                   60; (4) Reduces the pay gap between actual
                                                                                                                                                   retirement and receipt of retired pay at age 60
    Cons................................  (1) No incentive for continued service beyond 20    (1) Little incentive for continued service beyond   (1) Increased cost, but as member continues to
                                           years; (2) Cost prohibitive; (3) To make the        20 years--Not a good deal for the RC; (2)           participate, additional dollars are added to the
                                           proposal cost neutral, would have to reduce the     Increased cost to pay 5-years early and to          retirement accrual account thus reducing the up
                                           value of each retirement point significantly,       include current gray-area Reservists between age    front bill to the services required in H.R. 742
                                           thus value of monthly retired pay is reduced.       55 and 59; (3) Includes these members and their
                                                                                               dependents in the TRICARE Health Program 5-years
                                                                                               early.
    Costs...............................  Unknown; highest cost.............................  Unknown; middle cost..............................  Unknown; lowest cost
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                         naval reserve retirement data
        The following chart shows the percentage of Naval Reservists that
    became eligible for retirement for the past four years (1999-2002).

    ----------------------------------------------------------------------------------------------------------------
                                                                         Drilling      # of Notices
                                  Year                                    Reserve     of Eligibility      Percent
                                                                         Strength     for Retirement
    ----------------------------------------------------------------------------------------------------------------
    1999............................................................          70,872           3,200             4.5
    2000............................................................          64,163           3,163             4.9
    2001............................................................          69,636           2,754             4.0
    2002............................................................          73,142           2,724             3.7
    ----------------------------------------------------------------------------------------------------------------

        Senator Stevens. Thank you. Admiral, do you have any
    comments?
        Admiral Totushek. Yes, and in our case actually, because as
    I was saying, with some of the mobilizations, that actually
    increased and helped us, I believe, drive down the attrition
    that we've experienced historically in the Naval Reserve. I
    actually lowered my recruiting goal by 2,000 for my enlisted
    people this year. The war had a little bit more impact on
    officers and my officer recruiting has dipped off a little bit.
    We're working hard to try and get that up by the end of the
    year, but in the near term we don't see a big impact on us.
        Now, we're going to carefully measure and again survey to
    find out exactly what the implications are after the second
    large mobilization in a row, and I think this additive thing is
    a thing we're going to have to deal with, now that we're
    looking at two big ones right back to back. That will have some
    impact, and we're just going to have to assess what it is.
        Senator Stevens. General McCarthy.
        General McCarthy. Senator, I would like to just make the
    point that this question of retention and so forth is another
    one of those indications that one size doesn't fit all in terms
    of the various Armed Services. The Marine Corps Reserve, just
    like the active component of the Marine Corps, is very, very
    largely a first-term force, about 70 percent. In each case,
    both the active component and reserve component are first term
    marines. We are not a long-term or a large career force like
    some of the others, and so the implications of what constitutes
    retention are different and vary by service.
        Having said that, there clearly is a portion of our force,
    most of the Officer Corps and those enlisted marines who will
    go on to be staff noncommissioned officers that we're very,
    very interested in retaining, and we'll have to study over the
    next year what the implications of that, of a prolonged
    mobilization will have on that portion of our force.
        Recruiting has continued apace while we've been deployed,
    and we've continued to meet all of our goals on recruiting, and
    so I'm less concerned about our recruiting and our ability to
    recruit in the future than I am about this issue of retention,
    but as I say, for the Marine Corps, the proportions, or the
    percentages are significantly different than my colleagues, and
    so the remedies or the tools that we need to use may be
    somewhat different as well, but it is an issue that we're very
    watchful of.
        Senator Stevens. Do you have an in-grade step increase? For
    instance, you know, in the Civil Service, if you're grade 13
    you can be grade 13 step 1 through 12, I think. Do you have
    that for sergeants in the Marines?
        General McCarthy. Yes, sir, and our pay scale is exactly
    the same as everybody else, so that a corporal with 3 years'
    service makes less money than a corporal with 4 years' service,
    and progressing on, yes, sir.
        Senator Stevens. Well, I'd be interested in what you might
    think would extend some of those people beyond one term, not
    now, but if you have any incentives in mind--you do have a
    particularly different force.
        General McCarthy. Yes, sir.

                                   RETENTION

        Senator Stevens. If you have any concept of what might lead
    people to re-up for another hitch, particularly coming from
    active to reserve for at least one additional hitch, those sort
    of things would augment the total force in a tremendous way,
    because we all know the Marines have a different focus in terms
    of mobilization, and they're needed now, you know, so it's a
    different thing.
        General Sherrard.
        General Sherrard. Yes, sir. I would tell you that, as I
    mentioned in my earlier statement, our key to success is prior
    service and retaining those members. Anything that we can do
    that would retain that member to the maximum extent possible,
    ideally for the enlisted force to their high-year tenure date,
    or for the officers to their mandatory separation date, it
    certainly would enhance our ability to keep that experience
    base that is so critical for us to do our jobs.
        As you know, and it was mentioned earlier, when you have
    attained 20 years of satisfactory service, you are eligible to
    declare yourself for retired status, realizing you're not going
    to draw pay until age 60. I'm a firm believer and have been a
    strong advocate all along that if I can keep them from 20 to 30
    years, that 10 years, every time I keep three of those members,
    that's one that I've reduced the training requirement and a
    huge training dollar cost significantly for my force and for
    this Nation. We need to keep that base there.
        So I would welcome you to look at all these options, sir,
    whether it be a multiplier, as you mentioned, for combat
    service, or whether it would be some option for service beyond
    20 years, or some incentivization that you could offer to the
    member that, as you know, all bonuses and things of that type,
    with the exception of the pilot bonus for the active duty
    members, ends at the 20 years.
        So really they're working for points that they're going to
    achieve toward retirement, but if there would be a way to
    incentivize them beyond that 20-year point, it would certainly
    be a boon, I think, for our service, and most certainly for our
    Nation.
        Senator Stevens. I shouldn't get too personal about it, but
    I remember when I moved to Alaska, the Air Force had a concept
    that you couldn't have reserve duty in a territory, and that
    meant that I would have to fly at my own expense to Seattle to
    train. Obviously, I sent a nasty letter to the Air Force and
    resigned, but I do think that there are subjective factors in
    retention that each service ought to look at. Mobility is one.
    Our people move so much now around the country, and sometimes
    the disjunctive of moving from one area to another, where
    there's no longer a unit that you can join, has a lot to do
    with retention.
        Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you very much.
        I was reminded about my reserve experiences personally as
    well. I got through law school primarily because I could earn
    money by going back on active duty in the summers and being a
    member of the teaching complement at the Officer Candidate
    School at Newport, Rhode Island, and the money I made in the
    summer I spent in the fall and the spring semesters of law
    school, so I've always had an appreciation for the opportunity
    that the Navy gave me to continue to serve while pursuing
    another career.

                          LITTORAL SURVEILLANCE SYSTEM

        I know the Navy is planning to transfer some of its
    resources in my State of Mississippi over to the Naval Station
    in Pascagoula. Admiral Totushek, I understand you're basing
    your second littoral surveillance system at the Naval Station.
    I wonder if you could tell us what role you envision this
    system playing in force protection and possibly with homeland
    security as well?
        Admiral Totushek. Thank you, Senator Cochran. We think that
    there is gold in them thar hills in this system. The Coast
    Guard is very interested in it. Just a quick little primer
    here. It is a system that allows us to integrate any kind of
    sensor that the Nation has, whether it be an unmanned sensor, a
    manned sensor, a satellite kind of sensor, and to integrate
    that to give you a total picture of an area as large as you
    would like, depending on how far out you want to employ these
    sensors, to be able to have situational awareness and, if need
    be, to mensurate targets. It's that good that it can actually
    spit out the coordinates of the targets you might be interested
    in.
        We think the implications of that for homeland security are
    immense. The Coast Guard agrees with us, and we are starting to
    talk with them about how we can integrate a Naval Reserve
    capability using this littoral surveillance system, along with
    what the Coast Guard is doing around our ports,and as they
    pointed out, in a lot of cases there are areas of interest in
    the country where there isn't a robust capability, and this
    would allow us, because it's portable, to take it to another
    part of the country where you might have an area of interest
    for a short period of time, and to take a look at something
    that may be going on in that area.
        One scenario would be, as some of these tankers and
    freighters come into our ports, that we really don't have a
    good idea of what's on them. If we had a tip that perhaps one
    of them belonged to somebody we didn't trust, we might want to
    go out and take a look at that while it's still hundreds of
    miles from our shores instead of just close in as it's entering
    the port.
        So I think there's going to be a great synergy there
    between what the Coast Guard's doing and what we're able to
    support them with in homeland security.

             NAVAL COASTAL WARFARE UNITS ROLE IN HOMELAND SECURITY

        Senator Cochran. I understand also you're planning to move
    two of your naval coastal warfare units from Gulfport,
    Mississippi, to Pascagoula Naval Station. When these units are
    not forward-deployed, what role do you see them providing in
    support of Coast Guard or homeland security missions?
        Admiral Totushek. We originally got the littoral
    surveillance system to marry up with these units that basically
    would surveil a port, and so their being right there, not only
    is it a great training opportunity for us to have the port
    there, to have the boats and have the littoral surveillance
    system, to be able to train for it, but also we now have a
    great capability for looking at not only the port of
    Pascagoula, but basically the Gulf of Mexico, and we think that
    there's a great synergy there not only to train, but to offer
    that force protection to the entire gulf as well.
        Senator Cochran. And I also understand the Navy plans to
    transfer some patrol coastal (PC) craft to the Coast Guard and
    decommission as many as eight other patrol craft. Do you see a
    role for these PCs in the Naval Reserve as well?
        Admiral Totushek. The problem with the PCs is, they're very
    expensive to operate. They're gas turbine engine ships, boats,
    and they move real fast but they burn a lot of gas, and that's
    the main reason that the Navy is interested in getting rid of
    them. They're in great shape. The Coast Guard is taking over
    six of those, I believe is the number, for use in being able to
    get out very quickly to look at contacts of interest further
    from our shores than usual.
        We have proposed the idea of the Reserve force taking over
    some of these. The problem again is the operating cost of the
    platform. We think there will be a mission area that's going to
    require something with this kind of capability. Whether that's
    the right platform or not we're still talking to the Navy
    about, but we think that it's a real capability that could be
    used not only in the gulf, but up and down the shores of the
    Nation.

                               HURRICANE HUNTERS

        Senator Cochran. General Sherrard, the Air Guard--no, the
    Air Reserve unit down in the Biloxi-Gulfport area has what they
    call hurricane hunters that go out and fly right into the eye
    of hurricanes, and they conduct surveillance. It's been a
    mission that has been unique for sometime, and I understand
    there is some conversation about transferring this. As a matter
    of fact, there's probably a proposal to transfer this to the
    National Oceanic and Atmospheric Administration (NOAA), the
    Oceanographic Administration.
        My concern is, whether or not there is a continuing need
    for weather reconnaissance that's related directly to military
    operations. I notice the hurricane hunters were deployed
    recently to Guam to conduct weather reconnaissance support of
    some operations. They also were operating last month out of
    Elmendorf, where Senator Stevens has invited me to visit on a
    couple of occasions, supporting winter weather reconnaissance
    missions there.
        What's your view about the utility of the hurricane hunters
    as a part of the military force, as opposed to transferring
    them to NOAA?
        General Sherrard. Well, sir, as you know we have been asked
    to work with NOAA to look at the transfer. In fact, there has
    been one meeting and there will be a subsequent meeting
    scheduled for the 13th, but I was told yesterday that that may
    be slipped for a week.
        I have asked our staff, and we've got some information,
    sir, and I want to be very candid with you. We're in dialogue
    with the Air Force leadership about the very issue that you
    addressed in terms of military utilization, simply because of
    the fact that we have just recently, as you know, activated
    that unit, and we are sending them--they are at Guam to do the
    mission, and there is some concern that on behalf of the
    organization that I have asked the leadership that I be allowed
    to bring to them for discussion, and until that happens, sir, I
    really can't go beyond that, but I will tell you that we're
    going to have that conversation with the leadership of the Air
    Force.
        Senator Cochran. That's good. Well, I appreciate knowing
    about that very much.

                            F/A-18 AIRCRAFT UPGRADES

        General McCarthy, my question to you has to do with the
    upgrade of the F/A-18 aircraft, bringing it to a level of
    modern capability. The upgrade includes the Global Positioning
    System (GPS) launch precision, guided munitions, et cetera.
    Could you give us an update on the plans and the likelihood for
    funding needs in this area?
        General McCarthy. Yes, Senator Cochran, I can. It's an
    overall package called the ECP-583, and it's a group of
    technologies that brings our F-18A models up to the equivalent
    of an F-18C, enables them to fire precision-guided munitions
    and some other things. It's been very successful.
        We're about 60 percent through our fleet of 48 F/A-18As,
    and there's a steady program to continue until all of those
    aircraft are completed, and the impact on the capability of
    these aircraft is phenomenal, and then fortunately our F-18As,
    which have never been used in a carrier role, therefore have an
    extended life so that with this upgrade and their extended life
    they become among the most capable F-18s that the Marine Corps
    has.
        Admiral Totushek. I'd like to point out if I could,
    Senator, that the Naval Reserve has the same kind of a program,
    slightly different nomenclature, but basically doing the same
    thing to upgrade As into what we call A pluses. We took one of
    those squadrons and deployed it into Iraqi Freedom. They flew
    combat operations and basically led that air wing with some of
    the oldest airplanes out there, but once again, as we heard
    earlier, some of our great pilots out there are doing great
    things, and we would not have been able to do it if it had not
    been the support of this committee that got us those kits that
    upgraded those airplanes, so thank you very much.
        Senator Cochran. That's interesting to know, and we
    appreciate your advice and counsel on these issues.
        General Helmly, I know that there's already been some
    discussion today about whether some units ought to be active
    duty or whether they should be reservists, but some I know,
    medical support, civil affairs, have had more than the usual
    amount of activation and active duty experience. Is this going
    to cause disruption that's a problem for Army reservists? Are
    you going to have a proposal to make about maybe transferring
    these responsibilities to active duty units, because these
    people have been in a perpetual state of activation, many of
    them, and what's your reaction to that?
        General Helmly. Senator, a couple of facts I'd like to
    cite, if I may, regarding this issue on the table of overuse.
    The first caution is that use is much different than abuse, and
    in a volunteer force one can go to the abuse side with an
    active force also, and we should be cautious of that. Admiral
    Totushek in his opening remarks cautioned similarly. I would
    say that there's concern on all of our parts here. I certainly
    speak for myself.
        The solutions put forth to date are too simple. What we'll
    do is, either we'll grow the end strength of the active
    component, or we'll transfer missions to the active component,
    which implies some sort of tradeoff. You transfer Civil
    Affairs, some number from the Army Reserve to the active
    component, and then in turn we pick up some other mission.
        I do not concur with those. There were two primary
    ingredients that went into the Abrams doctrine, and some have
    described that doctrine as outdated. I would not go down that
    road so quickly. One was political. That's the one often
    alluded to, and that was the desire on the part of General
    Abrams to ensure that we never send the Army to war again
    without the support of the American people, certainly a valid
    requirement.
        But the other one was more pragmatic and business-like, and
    that was a recognition that in certain skill sets it is, in
    fact, more cost-effective to put those into the Reserve. We in
    the Army Reserve are quite proud of our record in such areas as
    medical support, civil affairs. The issue that we have on the
    table is that we are structured wrong. We do not have
    sufficient depth in those capabilities. General Schultz in the
    last panel spoke to the issue of military police. The reason we
    have high-demand, low-density units is that we made a conscious
    decision to make them at a density level which now proves too
    low.
        We are involved and have put forth to the Army leadership
    what some would call a radical, I would call it a measured,
    practical, but still very strong transformation plan which
    proposes to reduce our structure in some cases, units that we
    have had little requirement for, and in turn to stand up
    additional civil affairs capability, medical capability,
    transportation, military police, a couple of other specialties
    that are in the high demand area that we believe we can
    maintain equally effective and at reduced cost within the Army
    Reserve as opposed to transforming to the Active Component.
        We did have in the past year about 6,000 spaces, 6,000
    soldier positions, authorizations in the active component that
    increased in the combat support, service support area. In turn,
    we in the Army Reserve adjusted slightly by picking up in those
    high demand areas about 13,000 more authorizations. It's our
    proposal to go much deeper over the next 3 to 5 years.
        Senator Cochran. Thank you very much. Thank you, Mr.
    Chairman.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Stevens. We thank you all, gentlemen, and you've
    got sort of think tanks. I'd urge you to just think about
    retention incentives and give us some ideas. We're perfectly
    willing to give you some authority to have pilot projects to
    try to initiate some changes and test them outright during this
    period. This would be a good test period on a lot of ideas that
    might lead us to further retention.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

           Questions Submitted to Lieutenant General James R. Helmly
                  Questions Submitted by Senator Thad Cochran

                          ARMY RESERVE TRANSFORMATION

        Question. General Helmly, in the fall of 2000, the Chief of Staff
    of the Army announced a far reaching initiative to transform the Army's
    combat units and the systems the Army would field to support those
    units. Could you comment on the progress the Army Reserve has made in
    transforming itself over the past three years?
        Answer. Sir, the Army Reserve is transforming as the Army
    transforms and we will play a crucial role as the Army fields the
    Objective Force. Transformation is not new to the Army Reserve. We have
    essentially transformed ourselves since the end of the Cold War, when
    we reduced and restructured our force to a smaller, more efficient
    infrastructure with a greater focus on our core competencies of combat
    support and combat service support. We have continually improved on
    this force structure to enhance accessibility to our invaluable
    capabilities for the Army to achieve a seamless integration of the Army
    Reserve with the active component. The Army Reserve is pursuing six
    imperatives to accomplish transformation. First, we are re-engineering
    the mobilization process to remove impediments between the time
    competent legal authority authorizes mobilization and the time soldiers
    arrive at the place they are needed. Second, we will transform Army
    Reserve command and control to focus on soldier readiness, unit
    readiness, and shortened mobilization timelines. Third, we are
    resourcing a smaller more focused, high demand, and capable force
    manned and organized at Level One of Authorized Level of Organization.
    A resourced Trainee, Transient, Holdee, and Student account will be a
    critical enabler to reach this transformational end state. Fourth, we
    will implement Human Resources Life Cycle Management of Army Reserve
    soldiers that ensures ``once a soldier, always a soldier'' is a
    statement of fact, not a desire. Fifth, we are building a rotational
    base in our force that will facilitate Army Reserve engagement in a
    wide variety of Army operations. This provides our units with
    operational experience, and provides operational tempo relief for the
    active Army. It also imparts a sense of predictability for our soldiers
    and evens out the work load across the force. Finally, we are re-
    engineering the individual capability that the Army Reserve provides to
    the Army, built to meet real-world combatant commander requirements as
    validated in the World-Wide Individual Augmentation System.
        Question. Of those initiatives, which do you feel are most
    important to maintaining the momentum for change?
        Answer. Sustaining the momentum for change is a very important
    element of our effort to transform the Army Reserve. The Objective
    Force of the Army will bring greater capabilities for the nation in its
    mission to fight and win our nation's wars. Our six imperatives of Army
    Reserve Transformation will ensure the Army Reserve remains capable of
    supporting the Objective Force when it is fielded. As such, these
    imperatives are functionally interrelated and mutually supporting. Any
    one imperative may generate some positive effect; however, all
    imperatives will be necessary for Army Reserve Transformation to be
    able to produce ready soldiers, ready units, shortened deployment
    timelines, and reduced costs. As I have said, this is a complete
    package. While certain aspects of it, such as Human Resources Life-
    Cycle Management and maintenance of a Trainee, Transient, Holdee, and
    Student account are new functions that will require resources to
    perform, significant savings will be generated in other areas. These
    include force structure adjustments that will balance the force for
    future operational requirements and reduce base operations and
    equipment costs. A smaller, more focused peacetime command and control
    structure will generate efficiencies. Finally, Army Reserve
    Transformation will produce a ready force organized at Level One of
    Authorized Level of Organization. This force will be readily deployable
    without extensive cross leveling, post mobilization training,
    validation, or equipment purchases, prior to deployment.

                     RECONSTITUTION OF ARMY RESERVE FORCES

        Question. General Helmly, today, we have a large number of forces
    forward deployed while we simultaneously pursue elements of terror at
    home and globally. Do you believe we will be able to reconstitute our
    Army Reserve forces in an orderly manner for a sustained war against
    terror while meeting our many other commitments around the globe?
        Answer. Reconstitution is an ongoing activity. Recently the
    reconstitution of Army Reserve forces has become increasingly difficult
    due to the continued growth of our enduring commitments. Some of our
    mobilized units have been re-missioned to ensure that those commitments
    can be met. As units demobilize, commanders are tasked with keeping
    their soldiers trained and prepared for future missions while
    sustaining high morale and retention. The existence of high demand/low
    density requirements exclusive to our war against terror, countered by
    portions of our force that are rarely used, confirms that we need to be
    able to build the right force to accomplish our changing mission. One
    of our Transformation Imperatives is to build a Rotational Force within
    the Army Reserve, which will add depth to those capabilities which are
    subjected to heavy use.

                   ARMY RESERVE'S ROLE IN REBUILDING OF IRAQ

        Question. As our troops take on the responsibility for shoring up
    security and starting the rebuilding process in Iraq, what do you see
    as the Army Reserve's role within that mission?
        Answer. The Army Reserve will have a major role in the rebuilding
    of Iraq. We have the right mix of Combat Support/Combat Service Support
    units that would allow us for example to be tapped for construction,
    fresh water, and medical support. The Army Reserve has the capability
    to provide significant amounts and types of forces required in nation
    building efforts. The critical operational capabilities that reside at
    a 75 percent level or more in the Army Reserve include Civil Affairs at
    97 percent, Public Affairs at 82 percent, Personnel Services at 87
    percent, Supply Operations at 76 percent, Psychological Operations at
    83 percent, and Chemical at 75 percent.

                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison

           TRANSFORMATION PROGRAMS IN FISCAL YEAR 2004 BUDGET REQUEST

        Question. What are your key Transformation programs in the 2004
    budget request?
        Answer. The Army Reserve has no key Transformation programs
    identified in the fiscal year 2004 budget request. The Federal Reserve
    Restructuring Initiative (FRRI), which is a key structure decision that
    supports the Army Reserve Transformation and includes the reduction of
    theater support requirements, incorporation of a Trainee, Transient,
    Holdee and Student account, and redesign of Army Reserve Command and
    Control, was accepted as an Army Transformation initiative and endorsed
    by senior Army leadership. The initial start up costs in fiscal year
    2004 for FRRI actions can be accomplished within our requested
    Operations and Maintenance funding. Building rotational depth in our
    force that facilitates Army Reserve engagement in a wide variety of
    Army operations is critical to Army Reserve force development. This
    operational depth provides our units with operational experience,
    OPTEMPO relief for the active Army, imparts a sense of predictability
    for our soldiers, and evens out the workload across the force. The Army
    Reserve experience in current operations has validated the FRRI
    imperatives of re-engineering the mobilization process and demonstrated
    the need for structural and individual adjustments that we knew had to
    be made. The Army is not a static organization. All components are
    interconnected; therefore, any change to one component impacts the
    entire Service.

                MOBILIZATION OF FISCAL YEAR 2004 BUDGET REQUEST

        Question. How has mobilization for Operation Iraqi Freedom
    influenced next year's budget request?
        Answer. Since the length of the current mobilization is not known,
    the impact on the fiscal year 2004 budget request cannot be determined
    at this time. Although lengthy mobilizations can create under execution
    in the personnel appropriations, any perceived savings often fail to
    materialize in a period in which the Army is both mobilizing and de-
    mobilizing Army Reserve soldiers. Additional requirements may be driven
    by de-mobilization and the re-constitution of equipment and by
    additional pre-mobilization training requirements. Depending on the
    speed of de-mobilization and the status of equipment that needs to be
    re-constituted, the Army Reserve may require additional transfer
    authority between appropriations or additional funding in fiscal year
    2004.

                 LESSONS LEARNED FROM MOST RECENT MOBILIZATION

        Question. What lessons have you learned from the most recent
    mobilization and how can you improve the process for next time?
        Answer. Lessons learned from our most recent mobilization are being
    addressed internally and are being incorporated in the transformation
    of the Army Reserve. The mobilization process needs to be reengineered.
    We must adopt new doctrine and legislation to streamline and automate
    the mobilization process, which is currently time-intensive, paper-
    based, and multi-layered. We need to improve the mobilization process
    to enable flexible, rapid response when necessary, while protecting the
    rights and lives of Reserve soldiers. Our current force structure must
    be redesigned to meet a global asymmetrical threat versus any defined
    adversary. There must be rigor in our decision making process to ensure
    that support assets required for large mobilizations are established
    prior to units flowing into the Area of Responsibility.

                            TRICARE HEALTH COVERAGE

        Question. What are your thoughts on extending TRICARE health
    coverage to members and families of the Reserve on a cost-share basis?
        Answer. For those who are self-employed or lack adequate civilian-
    employer provided medical insurance, the availability of such coverage
    would be a welcome benefit. The immediate benefit would be offset
    somewhat, however, by the actual cost to the member--those who
    typically lack medical insurance are also least likely to be able to
    afford premium payments--and by the relative inaccessibility of the
    Military Health System to Reserve Component members. For example, only
    20.5 percent of the Reserve soldiers live within an Army catchment
    area. The vast majority would not reap the full benefit of the TRICARE
    program unless it was tied to liberal access to TRICARE Remote and
    TRICARE Prime Remote. Still, limited health insurance is better than
    none, and I would be inclined to support this effort.
        Question. Would this provide a needed service to our Reservists?
        Answer. A recent survey by the Office of the Assistant Secretary of
    Defense Reserve Affairs and the Defense Manpower Data Center showed
    that 86 percent of Reserve soldiers with dependents have health
    insurance coverage of some sort. The greatest benefit would be afforded
    to the remaining 14 percent who lack medical insurance coverage.
        Question. Would employers view it as an incentive to hire
    Reservists?
        Answer. Employers are required to offer the same level of
    healthcare insurance coverage to all employees. TRICARE health coverage
    would most likely be viewed in neutral terms by civilian employers.

                       SUPPORTING EMPLOYERS OF RESERVISTS

        Question. How can you recommend we better support the employers of
    our Reservists?
        Answer. The Army Reserve strongly supports initiatives to reach the
    employers of the over 76,000 Army Reserve personnel mobilized for
    Operations Enduring Freedom and Iraqi Freedom. Retaining the support of
    employers is essential to the retention of quality personnel within our
    force. This is even more essential given that our force is largely
    built upon the civilian skills that many of our Reserve soldier bring
    to their respective military positions. We are working with the
    Department of the Army personnel chain to develop an effective means to
    centrally collect employer information of our soldier. The Army Reserve
    will continue to support initiatives to recognize employers of
    mobilized personnel at both home station and as part of a greater
    strategic effort aimed at retaining employer support for the Army. In
    April 2003, we implemented the Army Reserve Employer Recognition
    Program initiating actions to ensure every employer of a mobilized
    Reserve soldier is recognized by the first General Officer in the chain
    of command.

                              EQUIPMENT SHORTFALLS

        Question. The Army Reserve has performed world-wide missions in
    support of the War on Terrorism since September 12, 2001. I am
    interested in knowing more about the equipment readiness of the Army
    Reserve and how the deployments might impact that readiness.
    Specifically, please tell me: What significant equipment shortfalls
    exist in the Army Reserve?
        Answer. Sir, prior to the start of mobilization for Operation Iraqi
    Freedom (OIF), the U.S. Army Reserve had reached a level of fill for
    equipment considered essential to effective performance of a unit's
    mission with the appropriate authorized substitutions. Without
    substitutes, the percentage of items on-hand would have dropped below
    70 percent of the required equipment on hand to perform the mission.
    Although authorized for substitutions, this equipment is very
    maintenance intensive and expensive to sustain and in many cases
    provides less capability than the required system. For example, the
    Army Reserve is utilizing older 1960's technology 2.5 and 5 Ton trucks
    as authorized substitutes for the more modern Family of Medium Tactical
    Vehicles and the Combat Utility Commercial Vehicle instead of the High
    Mobility Multi-purpose Wheeled Vehicle. The significant equipment
    shortages that exist in the Army Reserve today include materiel
    handling equipment; petroleum, oil, and lubrication and water systems
    such as the 5,000 gal fuel tankers; fuel system supply points; and
    forward area water points. Additionally, we are short line-haul prime
    movers and tactical trailers, heavy High Mobility Multi-purpose Wheeled
    Vehicles, high frequency radios, and night vision goggles. Although
    short the above requirements, the Army Reserve was able to meet the
    mission through extensive cross-leveling of equipment from non-
    deploying units to those deploying units in support of OIF.
        Question. How do these shortfalls impact the Army Reserve's mission
    in support of the war on terrorism?
        Answer. Sir, the end result was that the Army Reserve was forced to
    redistribute assets internally throughout the force to meet the
    requirement, both prior to and during the mobilization of units. The
    original minor shortfalls were exacerbated by the increased readiness
    targets for unit deployments and the additional equipment requirements
    beyond normal authorizations. The change in mobilization requirements
    resulted in the Army Reserve units that were not immediately mobilized
    being depleted of their equipment to support the additional requirement
    to fill units to 100 percent of their authorizations. As such, there
    would be a significant challenge for the Army Reserve to provide
    operational units for any additional contingency operations beyond OIF.
        Question. What are the potential future impacts of these equipment
    shortfalls?
        Answer. Sir, as the Army transforms, so will the Army Reserve. Part
    of our transformation objective is to assure unit readiness and
    relevance, add operational depth to the Army, successfully meet
    continuous contingency operations, relieve Army operational tempo, and
    transform the Army Reserve to the Objective Force. As the Army Reserve
    transforms and eliminates non-relevant structure, we will redistribute
    equipment internally to offset current shortfalls, thus improving
    equipment on-hand shortages. While the proposed force restructuring
    initiatives will reduce the Army Reserves' equipment shortages, future
    contingency missions will continue to be successfully met by retaining
    and maintaining, for some percentage of the fleet, less modern and
    capable equipment, at increasing operations and sustainment costs.

                                     ______

               Questions Submitted by Senator Ernest F. Hollings

               MODERNIZATION AND SUSTAINMENT CRITICAL SHORTFALLS

        Question. General Helmly, the Army Reserve has been utilized
    continually since 1991. The Army Reserve's operational tempo in support
    of the War against Terrorism, both at home and globally, has kept a
    large portion of the Army Reserve mobilized since September 11, 2001.
    It appears we are asking the Army Reserve to do more and more. I'm
    concerned whether we are providing these units and soldiers with the
    resources to accomplish the missions our nation is asking them to
    perform. For the record, could you please--state the Army Reserve's
    modernization and sustainment critical shortfalls and explain the near
    term and long term consequences of not funding these shortfalls.
        Answer. Sir, the Army Reserve has maintained a high operational
    tempo because we are a fully engaged, ready, relevant, and reliable
    force supporting the nation and the Army's global war on terrorism.
    Since recent world events indicate that the Army will continue to be
    engaged in and support a wide variety of contingency operations,
    equipment modernization and sustainment efforts must be a high priority
    in order to continue to successfully meet the full spectrum of
    operations. The Army Reserve must be modernized to keep pace with the
    requirements of Army transformation. Some examples of modernization
    shortfalls include our combat wheeled vehicle fleet of 2.5 and 5 ton
    vehicles and High Mobility Multi-purpose Wheeled Vehicles (HMMWVs).
    Additionally, we are short materiel handling equipment; petroleum, oil,
    and lubrication and water systems; line-haul prime movers; night vision
    goggles; communication equipment; and the heavy HMMWVs for our
    frequently deployed Military Police units.
        The near term consequences are the reliance on limited overhaul and
    rebuild programs to sustain older less modern equipment. Additionally,
    extensive internal cross-leveling is necessary to fill shortages to 100
    percent of the requirement for mobilizing and deploying Army Reserve
    forces. The extensive cross-leveling of equipment from mobilizing to
    non-mobilizing units poses unique challenges to equipment on hand
    readiness levels.
        The long term consequences are increased maintenance and
    operational costs as equipment exceeds its economical useful life and
    eventually some degree of incompatibility with the Active Army forces.
    This incompatibility is a result of the Army Reserve having older less
    modern equipment that creates a host of maintenance and compatibility
    challenges to include Army training programs for mechanics and
    operators, the establishment of separate repair parts inventories, and
    special tools and test equipment unique to each equipment model.

                                     ______

              Questions Submitted to Vice Admiral John B. Totushek
               Questions Submitted by Senator Christopher S. Bond

                         REDESIGN OF THE NAVAL RESERVE

        Question. We understand Navy is involved in an initiative to
    redesign the Naval Reserve. What changes do you anticipate will be made
    to force structure, missions and roles, and end strength?
        Answer. The Navy continuously reviews how to achieve greater
    capability from its budget, and redesign of the Naval Reserve is the
    subject of much review as part of this process. The final outcome of
    these studies is yet to be determined so identification of future force
    structure changes, other than those cuts proposed in the President's
    fiscal year 2004 budget, would be pre-decisional. The Naval Reserve
    provides a low-cost means to preserve capability and recapture training
    and knowledge investments. My expectation is that Navy will continue to
    leverage these investments as we identify ways to maximize the Naval
    Reserve's contribution to the country's future war-fighting force.

                     RECAPITALIZATION OF THE NAVAL RESERVE

        Question. What is your plan to recapitalize your Naval Reserve
    force with reduced NG&REA funding levels?
        Answer. The $10 million of NG&REA appropriated during each of the
    past two fiscal years was used to fund critically needed equipment and
    upgrades. During this same period there was limited funding provided in
    Navy's APN and OPN accounts to upgrade Naval Reserve aircraft and
    surface craft to fleet equivalent mission capabilities. The President's
    Budget for fiscal year 2004 reflects an upturn in new equipment funding
    using APN (C-40 Logistics Aircraft, F-5 replacements, MH-60s and C130T
    Avionics Modernization Program), but there remains a sizeable
    requirement to upgrade or replace aging Naval Reserve equipment. Until
    sufficient funds are identified in the Navy's procurement
    appropriations, Naval Reserve equipment will continue to be replaced by
    equipment transferred from the active force.
        Question. What equipment investments has Navy made into the Naval
    Reserve in the fiscal year 2004 budget request?
        Answer. The fiscal year 2004 budget request contains the following
    equipment investments for the Naval Reserve:
      --Procurement of one C-40A aircraft to replace aging Naval Reserve
            DC-9 aircraft. ($64 million)
      --Funding commences on an Avionics Modernization Program (AMP) to
            upgrade 18 Naval Reserve C-130T aircraft. The total AMP
            requirement is $122 million. This is the initial funding for
            these upgrades currently scheduled to be complete in fiscal
            year 2013. ($3.3 million)
      --Funding to upgrade Naval Reserve cargo aircraft (C-9B, DC-9, UC-
            12B, C-37A, C-40A) to meet CNS/ATM mandated requirements. This
            is a multiyear program with fiscal year 2004 being the initial
            funding received to perform the upgrades. ($4.3 million)
      --Procurement of 32 Swiss F-5 aircraft to replace 32 Naval Reserve
            and Marine Corps Reserve F-5E aircraft. ($4.7 million)
      --Funding to procure small boats, table of allowance equipment and
            upgrade Mobile Inshore Undersea Warfare surveillance equipment.
            ($45.6 million)
      --Funding to procure table of allowance construction and
            communication equipment for reserve Naval Construction Force
            units. ($10.5 million)
        Question. What are the top five Naval Reserve equipment unfunded
    items for fiscal year 2004?
        Answer. Our top five unfunded items for fiscal year 2004 are:
      --Procurement of two additional C-40A aircraft to replace aging DC-9
            aircraft. ($131.0 million)
      --Funding to upgrade two Littoral Surveillance Systems. ($19.2
            million)
      --Procurement of remaining equipment to fill out 10,000 CBR-D sets
            including storage and phased replacement. ($8.0 million)
      --Procurement of two P-3C AIP kits in order to achieve commonality/
            compatibility with Active P-3C UD III Squadrons. ($28.8
            million)
      --Upgrade third (of three) Naval Reserve VFA squadrons (F/A-18A) with
            precision-guided munitions capability and procure Advanced
            Targeting Forward Looking Infrared Radar for three Naval
            Reserve VFA squadrons. ($52.8 million)

                       LITTORAL SURVEILLANCE SYSTEM (LSS)

        Question. The Navy's Littoral Surveillance System (LSS) and Navy
    Patrol Craft are critical assets we need in Homeland Security. Have you
    considered assigning these assets a Homeland Security mission? If not,
    why not?
        Answer. The Naval Reserve is currently investigating a potential
    role for the Littoral Surveillance System (LSS) in Homeland Security.
    Plans are being discussed for LSS participation in two Naval Reserve/
    Coast Guard Joint Harbor Operations Centers. The Naval Reserve's two
    LSS systems, being developed and funded from 1999 through 2003, may be
    used to further expand this systems capability in the Homeland Security
    mission.
        The Navy will transfer five Patrol Craft (PC) to the Coast Guard in
    fiscal year 2004. The Coast Guard has been using PC's for Homeland
    Security missions since the September 11th attacks and will continue to
    do so. Plans for the remaining eight PC's are undecided at this time.

                          NAVAL RESERVE EQUIPMENT LIST

        Question. We understand Navy is considering drastically altering
    the equipment list for Naval Reserve units. If this is true, how
    extensive are the cuts and what will the impact be on readiness and the
    Navy's ability to access its Reserve force?
        Answer. The Navy continuously seeks to balance resources and
    requirements in order to maximize war-fighting wholeness within
    realistic fiscal restraints. Options to expand integration of Active
    and Reserve forces are under review; however, identification of
    potential force structure changes, beyond those proposed in the
    President's fiscal year 2004 budget, if any, would be pre-decisional.
        PB04 makes a significant effort to maximize DON total force
    warfighting wholeness. The Secretary of Defense identified TacAir
    Integration as the model transformational program. Leveraging the
    synergy of a better integrated Navy and Marine Corps Aviation team
    provides a readier, more surge-capable, and affordable force.
    Additionally, the PB04 decommissioning of selected E-2 and P-3 reserve
    squadrons will provide resources necessary for transformation,
    integration, and recapitalization. The SecDef Counter Drug (CD) Execute
    Order has reduced the annual requirements for deployed E-2 coverage.
    The resultant reduction in force structure meets this new E-2 CD
    commitment. For P-3s, PB04 transitions two Reserve squadrons to
    augmentation units. Three additional Reserve P-3 squadrons will
    transition within the FYDP. This migration of reserve units to
    augmentation units allows for tighter integration between reserve and
    active forces, facilitates enhanced interoperability, and keeps
    reservists in the most modern weapons systems.

                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison

                              RESERVE HEALTH CARE

        Question. What are your key Transformation programs in the 2004
    budget?
        Answer. The Naval Reserve's overall role in the Transformation of
    the Department of Defense focuses on the continuing process of
    integrating the Naval Reserve with the Active Component. Several
    ongoing studies are addressing the changing role of the Naval Reserve
    in a transforming Navy and Department of Defense.
        Internally, the Naval Reserve is defining its appropriate role in
    Homeland Security (HLS), and is actively engaged with Northern Command
    in the identification of potential requirements. The fielding of the
    Littoral Surveillance System, for example, will help meet today's
    threat, contribute to the NORTHCOM mission, and efficiently utilize
    unique Naval Reserve capabilities. Although these transformational
    initiatives have not yet progressed to the point of resulting in
    programmatic changes in the fiscal year 2004 budget, it is anticipated
    that future budget submissions will reflect increased emphasis on the
    Littoral Surveillance System and HLS in general, as well as supporting
    the continued integration of the Naval Reserve with the Active
    Component.

                    IMPACT OF MOBILIZATION ON BUDGET REQUEST

        Question. How has mobilization for Operation Iraqi Freedom
    influenced next year's budget request?
        Answer. The current goal is to reduce Navy Reserve personnel
    mobilized from nearly 12,000 to 3,000 (3.4 percent) by the end of
    fiscal year 2003. The fiscal year 2004 mobilization end state is
    projected to be zero. In the fiscal year 2004 budget the Reserve
    participation rates have been adjusted slightly to compensate for
    remaining ``demobilization'' from 3,000 to 0, and is therefore
    considered to have no budgetary impact.
        In fiscal year 2004, the O&MNR appropriation is currently priced
    for peacetime operations. Any increase in operating tempo due to
    further conflict would have to be addressed with supplemental funding.
        From an aviation depot maintenance point of view, it has yet to be
    determined if any reconstitution costs resulting from increased
    operating tempo in OIF are required. The aviation depot maintenance
    budget is currently priced for peacetime operations. Any necessary
    reconstitution of airframes or engines work would require supplemental
    funding.

                      RESERVE MOBILIZATION LESSONS LEARNED

        Question. What lessons have you learned from the most recent
    mobilization and how can you improve the process for next time?
        Answer. The Navy is continuously reviewing the processes and
    progress of our mobilization efforts since September 2001,
    incorporating several improvements along the way. The Navy headquarters
    staff was inadequately organized to properly prioritize mobilization
    requirements and orchestrate the mobilization process. Within days, the
    Navy created the OPNAV Mobilization Cell to serve as a single
    submission point for all Navy mobilization requests. The Mobilization
    Cell is now the single-point of contact for all Navy decisions on
    mobilization and demobilization sourcing priorities.
        Additionally, Navy learned early on that it needed a single, web-
    based ADP program for tracking and processing mobilization
    requirements. Within a remarkably quick two-month period, a modified
    version of the pre-existing Marine Corps Mobilization Processing System
    (MCMPS) was fielded as the Navy MCMPS (NMCMPS). NMCMPS provides a web-
    based medium, accessible worldwide, that allows Naval Reserve
    Activities and Navy Mobilization Processing Sites to update the status
    of mobilizing Reservists. It also provides gaining Commands and Navy
    leadership the ability to track the Reservist's status. NMCMPS also
    consolidates all Navy mobilization order writing at Navy Personnel
    Command, a task previously executed by over 140 individual Naval
    Reserve Activities. This consolidation of mobilization (and
    demobilization) orders writing has eliminated all of the administrative
    errors experienced when orders were written by individual Commands.
    There is a third part to NMCMPS that is not yet operational. Navy is
    working to field a secure, classified part of NMCMPS for the submission
    and review of mobilization requirements. When this is complete,
    Combatant and Service Component Commanders will be able to view the
    status of their Navy requirements from generation and submission,
    through the Navy Headquarters review process, to the selection and in-
    processing of Reservists, all the way to their actual arrival at
    gaining Commands via an automated real-time web-based application. Navy
    is working to incorporate the full functionality of NMCMPS in the
    Defense Integrated Military Human Resources System (DIMHRS).
        Just as the OPNAV Mobilization Cell provides a single point of
    contact Commands to submit and staff Navy mobilization requirements,
    Navy realizes the immense importance of having a single organization to
    serve as an advocate for our mobilized Reservists. In April of 2002,
    the Navy created the Noble Eagle Sailor Advocacy (NESA) Office at the
    Navy Personnel Command to aid in ensuring a positive mobilization
    experience for our mobilized Reservists. In particular, a foremost
    tenet of the NESA team is to pay special attention to those Reservists
    who are experiencing genuine hardships as a result of early
    demobilization, or other problems, and forwarding those issues up the
    chain of command for individual mitigation. Since its creation, NESA
    has evolved into a program that not only helps mobilized Reservists
    with hardship issues, but also closely emulates many detailing
    functions found within the active duty Navy and its Project SAIL
    (Sailor Advocacy through Interactive Leadership) program, including
    contacting every mobilized Reservist prior to the end of their orders
    to discuss their desires and ensure they understand the options
    available to them.
        Many of the same concerns that led to the creation of NESA reaffirm
    the importance of continuous, open, and clear communication with our
    Reservists. Throughout the current mobilization, we have maintained
    communication through such means as messages and public affairs
    publications, town hall meetings, and leadership visits with our
    mobilized forces.
        As we demobilize over 12,000 Naval Reservists currently serving in
    support of Operations Iraqi Freedom, Enduring Freedom, and Noble Eagle,
    Navy is focusing on performing formal assessments of the conduct of
    Operation Iraqi Freedom, including the mobilization process. We will
    undoubtedly find many more ways to improve our mobilization process
    during these assessments, and look forward to sharing those with the
    Congress once the assessments are completed.

                              RESERVE HEALTH CARE

        Question. What are your thoughts on extending TRICARE health care
    coverage to members and families of the Reserve on a cost-share basis?
        Answer. Approximately 80 percent of Reservists have health
    insurance coverage when not on active duty as reported in the GAO
    Report, GAO-02-829, ``Defense Health Care: Most Reservists Have
    Civilian Health Coverage But More Assistance Needed When TRICARE is
    Used'', dated September 6, 2002. This coverage is through employer-
    sponsored programs or spouse's employer health plans. This report found
    of that 80 percent, 90 percent maintained their civilian coverage when
    deployed. The GAO report (GAO-03-549T), ``Military Personnel:
    Preliminary Observations Related to Income, Benefits, and Employer
    Support for Reservists During Mobilizations'' reiterates that most
    reservists maintain their own healthcare coverage when mobilized.
        In addition, 70 percent of Reservists and their families live
    outside of Military Treatment Facility catchment areas and cannot take
    advantage of the assistance and array of services found near military
    treatment facilities (MTFs). These families must rely on the limited
    TRICARE network of providers for support.
        The GAO report also estimates that any TRICARE healthcare program
    providing continuous TRICARE coverage for reservists and their
    dependents during the entire enlistment period--regardless of
    reservists' mobilization status--with benefits similar to those for
    active duty will cost DOD about $10.4 billion. This estimate assumes
    that the current number of DOD MTFs remains constant in services and
    providers, which is unlikely based on BRAC and manpower adjustments.
    This cost would escalate with the increased number of active duty and
    reserve members in need of care through the TRICARE network.
        Question. Would this provide a needed service to our Reservists?
        Answer. No. It would only serve an extremely small percentage of
    Reservists. The precedence for opposition to this proposal lies with
    the TRICARE Dental Program (TDP). Selected Reservists and/or their
    family members can participate in the TDP. As of May 2003, only 7.8
    percent of Naval Reservists are enrolled in the TDP plan.
        Question. Would employers view it as an incentive to hire
    Reservists?
        Answer. This question would be best answered by the National
    Committee for Employer Support of the Guard and Reserve (NESGR), but
    the impact of employees with other health insurance may be dependent
    upon their company's benefits. It may negatively impact small business
    owners by reducing the number of eligible employees for a plan size and
    increasing plan costs. Larger corporations might not be similarly
    impacted.

                            RESERVE EMPLOYER SUPPORT

        Question. How can you recommend we better support the employers of
    our Reservists?
        Answer. The best support to the employers of our Reservists is to
    ensure we have an active Employer Support of the Guard and Reserve
    (ESGR) organization. We must continue supporting ESGR's efforts to
    educate employers on their rights and responsibilities, as well as
    those of the employed Reservists. Navy believes Congress provides
    sufficient authority in Title 10 to enable the Services to obtain the
    employer data the ESGR needs to provide improved support to employers
    through their Civilian Employment Information (CEI) Program.
        Additionally, Navy is implementing lessons learned in the
    mobilization and demobilization of our Naval Reservists. This allows
    the Reservists more time to prepare for a ``career transition,'' and
    provides earlier notification to their employers. DOD policy is to
    notify Reservists whenever possible at least 30 days prior to their
    mobilization. While we cannot always provide this much advance
    notification due to operational concerns, it is essential that every
    effort be made to meet or exceed DOD's policy.

                               RESERVE EQUIPMENT

        Question. The Navy Reserve has performed worldwide missions in
    support of the War on Terrorism since September 12, 2001. I am
    interested in knowing more about the equipment readiness of the Navy
    Reserve and how the deployments might impact that readiness.
    Specifically, please tell me:
        What significant equipment shortfalls exist in the Navy Reserve?
        Answer. The Naval Reserve is short the following equipment:
        Airlift, C-40A Transport Aircraft, Qty short--8, Unit Cost $65
    million. This aircraft replaces aging C-9 aircraft.
        Individual Protective Equipment, Qty short--30,000, Unit Cost
    $1,000.
        P-3C Aircraft-BMUP Kits to achieve commonality with Active P-3C UD
    III Aircraft, Qty short--13, Unit Cost $9 million.
        P-3C Aircraft-AIP Kits to improve ASW capability, enhance weapons
    suite, improve target sensing, and achieve commonality with Active P-3
    Aircraft; Qty short--12; Unit Cost $14.4 million.
        Naval Coastal Warfare Table of Allowance equipment and small boats
    for a total cost of $45 million.
        F/A-18 Aircraft Modification (ECP 560) to provide precision
    munitions capability, Qty short--12, Unit Cost $3.5 million.
        F/A-18 Aircraft Modification (Advanced Targeting Forward Looking
    Infrared Kits) to provide precision guided munitions capability, Qty
    short--16, Unit Cost $2.5 million.
        F-5 Aircraft Radar Upgrade to better simulate enemy aircraft. Qty
    short--36, Unit Cost $360,000.
        P-3C Counter Drug Upgrades to provide day and night electro-optic
    capability, Qty short--13, Unit Cost $1.5 million.
        SH-60B Helicopter Forward Looking Infrared Kits to improve
    surveillance capability, Qty short--5, Unit Cost $1.4 million.
        Question. How do these shortfalls impact the Navy Reserve's mission
    in support of the war on terrorism?
        Answer. The Naval Reserve supports the overall mission of the Navy,
    which is, ``Be prepared to conduct prompt and sustained combat
    operations at sea in support of U.S. national interests'', which
    naturally includes any missions in the Global War on Terrorism.
        The following equipment enhancements could all be, at some time,
    used by the Naval Reserve to support Navy Global War on Terrorism
    missions;
        Airlift, C-40A Transport Aircraft, Qty short--8, Unit Cost $65
    million. This aircraft replaces aging C-9 aircraft.
        Individual Protective Equipment, Qty short--30,000, Unit Cost
    $1,000.
        P-3C Aircraft-BMUP Kits to achieve commonality with Active P-3C UD
    III Aircraft, Qty short--13, Unit Cost $9 million.
        P-3C Aircraft-AIP Kits to improve ASW capability, enhance weapons
    suite, improve target sensing, and achieve commonality with Active P-3
    Aircraft; Qty short--12; Unit Cost $14.4 million.
        Naval Coastal Warfare Table of Allowance equipment and small boats
    for a total cost of $45 million.
        F/A-18 Aircraft Modification (ECP 560) to provide precision
    munitions capability, Qty short--12, Unit Cost $3.5 million.
        F/A-18 Aircraft Modification (Advanced Targeting Forward Looking
    Infrared Kits) to provide precision guided munitions capability, Qty
    short--16, Unit Cost $2.5 million.
        F-5 Aircraft Radar Upgrade to better simulate enemy aircraft. Qty
    short--36, Unit Cost $360,000.
        SH-60B Helicopter Forward Looking Infrared Kits to improve
    surveillance capability, Qty short--5, Unit Cost $1.4 million.
        Question. What are the potential future impacts of these equipment
    shortfalls?
        Answer. Naval strategy identifies the need for the integration of
    the Active and Reserve components into a seamless and cohesive Total
    Force capable of meeting all operational requirements in peacetime and
    in war. These shortfalls impact the ability of the Reserves to maintain
    compatibility and relevance with the Active Navy's mission
    accomplishments.

                                     ______

          Questions Submitted to Lieutenant General Dennis M. McCarthy
              Questions Submitted by Senator Kay Bailey Hutchison

                                 TRANSFORMATION

        Question. What are your key transformation programs in the 2004
    budget request?
        Answer. The Marine Corps' transformation is broken down into
    several categories: technological, organizational, operational and
    acquisition policies and procedures. Currently, we are investing
    approximately $1.5 billion per year in transformational initiatives, to
    include our top ground and aviation investment programs--the
    Expeditionary Fighting Vehicle (formerly referred to as the Advanced
    Amphibious Assault Vehicle) and the MV-22.
        Within the above listed categories, three investment areas warrant
    mention as priority and material enablers to transformation. First, Sea
    Viking 2004 (SV04) represents the main experimentation effort designed
    to support decisions and strategies for 2015 transformational goals.
    SV04 will examine Seabasing and Operational Maneuver from the Sea
    (OMFTS) within a joint context and will provide the conceptual
    foundation for Naval transformation. Second, an On the Move Combat
    Operations Center (OTM COC) capability will feature Over the Horizon
    Communications (OTH Comm), an iridium-based voice and data tactical
    communication system, and Position Location Information (PLI)
    imperative for future combat operations. Third, initiation of a
    synergistic land counter-mine capability. This capability will provide
    both near term Marine Expeditionary Unit capability sets, as well as
    science and technology investment in the areas of advanced signature
    duplication, family of tailored explosives systems and light-weight
    mechanical breaching systems. Fourth, our fiscal year 2004 program will
    include the first dedicated funding for Joint High Speed Vessel (JHSV)
    experimentation. JHSV will have a pervasive transformational impact by
    providing exponential capability improvements in support of
    expeditionary maneuver warfare. Finally, in fiscal year 2004, Marine
    Corps Science & Technology resources will be used to validate the
    designs and concepts of the first three categories.
        Both our Active and Reserve forces will benefit from these
    transformation initiatives to confront future conflicts as we have in
    the past, as a Total Force. Our Selected Marine Corps Reserve units are
    structured and trained based on the Marine Air Ground Task Force model
    and are ready to augment the Active component with personnel and
    equipment whenever the need arises.

                      OPERATION IRAQI FREEDOM MOBILIZATION

        Question. How has mobilization for Operation Iraqi Freedom
    influenced next year's budget request?
        Answer. Next year's budget request was already submitted before
    mobilization of forces for Operation Iraqi Freedom. A request for
    funding of mobilization costs was submitted with the request for fiscal
    year 2003 Supplemental Funding. Most of the mobilization cost has been
    covered with funds received from the fiscal year 2003 Supplemental;
    however, because forces are still mobilized, requirements have not been
    fully assessed. It is premature to budget for such costs until they
    have been completely assessed. Our unfunded fiscal year 2004 costs will
    be addressed in a supplemental budget request in fiscal year 2004.

                                LESSONS LEARNED

        Question. What lessons have you learned from the most recent
    mobilization and how can you improve the process for the next time?
        Answer. The Marine Corps Reserve was able to successfully mobilize
    and provide trained war fighters to combatant commanders on a timeline
    that rivals that of active duty units. 24,221 Reserve Marines were
    activated and approximately 74 percent were forward deployed to the
    CENTCOM area of responsibility. Most mobilization plans proved sound
    and were properly executed by all levels of command.
        In addition to the joint lessons learned effort, the Commandant of
    the Marine Corps tasked the Enduring Freedom Combat Assessment Team
    Reserve (EFCAT-R) to perform a detailed study of the Reserve
    experience. The EFCAT-R team surveyed over 4,000 active and reserve
    component Marines to produce a valuable report. Commander of Marine
    Forces Reserve (MARFORRES) established a MARFORRES Mobilization
    Assessment Team (MMAT). Several key areas require early action.

    Security Clearances
        Many Reservists reported to the Gaining Force Command (GFC) without
    current security clearances. The primary cause was a shortage of field
    grade Officers with Top Secret (Special Compartmentalized Information)
    clearances throughout the Reserves and especially in the Individual
    Ready Reserve.
        A meaningful improvement will require both organizational changes
    and a significant increase in funding for background investigations.

    Program Nine Activation
        The Navy mobilization process for medical and chaplain personnel
    does not fully support Selected Marine Corps Reserve (SMCR) unit
    deployment. Navy personnel in support of SMCR units are mobilized
    separately from the Marine unit and take longer to reach the GFC. For
    Operation Enduring Freedom and Operation Iraqi Freedom, most SMCR units
    took 7-9 days from notification until they reported to the GFC. The
    typical Navy corpsman or chaplain required over 22 days from
    notification to arrival at the GFC.
        The solution is to ``integrate'' Navy personnel into SMCR units for
    mobilization purposes Navy and Marine personnel in each SMCR unit would
    mobilize together and travel jointly to the GFC. We are working
    cooperatively with Commander Naval Reserve Force and may make joint
    requests for support to implement this important initiative.

    Table of Equipment/Allowance
        To reduce the maintenance burden, reserve units have only a portion
    of their combat equipment at their Reserve Centers. Upon mobilization,
    the units expect to receive the additional needed equipment from a
    variety of sources including Logistics Command (LOGCOM), Remain Behind
    Equipment (RBE), and the GFC. Obtaining this additional equipment not
    only caused significant confusion but also only a portion of the
    additional equipment was obtained in a timely manner. Similar problems
    were experienced during Desert Shield/Desert Storm.
        To increase the efficiency of equipment sourcing, equipment
    reporting accuracy will be improved and Reserve-specific logistics
    planning will be incorporated into the deliberate planning process. A
    revised Force policy on internal redistribution of equipment by major
    subordinate commands will be published. Although this may increase our
    transportation of things costs, it will better position our equipment
    for future mobilizations. In order to ensure that sufficient amounts of
    communication and other ``high value-low density'' equipment are
    available upon mobilization, the Single Site Storage Facility (SSSF)
    program may be expanded.

    Personal Recovery/Mortuary Affairs
        The mission of a mortuary affairs unit is to respectfully recover,
    preserve, tentatively identify, and return all remains to the country
    of origin. Unlike the Army, a Marine mortuary affairs unit functions at
    the tactical level, occasionally performing its duties on the
    battlefield. In addition, this unit provides the necessary link between
    the Marine component and theater agencies responsible for evacuation of
    remains to CONUS. However, Marine Mortuary Affairs currently lack a
    doctrine consistent with its utilization in both Operation Iraqi
    Freedom and Desert Storm. As a result, units are inappropriately
    organized, trained, and equipped to support the Marine combatant
    commander in a joint environment.
        We plan a revision of the unit organization, manning, and the
    acquisition of additional equipment.

    Key Volunteer Program
        The information flow from deployed units to Marine families at home
    is greatly enhanced by an active and engaged Key Volunteer Network
    (KVN), an official Marine Corps program. Since the KVN program only has
    a small operating budget, it is very dependent on the enthusiasm of
    individual volunteers. As there are 187 separate Reserve centers
    throughout the United States, Marine Forces Reserve must fight the
    ``tyranny of distance'' as it tries to build a close-knit Key Volunteer
    organization. Information flows are further complicated upon
    activation. While a Reserve unit may smoothly join the GFC, it is
    difficult to merge the Reserve and Active Key Volunteer Networks. As a
    result, families of Reservists find it more difficult to obtain
    authoritative answers to questions and concerns.
        Making the successful ``MCCS One Source'' experiment (sponsored by
    Office of the Secretary of Defense) a permanent program will be
    recommended. We anticipate working with the National Guard and other
    Reserve components to develop a system of joint Family Service Centers
    nationwide.

    Accountability Protocol
        The active and reserve components of the Marine Corps maintain
    separate computer systems for tracking personnel. In order to bridge
    this difference, MARFORRES units were forced to improvise by creating
    locally generated computer spread sheets. Navy personnel were tracked
    using a third system.
        We will recommend continuing improvements to the current, Manpower
    Management systems.

                           TRICARE BENEFITS EXTENSION

        Question. What are your thoughts on extending TRICARE health care
    coverage to members and families of the Reserve on a cost-share basis?
    Would this provide a needed service to our Reservists? Would employers
    view it as an incentive to hire Reservists?
        Answer. I encourage the continued exploration of TRICARE health
    coverage alternatives for Reserve Marines, and studying the
    effectiveness implementation might have on both the reserve component
    and active component retention. My personal sense is that it would not
    be a disincentive for active duty retention. Providing such coverage is
    not duplicative to private insurance coverage as much as an
    alternative. The challenges associated with implementation--cost,
    administration of the program, (the mechanisms for enrollment, billing,
    premium payment, reimbursements, etc.) are considerable; however, this
    alternative would provide a vital service for our Reserve Marines and
    would be viewed as an employer incentive to hire Reserve Marines.

                      SUPPORT FOR EMPLOYERS OF RESERVISTS

        Question. How can you recommend that we better support the
    employers of our reservists?
        Answer. Thanks to the good work of the Employer Support to the
    Guard and Reserve (ESGR) and our concerted partnership with them in the
    time since Desert Shield/Desert Storm, we have made significant strides
    in better supporting our nation's employers when our Reserve Marines
    are called to active duty. But, there is work yet to do. We should: (1)
    provide employers with tax incentives for supporting Reserve Marines,
    (2) develop business insurance options for small business owners/
    employers and self-employed Marines, (3) subsidize companies that
    maintain health care coverage on the family members of activated
    Reserve Marines, and (4) continue to explore avenues through which
    TRICARE could contribute to medical insurance for Reserve Marines,
    including periods of activation and when not activated.

                          RESERVE EQUIPMENT SHORTFALLS

        Question. The Marine Corps Reserve has performed worldwide missions
    in support of the War on Terrorism since September 11th, 2001. I am
    interested in knowing more about the equipment readiness of the Marine
    Reserve and how the deployments might impact that readiness.
        What significant equipment shortfalls exist in the Marine Reserve?
        Answer. I am not aware of any significant legacy equipment
    shortfalls. However, the program manager for infantry weapons has
    projected significant new acquisition system shortfalls. Systems
    impacted are:
        1. AN-PVS-17 B & C.--The AN/PVS-17B night vision device provides
    2.25 system magnification and is designed to be used with the M16A2
    rifle. The AN/PVS-17C provides 4.5 system magnification and is designed
    to be used with the M249 Squad Automatic Weapon and M240G Medium
    Machine Gun. The systems are designed to provide high performance
    observation, quick man sized target acquisition, and aiming
    capabilities during night operations. Projected shortfalls: AN/PVS-17B.
    Qty: 1,037. AN/PVS-17C. Qty: 403.
        2. Thermal Weapon Sight (TWS) AN/PAS-13 (V3) Heavy Thermal Weapon
    Sights (HTWS).--The TWS is a high performance forward looking infrared
    (FLIR) device. The system is virtually unaffected by weather and
    obscurants. Primarily designed for target detection and engagement with
    Marine Corps crew serve weapons [M2 50 Cal Machine Gun & MK19 Grenade
    launcher], it can also be used for all weather surveillance. Projected
    shortfall: AN/PAS-13. Qty: 644.
        Question. How do these shortfalls impact the Marine Reserve's
    mission in support of the war on terrorism?
        Answer. Night capability of reserve units will lag active duty
    units without this equipment and this could affect mission
    effectiveness.
        Question. What are the potential impacts of these equipment
    shortfalls?
        Answer. Reserve units will be required to use alternative or less
    capable types of equipment to accomplish assigned missions and tasks.

                                     ______

        Questions Submitted to Lieutenant General James E. Sherrard III
              Questions Submitted by Senator Kay Bailey Hutchison

                            TRANSFORMATION PROGRAMS

        Question. What are your key Transformation programs in the 2004
    budget request?
        Answer. The Air Force Reserve Command's (AFRC) key Transformation
    programs in the 2004 budget request involve implementation of the Air
    Force's mobility modernization plan, tanker roadmap and plans to
    alleviate active duty Low Density/High Demand (LD/HD) issues. AFRC will
    retire its C-141 fleet located at Wright Patterson AFB, Ohio, Andrews
    AFB, Maryland, and March ARB, California--converting those units to C-
    5A, KC-135R and C-17A missions respectively. The 2004 budget request
    also funds conversion of one each C-5 Associate squadron located at
    Dover AFB, Delaware and Travis AFB, California to C-17 Associate units.
    The Portland IAP, Oregon conversion transfers eight HH-60 and five HC-
    130 aircraft to the active duty while standing up a KC-135R unit in its
    place. Additionally, AFRC will transfer two C-130H aircraft to the
    active duty--part of an overall transfer plan of 14 aircraft moving to
    Special Operations Command (SOCOM) to alleviate LD/HD issues. AFRC will
    divest itself of aging KC-135Es at Selfridge Air National Guard Base
    (ANGB), Michigan and Beale AFB, California in exchange for less costly,
    and more reliable KC-135Rs. Lackland AFB, Texas is also programmed to
    take on the role as the AF's sole C-5 Formal Training Unit (FTU)
    replacing Altus AFB, Oklahoma in fiscal year 2007. Manpower savings
    from the C-141 retirements and the active duty retirement of
    Continental United States C-9 at Scott AFB, Illinois allows AFRC to
    increase its KC-135 Unit Equipped crew ratios from 1.27 to 1.5, and C-
    130 crews from 1.75 to 2--allowing the Command to better use those
    assets in accordance with increased requirements in recent years.
    Overall, the 2004 budget request realigns and changes over 4,500
    reserve military and civilian positions in fiscal year 2004, matching
    personnel to requirements while divesting AFRC of legacy missions.
    These realignments and changes are primarily driven by AFRC's
    transformation programs.

                            OPERATION IRAQI FREEDOM

        Question. How has mobilization for Operation Iraqi Freedom
    influenced next year's budget request?
        Answer. Mobilization has not influenced our budget request at all.
    AFRC budgets are developed to maintain normal training for the entire
    Air Force Reserve as if there were no mobilization. Because
    mobilization effects are undeterminable at the time budgets are
    developed, mobilization is dealt with as an execution year issue.
        Question. What lessons have you learned from the most recent
    mobilization and how can you improve the process for next time?
        Answer. Our lessons learned from previous mobilizations helped us
    immensely in dealing with Operation Iraqi Freedom. Perhaps one of the
    most important lessons learned is the need for a centralized up-to-date
    handbook for readiness/mobilization policy and procedures for all three
    Air Force components to use. As of this writing, a new version of the
    out-of-date publication (AFH 10-416 Personnel Readiness and
    Mobilization dated December 22, 1994) is being finalized and
    coordinated by the active Air Force.
        Timely submission of mobilization requirements would improve
    coordination with gaining MAJCOMs and AFRC and improve the mobilization
    package for processing and approval by Air Force Manpower and Reserve
    Affairs (SAF/MR).
        Based on a much clearer vision of requirements under this
    operation, we learned that only the most stressed Air Force Specialty
    Codes (AFSCs) needed to be included under Stop Loss. Through the use of
    a Total Force formula for identifying ``stressed'' AFSCs, only those
    that are absolutely needed will be Stop Lossed.
        Finally, we learned that we needed continuous communication and
    coordination with our gaining MAJCOM partners, in emphasizing the
    necessity for rotation of reservists to allow sufficient time prior to
    demobilization to provide for the use of accrued leave, downtime,
    medical assessments and reconstitution if appropriate.

                          TRICARE HEALTH CARE COVERAGE

        Question. What are your thoughts on extending TRICARE health care
    coverage to members and families of the Reserve on a cost-share basis?
    Would this provide a needed service to our Reservists? Would employers
    view it as an incentive to hire Reservists?
        Answer. Reserve component members become eligible for military
    health benefits when they are placed on active duty orders. The family
    members become eligible for TRICARE benefits when the member receives
    orders for greater than 30 days. The recent changes to policy
    permitting reserve component members and their families to enter
    TRICARE Prime at 31 days of active duty orders instead of 179, had a
    positive impact on members of the reserve in general. It brought a
    significant benefit in reach to members that required low cost quality
    health insurance. The proposed legislation of Senate Bill 852 extending
    health care coverage on a cost share basis to reserve members and their
    families will complement, complete and make comprehensive the medical
    benefits we offer Reservists.
        GAO report dated September 2002 on Defense Health Care, ``Most
    Reservists Have Civilian Health Coverage, but More Assistance is Needed
    When TRICARE is Used'' identified that 20 percent of Americas are
    without health insurance and the reserve forces are a microcosm of
    American society. Therefore at a estimated minimum 20 percent of our
    reserve component population is without health insurance for themselves
    and their families. The GAO in their report also indicated that a
    government purchased/cost share plan would be well received. Offering
    medical benefits through TRICARE on a cost shared basis, like the
    TRICARE Dental Program would be a welcomed benefit. There also exist
    advantages for both the DOD and the member and their family to
    participate. Below is a short examination of those advantages:
        1. Offering a low cost insurance plan will offer greater incentive
    for individuals to join and/or remain in the reserve. This is
    especially true for the self-employed.
        2. TRICARE as a health plan offers equal to or better benefits than
    many smaller employers can offer.
        3. Keeping the same health insurance and the same physicians even
    when the member moves from one employer to the next (and mobilization),
    providing the ultimate experience in health insurance portability and
    continuity of care. This too serves as an incentive to remain in the
    reserve and make it a career.
        Many small companies/employers may not be able to offer health
    insurance to their work force so this provides the reserve member the
    option to look for work in these areas. It frees the member from
    linking employers to the type of job they must look for.
        Advantage to the DOD will be seen in fewer members having problems
    using TRICARE benefits when activated, since more members will know the
    TRICARE system better.
        Transitioning from active duty status to Transitional Health Care
    Benefits to a Reserve TRICARE Health Benefits plan would make it
    seamless, and offers reserve members that don't have jobs to return to
    more flexibility and make their reserve duty experience less stressful.
        4. It may serve as an incentive to hire the reservist. Health
    insurance, next to salaries, is the most expensive benefit an employer
    may pay. Ranging any where between $6600.00 to $7,500.00 annually, an
    employer may even offer to reimburse the reservist a portion of their
    premiums if they use their TRICARE benefit. The member themselves may
    be in a position to negotiate a higher salary or wage based upon lower
    cost. Many employers will translate this as a ``real savings'' and
    bottom line issue.
        5. Since this offers real saving to the employer, the government
    controversy to offer tax saving/incentives to employers who have
    reservists, the availability of TRICARE health coverage may be seen as
    benefit without offering additional tax credits.
        6. Benefit to the government may be seen in the shape of fewer
    problems with members and their families transitioning from one health
    plan to another when brought on active duty or mobilized.
        7. Identifying family members that have special medical needs may
    be easier and reduces the burden/stress on the Military Healthcare
    System, TRICARE Management Activity (TMA) and the member on how to get
    care when the member is activated.
        Other Recommendations:
        1. Law should include that all aspects of TRICARE benefits be
    extended. Many members live in remote areas and TRICARE Prime Remote/
    TRICARE Prime Remote for Active Duty Family Members' equivalent must be
    offered to make this plan relevant to all reservists.
        2. Law should direct TMA to expand provider networks and update
    their participating provider listings annually to keep them current.
    Many listings are currently long out of date.
        3. Cost share premiums must be low enough to serve as incentive to
    join the plan. Since many employers cost share their plans with their
    employees, the average coat share (employee cost) ranges from $150 to
    $300 monthly.

                                   RESERVISTS

        Question. How can you recommend we better support the employers of
    our Reservists?
        Answer. Employers of reservists are key enablers for maintaining
    the readiness of our reserve service members and their support is vital
    to the Total Force. Employers give up key personnel from their
    workforce to provide support for national defense for extended duration
    periods. Beyond that, many employers have stepped forward to assure
    their employee-reservists do not take a substantial cut in pay when
    called to active duty by making up the difference between their active
    duty pay and their civilian pay. Other employers have provided
    continuing health care premium payments to assure ongoing health care
    coverage for family members of reservists. While these efforts are
    laudable, it is unreasonable to expect such generosity to continue for
    an extended period as reservists enter the second year of, or
    subsequent mobilizations. Moreover, it is also the case that employers
    should not be faced with a financial disincentive to hire reservists,
    nor bear an unreasonable proportion of the financial costs of
    mobilization.
        In recognizing employer support of reservists, Congressional
    leaders have introduced several bills tailored to recognizing the
    contributions of employers of reservists that would go far in
    supporting employers. Among these bills are proposed tax relief in the
    form of tax deductions and credits for employers of reservists, health
    care initiatives that would address care ``gaps'' and ``continuity of
    care'' issues reported by some reservists. In particular, allowing
    reservists to participate in a proposed group TRICARE cost-share
    program would benefit employers, and encourage hiring of reservists at
    a time when anecdotal reports indicate a less than enthusiastic
    propensity by some employers to hire reservists. As a major benefit
    cost for employers would be eliminated, this would provide a strong
    incentive for civilian employers to hire Reserve Component members.
    Also, civilian employers would not incur the expense of paying premiums
    for employees who are mobilized if the member elected to have TRICARE
    benefits only. Furthermore, TRICARE would be the sole payee for any
    valid insurance claims.
        We must also continue supporting employers and enhance assistance
    through support-organizations such as Employer Support of the Guard and
    Reserve (ESGR). Ongoing communication between Reserve Component
    leadership, individual service members, support organizations and
    employers will strengthen relationships among these groups, minimize
    problems that arise, and facilitate swift resolution to problems as
    they occur.

                              EQUIPMENT READINESS

        Question. The Air Force Reserve has performed world-wide missions
    in support of the War on Terrorism since September 12, 2001. I am
    interested in knowing more about the equipment readiness of the Air
    Force Reserve and how the deployments might impact that readiness.
    Specifically, please tell me:
        What significant equipment shortfalls exist in the Air Force
    Reserve?
        Answer. With regard to equipment shortfalls as it relates to the
    War on Terrorism, and the readiness of the Air Force Reserve to support
    the War on Terrorism, the following list of items is submitted.
        The WC-130J radar modification.
        F-16 color display processor.
        F-16 Litening II pod upgrade.
        F-16 Litening AT pod procurement.
        Security Forces UTC/LOGDET mobility equipment.
        A-10 Litening AT procurement.
        B-52 Litening AT procurement.
        Deployable secure tactical radios.
        C-5 Airlift Defensive Systems.
        APN-241 radar replacement for C-130E/H.
        Question. How do these shortfalls impact the Air Force Reserve's
    mission in support of the war on terrorism?
        Answer. The lack of equipment effectively prevents the Air Force
    Reserve from achieving its maxim combat capability.
        WC-130J radar modification is required to correct display
    inconsistencies and boost detection range of weather hazards through
    software and hardware changes for the 10 Hurricane Hunter aircraft.
    Without these radar modifications the WC-130 J-model is not currently
    capable of penetrating hurricanes.
        F-16 Color Display Processor replaces the overloaded and
    logistically unsupportable data display processor and provides color
    multi-functional display for weapons, navigation, and aircraft systems
    information. The upgraded display will enhance pilot situational
    awareness in combat and increase overall combat capability of the 69 F-
    16 aircraft fleet in the Air Force Reserve.
        F-16 Litening II pod upgrade enhances target detection range and
    target tracking accuracy. Pilots will have greater flexibility with
    increased safety while attacking targets with greater precision and
    minimizing collateral damage. This upgrade will bring the existing pods
    up to the capability of the enhanced Litening AT version.
        F-16 Litening AT pod is the most capable multi-sensor targeting
    pod, which provides enhanced precision strike capability while
    minimizing collateral damage. The Litening II pod was used with great
    success during the War in Afghanistan and during Operation Iraqi
    Freedom. Currently, there are 30 Litening II pods shared between 132
    aircraft F-16, A-10 and B-52's.
        Security Forces UTC/LOGDET mobility equipment funds are required to
    replace assets such as field telecommunication equipment, tactical
    radios, night vision devices, pallets and cargo nets. These assets were
    deployed in direct support of Operations Enduring Freedom and Iraqi
    Freedom and left in country in support of commander's request. Funds
    are also required to acquire equipment for newly assigned Security
    Forces, which have already started deploying without all required
    equipment due to short notice taskings and previously deployed
    equipment.
        A-10 Litening AT pod is the most capable multi-sensor targeting
    pod, which provides enhanced precision strike capability while
    minimizing collateral damage. The Litening II pod was first used by the
    A-10 in combat with great success during the Operation Iraqi Freedom.
    Currently, there are 30 Litening II pods shared between 132 aircraft F-
    16, A-10 and B-52's.
        B-52 Litening AT pod is the most capable multi-sensor targeting
    pod, which provides enhanced precision strike capability while
    minimizing collateral damage. The Litening II pod was first used by the
    B-52 in combat with great success during the Operation Iraqi Freedom.
    Currently, there are 30 Litening II pods shared between 132 aircraft F-
    16, A-10 and B-52's.
        The Deployable secure tactical radios are needed to replace the
    Scope Shield I and II tactical field radios which are unsupportable and
    must be replaced. They are no longer depot repairable and are
    technically unsupportable. Secure tactical radios are the Air Force's
    primary means of communication for force protection operations.
        The C-5 Airlift Defensive System is intended to provide protection
    against infrared (IR)-guided surface-to-air missile threats in low-
    threat and some medium-threat environments. The system is designed to
    detect the threat, alert the crew, and automatically expend IR
    countermeasure decoys.
        The APN-241 Radar replacement for C-130 E/H is the AMC standard
    radar to replace the APN-59 for combat delivery aircraft. The current
    APN-59 radar system does not meet mission reliability, maintainability,
    and supportability requirements. Cost to maintain an antiquated APN-59
    system is becoming prohibitive. HQ AMC is working a program to replace
    the APN-59 radar on the entire C-130 fleet with new generation low-
    power color radars under the Avionics Modernization Program (AMP);
    however, the AMP Program has taken several budget cuts and is being
    extended into the future.
        Question. What are the potential future impacts of these equipment
    shortfalls?
        Answer. The potential future impact of these equipment shortfalls
    will prevent the Air Force Reserve from maintaining interoperability
    not only within the total force construct, but the entire battle space
    shared by our sister services and allies. In order to maintain
    relevance and provide the combat capability required by the Combatant
    Commanders, the Air Force Reserve must modernize.

                              SUBCOMMITTEE RECESS

        Senator Stevens. We appreciate your service and your
    willingness to be with us today. We're going to reconvene on
    May 14 to hear from the Secretary of Defense.
        Thank you very much.
        [Whereupon, at 12:25 a.m., Wednesday, May 7, the
    subcommittee was recessed, to reconvene at 10:30 a.m.,
    Wednesday, May 14.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                            WEDNESDAY, MAY 14, 2003

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:33 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Specter, Domenici,
    Shelby, Burns, Inouye, Hollings, Byrd, Leahy, Durbin, and
    Feinstein.

                             DEPARTMENT OF DEFENSE

                            Office of the Secretary

    STATEMENT OF HON. DONALD RUMSFELD, SECRETARY OF DEFENSE
    ACCOMPANIED BY:
            DOV ZAKHEIM, Ph.D., COMPTROLLER, DEPARTMENT OF DEFENSE
            GENERAL PETER PACE, U.S. ARMY, VICE CHAIRMAN, JOINT CHIEFS OF
                STAFF

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning, Mr. Secretary, General Pace,
    and Secretary Zakheim. We welcome you back before the
    committee.
        Because of the number of people I believe will come to the
    table, before we get started I ask that all members limit their
    comments to not more than 2 minutes as we get started on this
    hearing so we can listen to the Secretary and get Senators'
    questions.
        The committee continues to review the fiscal year 2004
    defense budget and we are going to be very interested in
    hearing from you about the expenditure of the 2003 supplemental
    for military operations in Iraq and for the global war on
    terrorism. We also look forward to hearing today your
    priorities in the budget request regarding investments for the
    future derived from lessons learned from these overseas
    operations we have been involved in.
        It may be too early to really understand all of those
    lessons, but we do hope to hear from you about our operations,
    not only in Iraq, but Afghanistan. I know we will have many
    times in the coming months to review your statement in full,
    which we will put in the record as though read.
        I yield to my good friend from Hawaii, and I hope all
    Senators will abide by the 2-minute limitation.

                 PREPARED STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Good afternoon, Mr. Chairman. Pursuant to
    your request, may I request that my statement be made part of
    the record.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Good morning Mr. Secretary. I want to join our chairman in
    welcoming you as the subcommittee concludes its Defense
    Department hearings on the fiscal year 2004 budget request. Mr.
    Secretary, these days we hear the word transformation a lot. I
    am sure you and the chairman will recall that it was General
    Shinseki who first used the term to describe his plans for the
    Army.
        Mr. Secretary, today we hope you will inform us how the
    concept of transformation is incorporated in your budget
    request for fiscal year 2004. But Mr. Chairman you and I are
    also keenly aware that the systems that were so successful in
    the recent war in Iraq were not part of transformation;
    virtually all resulted from investments by previous
    administrations.
        The M-1 tank, Apache helicopter, and the F-117 were
    developed in the 1970's. The Tomahawk missile, the B-2 bomber,
    the aegis ships were first purchased in the 1980's. Even
    JSTARS, and JDAM missiles were developed long before the
    current administration came into office.
        So we hope to hear as well Mr. Secretary how your fiscal
    year 2004 request builds on the successes of your predecessors.
        During our hearings this year we received testimony from
    the leaders of the military departments and the Guard and
    Reserves, and from the Surgeons General. As we have examined
    the testimony of these officials, it is clear they are
    basically pleased with your budget request.
        The Navy might not have enough ships, but that is mostly
    because the ship programs aren't ready to be accelerated.
        This year, we learned more about the shortfall and aging of
    our Air Force tanker and transport aircraft while we await your
    decision on leasing.
        General Hagee gave us an optimistic assessment of the V-22
    for the marines. We would like to hear your assessment as well.
        The Army testified that it desperately needs six Stryker
    brigrages. Again, we await your thoughts on this matter.
        We would also like to hear about your reviews of our
    amphibious forces and submarine fleet, and the status of our
    space programs. Mr. Secretary, you know this committee wants to
    help you transform the military to ensure that we can prevent
    future wars. As always, we stand ready to assist you.
        Thank you Mr. Chairman and I look forward to hearing the
    Secretary's testimony and responses to the committee's
    questions.

        Secretary Rumsfeld. Good morning.
        Senator Inouye. Good morning, Mr. Secretary. I want to join
    my chairman in welcoming you and your staff to be with us today
    for a very important hearing. May I congratulate you and,
    through you, the troops of the United States of America.
        Secretary Rumsfeld. Thank you very much, sir. They did a
    wonderful job.
        Senator Stevens. Senator Burns.

                   PREPARED STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. I will submit my statement for the record,
    Mr. Chairman. We want to welcome the Secretary of Defense this
    morning and look forward to hearing his comments. We are
    looking at a different kind of a world now since the Iraqi
    operation and I look forward to working with the Secretary in
    doing some of that planning.
        Thank you very much.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Thank you, Mr. Chairman. I would like to thank you,
    Secretary Rumsfeld, for being here today. I know you all are--
    as so many are--incredibly busy, considering current events
    around the world.
        Our active military forces have seen a lot of action as of
    late. The Guard and Reserve components have experienced an
    increased operations tempo as well. The performance of our
    military men and women has been outstanding.
        Our military has performed honorably in the latest missions
    with which it has been tasked--the Global War on Terrorism,
    Operation Enduring Freedom and Operation Iraqi Freedom. While
    there indeed was a lot that was done right in all of these
    operations, I hope we continue to look back to see where we
    could have done better. Here at home, we have witnessed
    employers and communities coming together to support these men
    and women and their families.
        Ensuring that our military men and women have the proper
    training, equipment and facilities necessary to carry out their
    duties is essential. I pledge to do what I can to ensure that
    the United States military has the tools, skills and support
    needed to maintain its position as the finest fighting force in
    the world.
        Again, I thank you for being here today. I look forward to
    hearing your testimony and listening to the discussion this
    morning.
        Thank you.

        Senator Stevens. Senator Hollings.

                    STATEMENT OF SENATOR ERNEST F. HOLLINGS

        Senator Hollings. Thank you, Mr. Chairman.
        Mr. Secretary, I have supported you before you became
    popular, and the jointness that I have in what we call SPAWAR
    down in Charleston, South Carolina, I want you to see that.
    That is a Rumsfeld operation and I want you to come and visit
    it.
        Thank you, Mr. Chairman.
        Senator Stevens. Mr. Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Mr. Chairman, I just want to welcome the
    Secretary back here. There is nothing like success and you
    epitomize that.
        Thank you.
        Secretary Rumsfeld. Thank you, sir.
        Senator Stevens. Senator Byrd.

                      STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you, Mr. Chairman.
        Mr. Secretary, I want to congratulate the Department on the
    work that it has done with respect to cleaning up the
    information concerning the status of accounts. We talked
    several months ago about the fact that the Defense Department
    could not trace, could not trace $3 trillion of its inventory,
    of its accounts. Dr. Zakheim was just telling me a little while
    ago that you have gotten that down now to less than $800
    million, you are still working on it, and I want to
    congratulate you on that, on that progress.
        You indicated at that time that you were going to get your
    teeth into it, that you were going to get hold of it, and you
    were going to turn it around, and you are doing that. You are
    doing that. I want to thank you and congratulate you.
        Secretary Rumsfeld. Thank you, sir.
        Senator Stevens. Mrs. Feinstein.

                     STATEMENT OF SENATOR DIANNE FEINSTEIN

        Senator Feinstein. Thank you very much, Mr. Chairman.
        I would just say welcome. I have a number of questions and
    I will reserve them for the appropriate time. Thank you.
        Senator Stevens. I thank you all for your cooperation.
    Senator Leahy, did I call on you?

                     STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. You did not, but I am glad to see the
    Secretary. When he first--when he was first Secretary of
    Defense, he was the youngest Secretary of Defense; I was the
    second youngest member of the Senate. I have aged. He has done
    a Dorian Gray; he has not. I am glad to see him here.
        Senator Stevens. Again, I thank you all.
        Mr. Secretary, pleased to hear from you, and the statements
    you have presented will be printed in full in the record.
        Secretary Rumsfeld. Thank you very much, Mr. Chairman and
    members of the committee. I appreciate your putting the entire
    statement in the record and I will make some remarks from that
    statement.
        Senator Stevens. We do not have copies of that statement.
    They gave them out to the press, but we do not have them up
    here. It would be nice if we had one, too.
        Secretary Rumsfeld. I will see that that happens.
        Senator Feinstein. Yes, we do.
        Secretary Rumsfeld. Others seem to have it. I do not know.
        Senator Stevens. Thank you.
        Secretary Rumsfeld. We can pass one up to you, Mr.
    Chairman.
        Senator Stevens. Thank you very much.

                     SECRETARY RUMSFELD'S OPENING STATEMENT

        Secretary Rumsfeld. Mr. Chairman and members of the
    committee: I am accompanied by Dr. Dov Zakheim, Comptroller of
    the Department of Defense, and General Pete Pace, the Vice
    Chief of Staff--the Vice Chairman correctly, the Vice Chairman
    of the Joint Chiefs of Staff, in Dick Myers' absence.
        We thank you for this opportunity to update the committee
    on our progress in our efforts to try to strengthen the
    Department to meet the challenges of the 21st century and to
    discuss the President's request for fiscal year 2004 to 2009. I
    also want to thank the members of this committee, Mr. Chairman,
    and you for the action, prompt action, on the President's
    emergency 2003 supplemental request for the global war on
    terror. Passage of that legislation will certainly help provide
    the fighting men and women with the capabilities they need, to
    prosecute the war on terror in the weeks and months ahead.
        As several of you have said, our troops have been and are
    doing a truly superb job all across the globe, and we are
    certainly grateful to them for their dedication and their
    courage, and also for the fact that they are all volunteers who
    stepped forward to serve their country. They crossed hundreds
    of miles in Iraq, facing death squads and dust storms, and
    liberated Baghdad in less than a month.
        What they accomplished is very likely going to go down in
    history books.

                            APPLYING LESSONS LEARNED

        The Department, as you point out, cannot wait for history
    to be written. We need to meet the threats that this dangerous
    new century poses, and threats that emerge often without
    warning. We have to apply the lessons from the experiences in
    Afghanistan and Iraq to transform the Department and the
    services as to how they organize, how they train, how they
    equip and exercise and fight.
        Even now, while the lessons learned process is still in its
    early stages, we can already see that the experience in Iraq
    has validated some of the strategic decisions that we made in
    our defense reviews over the past 2 plus years, decisions that
    in some ways contributed and drove this 2004 budget.
        Consider a few of the lessons. One is speed, and it
    matters. Coalition forces pressed through southern Iraq in a
    matter of weeks. It seems likely that the enemy was not able to
    mount a coherent defense or attack its neighbors, as it had in
    1991 with Scud missiles, or destroy its oil wells. It did
    manage to destroy a handful or so, but not all of them, as they
    did in Kuwait 12 years ago. We believe that in part this was
    because the coalition advance was so much faster than had been
    anticipated.
        The experience highlights the value of capabilities that
    can move quickly into theater, reach targets with speed and
    agility.
        Another important lesson involves intelligence and the
    ability to act on intelligence rapidly. In Iraq, using time-
    sensitive targeting cells, the coalition was able to launch
    attacks on enemy targets in some cases in 20 minutes, based on
    intelligence information that was fresh. Planes taking off for
    bombing runs on occasion did not receive their targeting
    information until they were in the air and well on their way.
        The success of Operation Iraqi Freedom helps to validate
    the recommendation in the budget for increased investments in
    command, control, communications, intelligence, and persistent
    surveillance.
        Another is the importance of precision. The capabilities
    employed in Iraq were discrete. One new weapon used for the
    first time in Iraq, a thermobaric Hellfire missile, can take
    out the first floor of a building without damaging the floors
    above and is capable of reaching around corners, striking enemy
    forces that hide in caves or bunkers and hardened multi-room
    complexes. It went from development to deployment in less than
    1 year.
        Coalition military planners used a sophisticated computer
    model to determine the precise direction, the angle of attack,
    and the type of weapon needed to destroy desired targets while
    sparing nearby civilian facilities.
        It was important that we won, but it was also important how
    we won, and the fact that this conflict was done with greater
    precision than any conflict in history and as a result it had
    to have persuaded the Iraqi people that the effort was not
    against the country of Iraq, was not against the Iraqi people,
    was not against the religion, but, in fact, was against a
    regime.
        We believe that these experiences support the decision to
    request increases in the 2004 budget for research and
    development, testing, evaluation, procurement, as well as the
    decision to try to begin changing how we develop new
    capabilities by employing spiral development to allow us to
    bring new weapons to the field in a matter of months or years
    instead of decades, which has been the pattern.
        Another lesson in Iraq is the importance of joint
    operations. U.S. forces, as General Tom Franks properly points
    out, did not fight as individual services on a deconflicted
    basis, which has been historically the pattern. Instead, they
    fought as a truly joint force. One example is the rescue of PFC
    Jessica Lynch, which was made possible by a joint team of Navy
    SEALs, Army Rangers, Marines, Air Force Special Operators, of
    course with the help of an Iraqi citizen.
        The joint warfighting experience in Iraq supports the
    request in the budget to make new investments in joint training
    and in joint warfighting capabilities.
        Another lesson was the importance of Special Operations
    Forces. In Iraq the special operators were the first coalition
    forces to hit the ground. Indeed, a number of them went in
    before the war formally began, with hundreds more pouring into
    the western portion of Iraq and other regions just before the
    ground invasion, securing airfields, attacking terrorist
    facilities and regime targets, and taking out the regime's
    capability to launch attacks against neighboring countries.
        These experiences, as well as the remarkable performance of
    special operators in Afghanistan, we believe support the
    decisions that we have made and the proposals we have made to
    transform the Special Operations Command and to request needed
    new investments in Special Operations in the budget.
        There will be other important lessons as we study Operation
    Iraqi Freedom. But the point is this. This budget was developed
    with warfare of this kind in mind and the experiences in
    fighting this war have confirmed the decisions made in the
    defense review, which are reflected in the budget before the
    committee.

                     TRANSFORMING TO MEET CHANGING THREATS

        Mr. Chairman, over the past 2 years the senior civilian and
    military leaders of the Department have been working to
    determine how the Department of Defense (DOD) can best
    transform to meet the changing threats of the new century. This
    year's budget request before you is the first to fully reflect
    the new defense strategies and policies and the lessons of the
    global war on terror. Our defense review identified six goals
    that drive transformation efforts:
        First, we have to be able to defend the homeland and bases
    of operations.
        Second, we have to be able to project and sustain forces in
    distant theaters. That is clear after these two recent events.
        Third, we have to be able to deny enemy sanctuaries.
        Fourth, we have to improve space capabilities and maintain
    unhindered access to space.
        Fifth, we need to harness our substantial advantages in
    information technology to link up different kinds of United
    States (U.S.) forces so that they can fight jointly.
        And sixth, we have to be able to protect U.S. information
    networks from attack and to be able to disable the information
    networks of our adversaries to limit their ability to
    communicate.
        This budget request funds investments that support these
    transformational goals. Over the next 6 years, we have proposed
    a 30 percent increase in procurement funding and a 65 percent
    increase in funding for research, development, testing, and
    evaluation above the 2002 baseline budget. That is an
    investment of roughly $150 billion annually.
        In addition to these increases, the research, development,
    test, and evaluation (RDT&E) spending will rise from 36 percent
    to 42 percent of the overall investment budget. This shift
    reflects a decision to accept some near-term risk in order to
    accelerate the development of needed next generational systems.
        Among the more important transformational investments we
    propose is a request for funds to establish a new Joint
    National Training Capability. To ensure that U.S. forces train
    like they fight and fight like they train, we have budgeted
    $1.8 billion over the forward year defense plan to fund range
    improvements and to permit more of both live and virtual joint
    training, an annual investment of about $300 million.
        The total investment in transforming military capabilities
    in this budget request for fiscal year 2004 is $24 billion or
    about $240 billion over the Future Year Defense Program.

                                 BALANCING RISK

        Even as we accept some increased near-term risk--and this
    budget does accept near-term risk--so that we can prepare for
    the future, it also recognizes that new and unexpected dangers
    will likely be awaiting us over the horizon. That is why this
    budget requests increased investments in critical areas such as
    readiness, quality of life, improvements for the men and women
    in uniform, and to make certain existing capabilities are
    properly maintained and replenished.
        We have made investments that should stabilize funding for
    training, spares, and OPTEMPO and put a stop to past practices
    of raiding the investment accounts to pay for the immediate
    operations and maintenance needs. So we stop robbing the future
    to pay for today's urgent bills.
        In this request for fiscal year 2004, we increase the
    shipbuilding budget by $2.7 billion, making good on our hope
    last year that we could increase shipbuilding from five to
    seven ships per year.
        We increase the Special Operations budget by $1.5 billion
    to pay for equipment lost in the global war on terror and for
    an additional 1,890 people.
        We increase military and civilian pay proposals by $3.7
    billion, increase missile defense by $1.75 billion, including
    increased funding for Research and Development of promising new
    technologies, and to deploy a small number of interceptors
    beginning in 2004.
        The President has asked Congress for a total of $379.9
    billion for 2004. That is a $15.3 billion increase over last
    year's budget. But even that increase only moves us part of the
    way, requiring us to make tough choices between competing
    demands, and that means that some desirable capabilities do not
    get funded in this budget.
        Yet, in making those decisions we believe we made better
    choices this year because we followed a new approach to
    balancing risks that we developed in last year's defense
    review. It is an approach that tries to take into account not
    just the risks to operations and contingency plans, but also
    the risks to the force, to the men and women in uniform, to
    make sure we can attract and retain the right people, and risks
    to modernization or the failure to modernize, if you will, as
    well as the risk to the future or the failure to transform,
    risks that in the past had often been crowded out by more
    immediate, pressing demands. The result is, we believe, a more
    balanced approach and a more overall coherent program.
        To free resources, the services have stepped up and will be
    canceling, slowing, or restructuring a number of programs so
    that they can invest those savings in transforming
    capabilities. In all, by retiring or restructuring less urgent
    programs we believe we can achieve savings of some $80 billion
    over the Future Year Defense Program, money that will be
    reinvested by the services in capabilities for the 21st
    century.
        As you consider the budget, I am sure you will hear
    pleading for a number of programs and plausible arguments as to
    why this or that program should be saved or funded at a higher
    rate. I suspect some may disagree with decisions that have been
    made in this budget and may want to make changes in the budget
    proposal, and certainly as a former member of Congress I
    recognize that Article I of the Constitution, the Congress is
    Article I, that the President proposes and the Congress
    disposes. I know that.
        But it is also important, it seems to me, that as the
    committee considers potential changes it recognizes that this
    budget--we have tried to balance those risks, and it is not an
    easy thing to do. This is not to suggest that the budget before
    you is perfect. Certainly no one has a monopoly on wisdom, and
    there are a number of examples I could cite wherein Congress
    pressed the Executive Branch over the years to invest in
    programs, such as the Joint Surveillance Target Attach Radar
    System (JSTARS), Unmanned Aerial Vehicles (UAV's), that later
    proved critical to the success of the armed forces.
        What I am suggesting is that if changes are made, and they
    will be, that they be made in a coherent way, that we have a
    chance to talk them through, and that they are made with a full
    understanding of the implications, not only on the program in
    question that somebody may want to increase, but also on the
    costs in terms of the reductions that have to take place in
    other areas.
        We have done our best to develop a budget with what we
    believe has been unprecedented transparency. We hope that this
    spirit of openness and cooperation will continue as Congress
    deliberates.

                              IMPROVING MANAGEMENT

        Finally, Mr. Chairman, we really cannot transform unless we
    have the ability to better manage the Department. In an age
    where terrorists move information at the speed of an E-mail,
    money at the speed of a wire transfer, and people at the speed
    of a commercial jet liner, the Defense Department is, to be
    very honest, still bogged down in bureaucratic processes that
    resulted from the industrial age, not the information age.
        Some of our difficulties are self-imposed by the
    Department, to be sure. Others, however, are the result of law
    and regulation, and together they have created a culture that
    too often stifles innovation in the Department. The result is
    we are fighting the first wars of the 21st century with a
    Department that was fashioned, organized, to meet the
    challenges of the mid-20th century.
        Our legislative proposal, the Defense Transformation Act
    for the 21st Century, would give the Department the needed
    flexibility. Among the provisions in this legislation, many of
    which I admit are controversial, and I know that, we have
    proposed more flexible rules for the flow of money through the
    Department to give us the ability to respond to urgent needs as
    they emerge. We have proposed elimination of some of the more
    onerous regulations that make it difficult or virtually
    impossible for many small businesses to do business with the
    Department of Defense.
        We have proposed expanded authority for competitive
    outsourcing so that we can get military personnel out of non-
    military tasks and back into the field. We have proposed
    measures for transforming our system of personnel management so
    that we can gain more flexibility and agility as to how we
    manage the more than 700,000 civilians who provide the
    Department such vital support. We need a performance-based
    promotion system for our civilian work force that rewards
    excellence, just like the one Congress insisted on for the men
    and women in uniform.
        Mr. Chairman and members, transformation, as you know well,
    is not an event; it is not something that starts and then ends.
    It is a process, it is a culture, it is a frame of mind. Our
    goal is to set in motion that process and culture that will
    keep the United States several steps ahead of our potential
    adversaries. To do that, we need not only resources, but
    equally we need flexibility to use those resources with speed
    and agility so we can respond quickly to the new threats that
    we face as this century unfolds.

                               PREPARED STATEMENT

        Mr. Chairman, I thank you for your attention. General Pace
    and Dov Zakheim and I are available to respond to questions,
    unless you have a statement, General Pace.
        [The statement follows:]

                    Prepared Statement of Donald H. Rumsfeld

                                  INTRODUCTION

        Mr. Chairman and Members of the Committee, thank you for this
    opportunity to update the Committee on our progress in strengthening
    the Department of Defense for the 21st century challenges, and to
    discuss the President's budget request for fiscal year 2004-2009.
        I also want to thank you and the members for your action on the
    President's emergency supplemental request for the global war on
    terror. Your prompt passage of that legislation will help to provide
    for our fighting men and women as they prosecute the global war on
    terror in the weeks and months ahead.
        Our troops are doing a superb job and deserve our thanks for their
    courage and dedication to duty.
        What coalition forces have accomplished in Operation Iraqi Freedom
    is remarkable. They crossed hundreds of miles in Iraq--facing death
    squads and dust storms--to liberate Baghdad in less than a month.
        Today, because of coalition forces' tenacity and skill, the regime
    of Saddam Hussein is no longer--and the Iraqi people are free to
    determine their own destiny.
        Visiting with the troops, I told them that what they accomplished
    will go down in the history books. And it will. But at the Department,
    we cannot afford to wait for history to be written. The threats we face
    in this dangerous new century are emerging, often without warning. We
    need to apply the lessons from the experience in Iraq to transform how
    the Department and the Services organize, train and equip for the 21st
    century.
        The ``lessons learned'' process for Operation Iraqi Freedom is well
    underway. It will likely impact budgets and procedures, training and
    doctrine, and the security of our country for some years to come. But
    even now, while that process is still in its early stages, we can
    already see that the experience in Iraq has validated a number of the
    strategic decisions that were made in our defense reviews over the past
    two years--decisions that drove the development of this 2004 budget.
        Consider a few of those lessons:
        One lesson is that speed matters. Coalition forces pressed through
    Southern Iraq in a matter of weeks, racing towards Baghdad. The enemy
    was unable to mount a coherent defense, use WMD, attack neighboring
    countries with SCUD missiles, destroy oil wells, or blow up dams,
    bridges and infrastructure--in part, we believe--because the coalition
    advance was so fast. This experience highlights the value of
    capabilities that can move quickly into theater and reach targets with
    speed and agility.
        Another is the importance of intelligence--and the ability to act
    on that intelligence rapidly. In Iraq, using ``Time Sensitive Targeting
    Cells,'' the coalition was able to launch attacks on enemy targets, in
    some cases within 20 minutes of receiving the intelligence information.
    Planes taking off for bombing runs on occasion did not receive their
    targeting information until they were in the air and well on their way.
    Ground forces were able to stay ``in contact'' with the enemy forces,
    and attack them with great effect, even as those forces made every
    effort to avoid contact. The success of these efforts in Operation
    Iraqi Freedom validates the recommendation in this budget for increased
    investments in command, control, communications, intelligence, and
    persistent surveillance.
        Another is the importance of precision. The capabilities employed
    in Iraq were discreet. One new weapon used for the first time in Iraq--
    a ``thermobaric'' Hellfire missile--can take out the first floor of a
    building without damaging the floors above, and is capable of reaching
    around corners, into niches and behind walls to strike enemy forces
    hiding in caves, bunkers and hardened multi-room complexes. It went
    from development to deployment in less than a year. Coalition military
    planners also used a sophisticated computer model to determine the
    precise direction, angle of attack and type of weapon needed to destroy
    a desired target, while sparing nearby civilian facilities.
        This unprecedented precision allowed the coalition to fight this
    war with unprecedented care--protecting innocent lives while delivering
    devastating damage to the Iraqi regime. There was no refugee crisis
    because Iraqis felt safe to stay in the cities as long as they stayed
    clear of military targets. As a result, the Iraqi people saw that this
    war was being waged not against a country, or a people or a religion,
    but against a regime--and that we were coming not as conquerors but as
    liberators. We believe these experiences support the decision to
    request increases in the 2004 budget for research, development, testing
    and evaluation, and for procurement, as well as the decision to change
    how we develop those new capabilities--by employing ``spiral
    development'' to allow us to bring new weapons to the field in months
    or years instead of decades.
        Another lesson in Iraq was the importance of joint operations. U.S.
    forces did not fight as individual deconflicted services. Instead, they
    fought as a truly joint force. One example is the rescue of Pfc.
    Jessica Lynch--it was made possible by a joint team of Navy SEALs, Army
    Rangers, Marines, and Air Force Special operators--with the help of an
    Iraqi citizen. The joint war fighting experience in Iraq supports the
    request in the 2004 budget to make new investments in joint training
    and in joint war fighting capabilities.
        Another lesson was the critical importance of special operations
    forces. In Iraq, special operators were the first coalition forces to
    hit the ground--some of them before the war formally began--with
    hundreds more pouring into Western Iraq and other regions just before
    the ground invasion--securing airfields, attacking terrorist facilities
    and regime targets, and taking out the regime's capability to launch
    attacks against neighboring countries. These experiences--as well as
    the remarkable performance of special operators in Afghanistan--support
    the decisions to transform the Special Operations Command and to
    request needed new investments in Special Operations in the 2004
    budget.
        There will be other important lessons as we study Operation Iraqi
    Freedom. But the point is this: the 2004 budget was developed with
    warfare of this kind in mind--and the experiences in fighting this war
    have confirmed the decisions made in the defense review which are
    reflected in the budget before the Committee today.
        Mr. Chairman, over the past two years, the senior civilian and
    military leaders of the Department have been working to determine how
    DOD can best transform to meet the changing threats of a new century.
    Together we have:
      --Fashioned a new defense strategy.
      --Replaced the decade-old two Major Theater War approach to sizing
            our forces with an approach more appropriate for the 21st
            century.
      --Developed a new approach to balancing risks that takes into account
            the risks in contingency plans and also the risks to the force,
            to modernization and to transformation.
      --Reorganized the Department to better focus our space activities.
      --Adopted a new Unified Command Plan, which establishes the new
            Northern Command to better defend the homeland; a Joint Forces
            Command that focuses on transformation; and a new Strategic
            Command responsible for early warning of, and defense against,
            missile attack and the conduct of long-range attacks.
      --Expanded the mission of the Special Operations Command, so that it
            cannot only support missions directed by the regional combatant
            commanders, but also plan and execute its own missions in the
            global war on terror.
      --Worked with Allies to develop a new NATO command structure and
            begin the development of a NATO Response Force that must be
            able to deploy in days and weeks, instead of months.
      --Taken steps to attract and retain needed skills in the Armed
            Forces, with targeted pay raises and quality of life
            improvements.
      --Reorganized and revitalized the missile defense research,
            development and testing program, freed from the constraints of
            the ABM Treaty.
      --Completed the Nuclear Posture Review, with a new approach to
            deterrence that will enhance our security, while permitting
            historic deep reductions in offensive nuclear weapons.
      --Moved from a ``threat-based'' to a ``capabilities-based'' approach
            to defense planning, focusing not only on who might threaten
            us, or where, or when--but also on how we might be threatened,
            and what portfolio of capabilities we will need to deter and
            defend against those new asymmetric threats.
        These are significant changes. Last year's budget--the 2003
    request--was finalized just as this defense review process was nearing
    completion. So while it included a top-line increase, and made
    important, and long-delayed investments in readiness, people,
    maintenance, and replacement of aging systems and facilities, we were
    only able to begin funding some transforming initiatives as the new
    defense strategy came into focus.
        But this year's budget--the 2004 request before you today--is the
    first to fully reflect the new defense strategies and policies and the
    lessons of the global war on terror.
        Our defense review identified six goals that drive our
    transformation efforts:
      --First, we must be able to defend the U.S. homeland and bases of
            operation overseas;
      --Second, we must be able to project and sustain forces in distant
            theaters;
      --Third, we must be able to deny enemies sanctuary;
      --Fourth, we must improve our space capabilities and maintain
            unhindered access to space;
      --Fifth, we must harness our substantial advantages in information
            technology to link up different kinds of U.S. forces, so they
            can fight jointly; and
      --Sixth, we must be able to protect U.S. information networks from
            attack-and to disable the information networks of our
            adversaries.
        The President's 2004 budget requests funds for investments that
    will support these transformational goals. For example:
      --For programs to help defend the U.S. homeland and bases of
            operation overseas--such as missile defense--we are requesting
            $7.9 billion in the 2004 budget, and $55 billion over the
            Future Years Defense Program (FYDP).
      --For programs to project and sustain forces in distant theaters--
            such as the new unmanned underwater vehicle program and the
            Future Combat Systems--we are requesting $8 billion in 2004,
            and $96 billion over the FYDP.
      --For programs to deny enemies sanctuary--such as unmanned combat
            aerial vehicles, and the conversion of SSBN to SSGN
            submarines--we are requesting $5.2 billion in 2004 and $49
            billion over the FYDP.
      --For programs to enhance U.S. space capabilities--such as Space
            Control Systems--we are requesting $300 million in 2004 and $5
            billion over the FYDP.
      --For programs to harness our advantages in information technology--
            such as laser satellite communications, Joint Tactical Radio,
            and the Deployable Joint Command and Control System--we are
            requesting $2.7 billion in 2004 and $28 billion over the FYDP.
      --For programs to protect U.S. information networks and attack those
            of our adversaries--such as the Air and Space Operations
            Center--we are requesting $200 million in 2004 and $6 billion
            over the FYDP.
        Over the next six years, we have proposed a 30 percent increase in
    procurement funding and a 65 percent increase in funding for research,
    development, testing and evaluation (RDT&E) above the 2002 baseline
    budget--an investment of roughly $150 billion annually.
        In addition to these increases, RDT&E spending will rise from 36
    percent to 42 percent of the overall investment budget. This shift
    reflects a decision to accept some near-term risk in order to
    accelerate the development of needed next generation systems.
        Among the more important transformational investments we propose is
    a request for funds to establish a new Joint National Training
    Capability. As we saw in Iraq, wars in the 21st century will be fought
    jointly. Yet too often our forces still train and prepare for war as
    individual services. That needs to change.
        To ensure that U.S. forces train like they fight and fight like
    they train, we have budgeted $1.8 billion over the next six years to
    fund range improvements and permit more of both live and virtual joint
    training--an annual investment of $300 million.
        The total investment in transforming military capabilities in the
    2004 request is $24.3 billion, and about $240 billion over the FYDP.
        We propose not only transforming the capabilities at our disposal,
    but also the way we develop new capabilities. The old way was to
    develop a picture of the perfect system, and then build the system to
    meet that vision of perfection, however long it took or cost. The
    result was that, as technology advanced, and with it dreams of what a
    perfect system could do, capabilities were taking longer and longer to
    develop and the cost of systems increased again and again--Time is
    money.
        A different approach is to start with the basics, simpler items,
    and roll out early models faster--and then add capabilities to the
    basic system as they become available. This is what the private sector
    does--companies bring a new car or aircraft on line, for example, and
    then update it over a period of years with new designs and
    technologies. We need to do the same.
        Take, for example, the approach to ballistic missile defense.
    Instead of taking a decade or more to develop someone's vision of a
    ``perfect'' shield, we have instead decided to develop and put in place
    a rudimentary system by 2004--one which should make us somewhat safer
    than we are now--and then build on that foundation with increasingly
    effective capabilities as the technologies mature.
        We intend to apply this ``spiral development'' approach to a number
    of systems, restructured programs and new starts alike over the course
    of the FYDP. The result should be that new capabilities will be
    available faster, so we can better respond to fast moving adversaries
    and newly emerging threats.

                                 BALANCING RISK

        Even as we accept some increased near-term risk so we can prepare
    for the future, this budget also recognizes that new and unexpected
    dangers will likely be waiting just over the horizon--and that we must
    be flexible to face them.
        That is why the 2004 budget requests increased investments in
    critical areas such as: readiness, quality of life improvements for the
    men and women in uniform, and to make certain existing capabilities are
    properly maintained and replenished.
        Over the next six years, the President has requested a 15 percent
    increase for Military Personnel accounts, above the 2002 baseline
    budget, and an increase in funding for family housing by 10 percent
    over the same period. The 2004 budget includes $1 billion for targeted
    military pay raises, ranging from 2 percent to 6.25 percent. Out of
    pocket expenses for those living in private housing drop from 7.5
    percent to 3.5 percent in 2004, and are on a path to total elimination
    by 2005.
        Over the next six years, we have requested a 20 percent increase
    for Operations and Maintenance accounts above the 2002 baseline budget.
    We have proposed $40 billion for readiness of all the services and $6
    billion for facilities sustainment over the same period.
        These investments should stabilize funding for training, spares and
    OPTEMPO, and put a stop to the past practice of raiding the investment
    accounts to pay for the immediate operations and maintenance needs, so
    we stop robbing the future to pay today's urgent bills.
        In our 2004 request:
      --We increased the shipbuilding budget by $2.7 billion, making good
            on our hope last year that we could increase shipbuilding from
            five to seven ships.
      --We increased the Special Operations budget by $1.5 billion, to pay
            for equipment lost in the global war on terror and for an
            additional 1,890 personnel.
      --We increased military and civilian pay by $3.7 billion.
      --We increased missile defense by $1.5 billion, including increased
            funds for research and development of promising new
            technologies, and to deploy a small number of interceptors
            beginning in 2004.
        The President has asked Congress for a total of $379.9 billion for
    fiscal year 2004--a $15.3 billion increase over last year's budget.
    That is a large amount of the taxpayers' hard-earned money. But even
    that increase only moves us part of the way.
        Our challenge is to do three difficult things at once:
      --Win the global war on terror;
      --Prepare for the threats we will face later this decade; and
      --Continue transforming for the threats we will face in 2010 and
            beyond.
        Any one of those challenges is difficult--and expensive. Taking on
    all three, as we must, required us to make tough choices between
    competing demands--which meant that, inevitably, some desirable
    capabilities do not get funded. For example:
      --Despite the significant increase in shipbuilding, we did not get
            the shipbuilding rate up to the desired steady state of 10
            ships per year. Because of planned retirements of other ships,
            we will drop below a 300-ship fleet during the course of the
            FYDP. The Navy is in the process of transforming, and has two
            studies underway for amphibious ships and for submarines--we
            have increased shipbuilding in 2004, but we do not want to lock
            ourselves into a shipbuilding program now until we know
            precisely which ships we will want to build in the out-years.
      --We have not been able to modernize our tactical air forces fast
            enough to reduce the average age of our aircraft fleet.
      --We have had to delay elimination of all inadequate family housing
            by 2007--though we got close!
      --We have not fully resolved our so-called ``high-demand/low
            density'' problems--systems like JSTARS, which, because they
            have been chronically under funded in the past, will still be
            in short supply in this budget.
      --We opted not to modernize a number of legacy programs--taking on
            some near-term risks to fund transforming capabilities we will
            need in this fast moving world.
      --We did not achieve the level of growth in the Science and
            Technology (S&T) accounts we had hoped for. Our request is
            $10.2 billion, or 2.69 percent of the 2004 budget.
      --We have delayed investments to completely fix the recapitalization
            rate for DOD infrastructure. We still intend to get the rate
            down from 148 years to 67 years by 2008, and we expect to
            accelerate facilities investments in 2006 after we have made
            the needed decisions with respect to the appropriate base
            structure, at home and abroad. We are reviewing our worldwide
            base structure, and starting the steps to prepare for the 2005
            BRAC. We want to think carefully about how best to match our
            base structure and force structure.
        That's the bad news. But there is good news as well. In making
    those difficult decisions, we believe we made better choices this year
    because we followed the new approach to balancing risks that we
    developed in last year's defense review--an approach that takes into
    account not just the risks in operations and contingency plans, but
    also the risks to our force--the people, and risks to modernization and
    to the future--risks that, in the past, often had been crowded out by
    more immediate pressing demands. The result, we believe, is a more
    balanced approach and a more coherent program.
        To help free resources, the services have stepped up, and will be
    canceling, slowing or restructuring a number of programs so they can
    invest those savings in transforming capabilities. For example:
      --The Army came up with savings of some $22 billion over the six-year
            FYDP, by terminating 24 systems, including Crusader, the
            Bradley A3 and Abrams upgrades and reducing or restructuring
            another 24, including Medium Tactical Vehicles. The Army used
            these savings to help pay for new transformational
            capabilities, such as the Future Combat Systems.
      --The Navy reallocated nearly $39 billion over the FYDP, by retiring
            26 ships and 259 aircraft, and merging the Navy & Marine air
            forces. They invested these savings in new ship designs and
            aircraft.
      --The Air Force shifted funds and changed its business practices to
            account for nearly $21 billion over the FYDP. It will retire
            114 fighter and 115 mobility/tanker aircraft. The savings will
            be invested in readiness, people, modernization and new system
            starts and cutting edge systems like unmanned aerial vehicles
            (UAVs) and unmanned combat aerial vehicles (UCAVs).
        In all, by retiring or restructuring less urgent programs, we
    believe we can achieve savings of some $80 billion over the FYDP--money
    that will be reinvested by the services in capabilities for the 21st
    century.
        We feel a deep obligation to not waste the taxpayers' dollars. We
    need to show the taxpayers that we are willing to stop doing things
    that we don't need to be doing, and take that money and put it into
    investments we do need.
        As you consider this budget, I am sure you will hear pleading for a
    number of programs--and plausible arguments for why this or that
    program should be saved or funded at a higher rate. I suspect some may
    disagree with decisions that have been made, and may want to make
    changes in this budget proposal. As a former Member of Congress, I
    recognize that the Congress is Article 1 of the Constitution--the
    President proposes and Congress disposes. But it is also important
    that, as the Committee considers potential changes, it recognizes that
    this budget has been crafted to balance a number of risks. And with
    every change, that balance of risks is affected.
        This is not to suggest that the budget before you is perfect--no
    one has a monopoly on wisdom. And there are numerous examples of
    instances when Congress pressed the executive branch to invest in
    programs--such as JSTARS and UAVs--that later proved critical. What I
    am suggesting is that if changes are made, they be made in a coherent
    way--that we talk them through, and that the decisions be made with a
    full understanding of the effects they may have--not only on the
    program in question, but the costs in terms of the investments in other
    areas that will be put off as a result.
        We have done our best to develop this budget with what we believe
    has been unprecedented transparency--providing detailed briefings to
    those interested in defense here on Capitol Hill. Congress was not
    simply presented with the President's budget--it was kept in the loop
    as decisions were being made. I am told that the extent of consultation
    from the Defense Department to the Congress this year has been
    unprecedented. We hope that this spirit of openness and cooperation
    will continue as Congress deliberates--so that the final budget is
    crafted in a way that preserves the balance of risks.
        Our hope is that, with this budget, we can further transform not
    only our military capabilities, but also the relationship between the
    Defense Department and the Congress--by establishing a new spirit of
    trust and cooperation.

                                    RESULTS

        As a result of these strategic investments and decisions, we can
    now see the effects of transforming begin to unfold. Consider just some
    of the changes that are taking place:
      --Today, the missile defense research, development and testing
            program has been revitalized and we are on track for limited
            land/sea deployment in 2004-05.
      --Today, the Space Based Radar, which will help provide near-
            persistent 24/7/365 coverage of the globe, is scheduled to be
            ready in 2012.
      --In this budget, we believe SBIRS-High is properly funded.
      --Today, we are converting 4 Trident SSBN subs into conventional
            SSGNs, capable of delivering special forces and cruise missiles
            to denied areas.
      --Today, we are proposing to build the CVN-21 aircraft carrier in
            2007, which will include many new capabilities that were
            previously scheduled to be introduced only in 2011.
      --Today, instead of 1 UCAV program in development, the X-45, which
            was designed for a limited mission of suppression of enemy air
            defense, we have set up competition among a number of programs
            that should produce UCAVs able to conduct a broad range of
            missions.
      --Today, we are revitalizing the B-1 fleet by reducing its size and
            using savings to modernize remaining aircraft with precision
            weapons, self-protection systems, and reliability upgrades--and
            thanks to these efforts, we are told the B-1 now has the
            highest mission capable rates in the history of the program.
      --Today, in place of the Crusader, the Army is building a new family
            of precision artillery--including precision munitions and Non-
            Line-of-Sight Cannon for the Future Combat Systems.
      --Today, we have seen targeted pay raises and other reforms help
            retain mid-career officers and NCOs, so that fewer of them
            leave the service while still in their prime, so the country
            can continue to benefit from their talent and experience.
        These are positive changes that will ensure that our country will
    have the capabilities needed to defend our people, as well as a menu of
    choices from which we can select to shape the direction of the
    Department, as the 21st century security environment continues to
    change and evolve.

                           DEFENSE TRANSFORMATION ACT

        Finally, Mr. Chairman, we can't truly transform, unless we have the
    ability to better manage this Department. To win the global war on
    terror, our forces need to be flexible, light and agile--so they can
    respond quickly to sudden changes. The same is true of the men and
    women who support them in the Department of Defense. They also need
    flexibility--so they can move money, shift people, and design and buy
    new weapons more rapidly, and respond to the continuing changes in our
    security environment.
        Today, we do not have that kind of agility. In an age when
    terrorists move information at the speed of an email, money at the
    speed of a wire transfer, and people at the speed of a commercial
    jetliner, the Defense Department is bogged down in the bureaucratic
    processes of the industrial age--not the information age.
        Some of our difficulties are self-imposed by the Department, to be
    sure. Others, however, are the result of law and regulation. Together
    they have created a culture that too often stifles innovation. Consider
    just a few of the obstacles we face each day:
      --This department spends an average of $42 million an hour, and yet
            we are not allowed to move $15 million from one account to
            another without getting permission from four to six committees,
            a process that sometimes takes months.
      --Instead of being streamlined for the fast-paced 21st century, the
            defense authorization bill has grown with each passing year.
            Just consider the changes over my brief career:
        --When I was first elected to Congress in 1962, the defense
                authorization bill was one page.
        --The last time I was Secretary of Defense, a quarter of a century
                ago, the 1977 authorization bill had grown to 16 pages.
        --When I came back to the Pentagon for this second tour, the 2001
                authorization bill had grown to 534 pages.
        --I can't even imagine what it will look like in another 25 years.
      --Today we have some 320,000 uniformed people doing what are
            essentially non-military jobs. And yet we are calling up
            Reserves to help deal with the global war on terror. The
            inability to put civilians in hundreds of thousands of jobs
            that do not need to be performed by men and women in uniform
            puts unnecessary strain on our uniformed personnel and added
            cost to the taxpayers. This has to be fixed.
      --The department is required to prepare and submit some 26,000 pages
            of justification, and over 800 required reports to Congress
            each year--many of marginal value, I am sure many not read,
            consuming hundreds of thousands of man hours to develop, and
            untold number of trees destroyed.
      --Despite 128 acquisition reform studies, we have a system in the
            Defense Department that since 1975 has doubled the time it
            takes to produce a new weapons system, in an era when new
            technologies are arriving in years and months, not decades.
        The point is this: we are fighting the first wars of the 21st
    century with a Defense Department that was fashioned to meet the
    challenges of the mid-20th century. We have an industrial age
    organization, yet we are living in an information age world, where new
    threats emerge suddenly, often without warning, to surprise us. We
    cannot afford not to change and rapidly, if we hope to live
    successfully in this new world.
        The Department is already engaged in substantial transformation. We
    have reduced management and headquarters staffs by 11 percent. We have
    streamlined the acquisition process by eliminating hundreds of pages of
    unnecessary rules and self-imposed red tape. And we have begun
    implementing a new business management structure. These internal
    changes are important--but they are not enough. We also need
    legislative relief.
        Our legislative proposal, the Defense Transformation Act for the
    21st Century, would give the Department some of the needed flexibility,
    and ability to more rapidly move resources, shift people and bring new
    weapons systems on line more quickly, so we can adapt to changing
    events.
        Among the provisions in this legislation:
      --We have proposed more flexible rules for the flow of money through
            the Department to give us the ability to respond to urgent
            needs as they emerge.
      --We have proposed elimination of some of the more onerous
            regulations that make it difficult or virtually impossible for
            many small businesses to do business with the Department of
            Defense.
      --We have proposed expanded authority for competitive outsourcing so
            that we can get military personnel out of non-military tasks
            and back into the field.
      --We have proposed measures that would protect our military training
            ranges so that our men and women will be able to continue to
            train as they fight while honoring our steadfast commitment to
            protecting the environment.
      --We have proposed measures for transforming our system of personnel
            management, so that we can gain more flexibility and agility in
            how we manage the more than 700,000 civilians who provide the
            Department such vital support. We need a performance-based
            promotion system for our civilian workforce that rewards
            excellence--just like the one Congress insisted on for our men
            and women in uniform.
        In other U.S. government agencies, major portions of the national
    workforce have already been freed from archaic rules and regulations.
    We need similar relief. If the Department of Defense is to prepare for
    the security challenges of 21st century, we must transform not just our
    defense strategies, our military capabilities, and the way we deter and
    defend, but also the way we conduct our daily business.
        Transformation is not an event--it is a process. There is no point
    at which the Defense Department will move from being ``untransformed''
    to ``transformed.'' Our goal is to set in motion a process and a
    culture that will keep the United States several steps ahead of
    potential adversaries.
        To do that we need not only resources, but equally, we need the
    flexibility to use them with speed and agility, so we can respond
    quickly to the new threats we will face as this century unfolds.
        Thank you Mr. Chairman. I'd be happy to respond to questions.

        General Pace. Sir, I do not have a statement, but I would
    be remiss, Mr. Chairman, if I did not point out that the
    incredible performance of your armed forces in battle in Iraq
    is directly attributable to the Goldwater-Nichols Act and the
    sustained bipartisan support of the Congress. We deeply
    appreciate that, sir.
        If I may have the temerity to ask to put into the record
    that our thoughts and prayers are with the families of all
    those who lost their loved ones in this battle, sir. Thank you.
        Senator Stevens. Dr. Zakheim, do you have a comment?
        Dr. Zakheim. No, I don't. I am ready to take questions as
    they come in.
        Senator Stevens. Mr. Secretary, many of the things you
    addressed are really pending before the Armed Services
    Committee. I hope we will address questions before this
    committee that pertain to the budget that has been presented,
    and I would ask Senators to limit themselves to 7 minutes in
    the first round to see how well we can do. We may not get
    through them all in the time that is allotted to us today.
        Mr. Secretary, much of what you said is correct and I think
    we all stand in awe of this generation and what they have done.
    I have often compared this generation to the generation that
    Senator Inouye and I and Senator Hollings were part of, that
    some people call ``the greatest generation.'' But most of our
    people were draftees. The people you have dealt with now are
    volunteers, people that place themselves in harm's way on the
    basis of their own decisions, and I think they are the finest
    military force the world has ever seen.

                VISITING TROOPS IN THE FIELD AND TANKER LEASING

        We are all proud of them, very proud of them, and want to
    do everything we can to assist you to see to it that we
    maintain that force as we go out into the future. Having said
    that, though, I do express again our sadness that we are not
    able to go visit the war zone. We have done that on every
    occasion. I remember when Senator Bellmon and I went into
    Vietnam two or three times. We were under attack and bombed and
    shelled and everything else. We never asked for special
    protection. But in this instance we have been denied so far the
    opportunity to see Iraq.
        I hope that those restrictions will be lifted in the near
    future. I do not ask for any commitment; just I do express that
    hope.
        One of the things that continues to bother me as a former
    cargo plane pilot is the status of the tankers. They now
    average more than 45 years in age. At least one third of them
    are in the depots for repair. It was suggested to me the other
    day that I should ask you and Mitch Daniels to join some of us
    here and go out to Tinker and take a look at those planes that
    we are trying to repair. Even after we put them through a year
    of repair, they are still unfit for service. They still have
    rust and every kind of deterioration in terms of their
    structural capability, and yet we are insisting on putting them
    back out and putting money into them to try and make them fly
    some more, when they average 44 years of age.
        Now, Mr. Secretary, we provided several times now for the
    funds to start a tanker leasing program. I know--I hope that
    you are going to be able to tell us what is going to happen to
    that program now.
        Secretary Rumsfeld. Mr. Chairman, first let me say that I
    believe it is very important that members of the House and the
    Senate who are on relevant committees and interested have
    opportunities to visit the men and women in uniform and to
    observe first-hand and fulfil their responsibilities, their
    oversight responsibilities.
        I have talked to General Franks about this. We have worked
    out what we believe is an appropriate arrangement with the
    Speaker of the House and with the leadership in the Senate and
    there certainly will be an opportunity for you and your
    associates to be able to go to Iraq and Afghanistan in the
    period ahead.
        Second, with respect to the tanker issue, everything you
    have said, sir, is clearly correct. The tanker fleet is old. It
    has to be replaced. It will be replaced. The lease-buy issue is
    one that the Department has been wrestling with for some time
    and I regret to say still is. We are plowing new ground here.
    It is not something that the Department has done in the past to
    any great extent. It certainly will be precedent-setting.
        I felt it required appropriately a look by an outside
    entity and asked one to make a study of it. That report is
    back. The sheer size of this leasing proposal that was pending
    is something like 125 pages, with 80 different clauses, and it
    is not something that can be done quickly or easily, nor is it
    something that should take as much time as it has taken.
        You are right about the corrosion, you are right about the
    need for replacement, and certainly the Department will be
    pressing for a conclusion with respect to it. One of the things
    that is taking place, I am told, at the present time by those
    folks working on it--and you may want to comment, Dov--is they
    are still trying to negotiate a better price, and there is some
    active debate about what the appropriate price ought to be.
        Senator Stevens. Well, Mr. Secretary, I only have 5
    minutes. I can only say this: We suggested that leasing
    proposition when we came back from Afghanistan after talking to
    tanker pilots who expressed to us their fear of flying those
    planes. That is almost 2\1/2\ years ago, I think. That is 2
    years ago, at least.
        I think we ought to put some of the people who are holding
    this up in those tankers and let them fly a little bit and see
    them and listen to them clank, creak. This delay is
    unconscionable as far as I am concerned. I hope we can find
    some way.
        Again, I urge you, I ask you. We will get one of your
    planes and fly down there next week and just take the people
    from the Office of Management and Budget (OMB) that are holding
    this up and let them see those planes, because if they see them
    and understand the concept of really metal fatigue and the
    whole concept of rust and what that means to these people that
    are flying them, the idea of putting money into them so they
    can go out there and fly again for another 20 years is just
    absurd.

                    SUFFICIENT FUNDING FOR FISCAL YEAR 2003

        I have got one other question to ask and I would like to
    get down to the money if I can. I want to ask particularly
    because of the problems we face now. We passed the Iraq
    supplemental in record time; and that was based mostly on cost
    models and upon operational assumptions. I would like to know,
    do you have enough money to finish this year, fiscal year 2003?
    Are we going to be able to see through the remainder of
    operations in Afghanistan and Iraq with the money we have
    provided you?
        Secretary Rumsfeld. I guess it is now May 14th. The fiscal
    year ends October 1st. We still have a number of months in
    fiscal year 2003. I can say that I have not seen anything at
    the moment that persuades me that we will necessarily have to
    come back for an additional supplemental in 2003. Is that----
        Dr. Zakheim. That is right. As things now stand, it
    actually looks that the target which we submitted and that the
    Congress gave us is pretty accurate. We are reviewing the
    spending rates very carefully. We have 4\1/2\ months to go in
    this fiscal year. We have already released over $30 billion out
    of the supplemental, with more to come. But it is looking like
    we are pretty much on target, sir.
        Senator Stevens. Thank you very much.
        Senator Inouye.

                     PASSAGE OF DEFENSE TRANSFORMATION ACT

        Senator Inouye. Mr. Secretary, the Defense Transformation
    Act that you discussed in the closing moments is before the
    Senate authorizing committee. I gather that the chances of
    passage do not look so well.
        Secretary Rumsfeld. I cannot hear you very well, sir.
        Senator Inouye. If the details of that legislation are not
    incorporated in the defense authorization bill, how would it
    affect your program?
        Secretary Rumsfeld. Let me make a couple of comments and
    then have Dov make a couple of comments. One, I am told that we
    have 300,000, 320,000 to be precise, men and women in uniform
    doing jobs that are not jobs for men and women in uniform. They
    are jobs that should be done by civilians. They are jobs that
    should be done by contractors.
        And we are doing that because people are rational. We have
    got three choices in the Department. We can either use someone
    in uniform, who you can manage; or you can use a contractor,
    who you can manage; or you can use the civil service, which is
    very, very difficult to manage. So people do the logical thing.
    They go and put a military person into a job that is not a
    military job.
        Well, we are worried about the OPTEMPO. We are worried
    about the fact that we have had to call up Guard and Reserve.
    We are worried about the fact that we have had to have stop-
    losses and we would prefer to have fewer stop-losses and fewer
    Guard and Reserve activated and have them activated a fewer
    number of times and be more respectful of their lives.
        But with 320,000 military people doing civilian jobs, why?
    Simply because the rules are so difficult, they are so
    burdensome.
        A second example: We cannot hire people right out of
    school. It is almost impossible. Everyone else--a company can
    go over and go to a job fair at a college, they can walk in and
    offer someone a job. We cannot. It takes months to work through
    all the paperwork, all the civil service requirements.
        Now, we have had a bunch of experiments going on at China
    Lake and other places through authorities that Congress gave us
    and they have worked. They have done a good job. China Lake is
    one of them.
        In my view we need some flexibility to manage the
    Department and we are wasting taxpayers' dollars because of the
    absence of that flexibility in my view.

                                STRYKER BRIGADES

        Senator Inouye. Mr. Secretary, everyone agrees that our
    military must transform. The Army has taken the lead with the
    creation of the Stryker Brigades. This year the Army testified
    that it needs six brigades. Do you support this?
        Secretary Rumsfeld. We have supported it by putting in the
    budget the money for all six Stryker Brigades. As I recall, the
    decision that was made was to--the first three are already
    funded and in route. The next one has been funded and approved,
    as I understand it. Correct me, Dov, if I am wrong.
        Dr. Zakheim. That is right.
        Secretary Rumsfeld. And the next two will be subject to a
    discussion as to the Army coming back and discussing ways they
    think they might improve or strengthen the Stryker model for
    the fifth and sixth.
        Dr. Zakheim. I could add to that if I may. The first
    brigade is actually undergoing a Congressionally mandated
    evaluation at Fort Polk, Louisiana, for its operational
    effectiveness. The second one is being fielded. It is at Fort
    Lewis. The team is being fielded with the Stryker vehicles. The
    Army's plan will be presented in July, so it is coming
    relatively soon.
        Senator Inouye. I gather that advance drafts of that plan
    have been distributed and they seem to support the fifth and
    sixth brigades; is that correct?
        Dr. Zakheim. The funding for all of them is in the plan and
    it will be for the Secretary of Defense to decide when he looks
    at the Army's plan as to how and in what way the Stryker is
    being improved.

                                     LPD-17

        Senator Inouye. Mr. Secretary, if I still have time, the
    Navy's LPD-17 has had some problems, cost overruns and schedule
    slippage. What are your plans for this program?
        Secretary Rumsfeld. Do you have that?
        Dr. Zakheim. Yes, I do.
        Secretary Rumsfeld. Do you want to comment on it?
        Dr. Zakheim. Sure.
        As you know, we essentially are gapping, as it were, not
    funding an LPD-17 in fiscal year 2005. We will have two LPD-17s
    in fiscal year 2006. We believe that the shipbuilding
    industrial base can support the production gap.
        In addition, we are talking about a move from these sorts
    of ships to a new kind of maritime prepositioning ship, which
    is also in the outyears. We are going to evaluate how that
    transition will take place. So the line remains open, we are
    funding those ships, the LPD-17, but at the same time as part
    of our overall transformation we are looking at this new kind
    of prepositioning ship.
        Senator Inouye. What sort of ship is that?
        Dr. Zakheim. They are looking at designs right now. The
    concept is to incorporate some of the elements of the
    amphibious type LPD-17, which simply stands for ``Landing
    Platform Dock ship,'' but in addition to take account of the
    prepositioning needs that were demonstrated again in Iraqi
    Freedom as well as Enduring Freedom before it.
        Senator Inouye. Has this type of ship served its purpose
    and does it continue to do so?
        Dr. Zakheim. There is a sense on the part of the Marine
    Corps and the Navy that for future requirements you may need
    considerably more flexibility than the LPD-17 gives you. Again,
    by definition in funding one in 2004 and two more in 2006 you
    are committed to those ships for 30-odd years beyond. So it is
    not a question of those ships being useless or anything. The
    real issue is when you go past those do you want to have a
    further flexible capability than what they give you, and there
    seems to be a consensus that the answer is yes and they are
    looking at just how to design it.
        Secretary Rumsfeld. And the Navy Department and the Chief
    of Naval Operations and the Secretary of the Navy have been
    reviewing that as part of a broader look at the shipbuilding
    budgets generally.
        General Pace. And there is no backing off at all, sir, from
    the requirement to be able to project combat power from ship to
    shore. But as Admiral Clark and General Hagee and General Jones
    before General Hagee have looked at this, and in looking at the
    opportunities presented by the Joint Strike Fighter and the
    Osprey and the potential adding of a flight deck of some
    limited capability to the prepositioning ships, that opens up a
    whole new horizon and they want to make sure that the
    recommendations they give to the Secretary and the money that
    is spent is spent on the most capable ship in the future.
        Dr. Zakheim. Let me also add that we will continue to buy
    these ships through fiscal year 2010, which again is an
    indication that we are not giving up on a ship like this.
        Senator Stevens. We are running out of time.
        Dr. Zakheim. Sorry.
        Senator Stevens. Thank you, Mr. Secretary.
        Senator Burns.
        Senator Burns. Thank you, Mr. Chairman.
        I just have a question and maybe a thought, Mr. Secretary,
    this morning. As we have seen in the operation in Iraq, it was
    pretty evident that the technology and the training that we had
    done prior to that operation really paid off. I am told that
    your ability through communications, the ability of systems
    that were interoperable, that it gives the striking force a lot
    of flexibility even before the operation started and during the
    operation, that any mission could be changed.
        There is no doubt about it that it was a force--we had the
    most physically fit and I think mentally alert military this
    Nation has ever known and really people that understand
    technology and know how to use it. We are also seeing in this
    country as we train for the force that you visualize that will
    be our force of the future, we are also seeing our ability to
    train both in the air space and land-based facilities for our
    troops and our equipment, we see that being eroded due to
    encroachment, environmental laws, and a variety of other
    challenges that we have in front of us.
        I would wonder. You will be making the decisions of what
    kind of facilities and what we are going to need to train for
    the future and make that assessment, and then probably would
    start dealing with those challenges ahead. Can you tell us if
    there is a process in place now where you are making those
    determinations based on what we have experienced in the Middle
    East, and at such time as when Congress will be advised or
    assessed of what your needs will be in the future areas of
    training and new technologies?

                         TRAINING RANGES AND FACILITIES

        Secretary Rumsfeld. Senator, thank you. You are right that
    the armed forces of the United States are living in the world
    and they have training ranges and facilities, and as the
    world's rules and requirements change and evolve the
    restrictions grow and the ability to function is limited. We
    currently have proposals in the transformation legislation
    before the Congress that would provide some relief from some of
    the laws that are hampering defense training and that type of
    activity.
        For example, we have been delayed over 6 years in
    deployment of a surveillance towed array sensor system, low-
    frequency active sonar system, which is needed against ultra-
    quiet diesel submarines. It is part of the Marine Mammal Act.
    We proposed last year several adjustments. They tend not to
    really be directed at any of the laws that exist, but rather at
    the legal interpretations that have evolved over the decades
    since those laws were passed that we feel we need some freedom
    from.
        Do you want to comment, Pete, on this?
        General Pace. Sir, thank you.
        Senator, we want to be good stewards of the environment and
    we believe that we can do both, be good stewards of the
    environment and train. One of the provisions is for this
    National Training Center that will be both live fire
    environments, such as TwentyNine Palms and the National
    Training Center and Nellis Air Force Base, and the virtual
    environment, that you can pull together people from throughout
    the entire Nation without having to move anywhere to do a very,
    very robust exercise.
        We are looking at that, sir. We do have a process we are
    working through the Defense Department to highlight those
    things that are current constraints, but also to be able to
    project ways that we can protect the environment and train.
        Senator Burns. Well, General Pace, you know as well as
    anyone else that Camp Pendleton, parts of Camp Pendleton have
    come under fire, that we cannot train in that we used to use
    many years ago, or even in modern day, your training out there.
    That sort of concerns us.
        We look at air space use, especially in the southwestern
    part of the country, where you have a lot of commercial
    flights, where we see a restricting of air space both in the
    space and altitude in which we can train. And I an wondering if
    those assessments are not going on now, that we will be able to
    be sharp as we were in this 21 days in the Iraqi operation. If
    we cannot train and we cannot train under conditions like we
    are going to have to fight, then I worry about those kind of
    conditions.
        We can talk about equipment, we can talk about money and
    that, but if we cannot train our troops that is something that
    we have got to look at very seriously. I would also add that
    maybe my home State of Montana might have something to offer--
    strictly parochial.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you very much.
        Senator Byrd? Senator Hollings?
        Senator Hollings. Thank you very much, Mr. Chairman.
        Mr. Secretary, that is an outstanding statement and I
    congratulate you on bringing Defense into the new century. What
    happens--and the reason I take the committee's time here to ask
    about this little installation down in Charleston, back in 1992
    at the Base Realignment and Closure Commission there was one
    thing that both George Bush Senior and Clinton could agree on
    and that was we are not going to close the Portsmouth Navy
    Yard. I mean, we got the run-up there in that primary.
        So they closed Charleston, which had won all the NAVALEX
    and everything else. But at the time I debated and argued to
    have NAVALEX, that you would remember as the former Secretary
    back in the 1970s, and NAVALEX was combined into SPAWAR. They
    combined Pawtucket, Maryland, Nebraska Avenue where Secretary
    Ridge is right now on Nebraska Avenue, Norfolk, and Charleston.
        The reason for the question, of course, or comment is an
    admiral now has asked for a study to find about the cost of
    moving it. I hope we get that study, because the Secretary of
    the Navy has just completed a cost efficiency study by Booz-
    Allen-Hamilton of 15 navy engineering centers and they found
    that the SPAWAR facility down in Charleston was ranked number
    one in overall efficiency.
        We do not receive appropriated funds. What we do is we
    design, build, test, and support computer, command and control
    systems. There are a bunch of little small contractors, and
    since the big Navy yard was closed the rent is cheap. They love
    it down there and they have got room to move and expand, and
    they serve Army, Navy, Air, Marines, but they serve the White
    House, the Secret Service, the Federal Aviation Administration
    (FAA), and everything else. It is all contract. It has the
    joint use that Secretary Rumsfeld is insisting on.
        If you could come visit us down there, you will see it, and
    I think you can use that as an example of succeeding in this
    joint use effort.
        Otherwise, Mr. Secretary, with respect to rebuilding Iraq,
    do you look upon that as a military or a contract operation?

                                REBUILDING IRAQ

        Secretary Rumsfeld. Well, I think I would rather say what I
    think of it as, rather than either-or. First of all, I think it
    is ultimately a task for the Iraqi people. I do not think
    anyone can rebuild another country for a person. It is up to
    them to do that. They are going to have to invest their time
    and their energy and their funds in seeing that that country
    rebuilds after decades of leadership by a vicious despot who
    did not invest in the people, did not invest in the
    infrastructure. He was building palaces and building weapons
    and putting money in his own accounts outside the country.
        So it is going to take some time. It is probably, second,
    going to be a task for the international community to create--
    to help the Iraqi people do what needs to be done. It will take
    time.
        Third, I do not think it can be done unless the country is
    in a reasonably secure and permissive environment, and that is
    what we need to help with.
        Senator Hollings. That is the main point. It has got to
    start off military, because you must establish law and order.
    Even after law and order is established, I look upon it and
    remember the countries of Greece and Portugal coming into the
    Common Market and the others, Germany, Italy, and all, taxed
    themselves $5 billion over 5 years so they could develop the
    entities of free speech, free press, a respected judiciary,
    property ownership, and all those kind of things, but first
    thing was to establish law and order.
        Otherwise, if you begin with the people and the people
    themselves doing it, I agree with you generally, if you allow
    that you are going to end up with an Islamic democracy. It will
    be quite some time before we get one man, one vote in downtown
    Baghdad, and the military is going to have to establish order.
    I had this experience with all of the demonstrations and
    everything else: Salus populi suprema lex, the safety of the
    people is the supreme law.
        When you have got all kind of entities demonstrating,
    looting, stealing, and everything else of that kind, you have
    got to establish the safety of the people.
        Secretary Rumsfeld. You are absolutely right. Unless it is
    a reasonably secure environment, nothing else happens.
        Senator Hollings. Right.
        Secretary Rumsfeld. It just does not work.
        Senator Hollings. Thank you, Mr. Chairman.
        Senator Stevens. Yes, sir, thank you very much.
        Senator Shelby.

                             IMPROVING INTELLIGENCE

        Senator Shelby. Thank you, Mr. Chairman.
        Secretary Rumsfeld, I want to first talk a little about
    intelligence community cooperation, DOD with the intelligence
    community. Could you give us a little analysis of how far the
    Department, that is the Department of Defense, has come since
    September 11th in improving your own intelligence capabilities
    and cooperating with other intelligence agencies, and what this
    budget would do to continue that work?
        Secretary Rumsfeld. Well, let me answer the second part
    first, the cooperation. I suppose nothing is ever perfect in
    life. We are all human beings and we are not perfect. On the
    other hand, having been in and around government for a lot of
    decades, I honestly believe that the linkages between the
    Director of Central Intelligence and Central Intelligence
    Agency and the intelligence agencies that reside in the
    Department of Defense and the combatant commanders is I would
    say better than ever in my knowledge.
        It is--I meet with George Tenet probably several times a
    week, but we have lunch once a week, and we have been able to
    knit it together at the top. General Franks was able to do that
    in the region and is currently doing it in Iraq. It is almost
    not quite seamless between the two.
        Senator Shelby. It is better than it has been, is it not?
        Secretary Rumsfeld. Absolutely, absolutely.
        Senator Shelby. Thank you.
        Secretary Rumsfeld. And we work hard at it, and I think it
    is much better.
        How much progress are we making generally in the
    intelligence community? That is a tougher question. I think
    time will tell. We are doing some big things. As we rewrite war
    plans and contingency plans and think of them in the 21st
    century with the changed circumstances, there are things that
    can be done in intelligence that will inform those plans and
    enable us to do things differently.
        If we have in one case, for example for the sake of
    argument, 2 weeks warning instead of 2 days' warning, or 2
    months' warning instead of 2 weeks' warning, it can affect how
    we arrange ourselves. We are into that, but we have not
    completed it. We are working hard at it.
        Senator Shelby. But the intelligence initiative we are
    talking about, that is central to what you plan to do and how
    you do it, is it not?
        Secretary Rumsfeld. Absolutely.

                              DOD-NASA PARTNERSHIP

        Senator Shelby. The National Aerospace Initiative. Mr.
    Secretary, you have been outspoken on the importance of space
    to military operations and in your support of the National
    Aerospace Initiative. While the Air Force is partnering with
    the National Aeronautics and Space Administration (NASA) on
    various technology development initiatives that support both
    their shared and unique mission objectives, I think we can and
    should do much more to support the National Aerospace
    Initiative.
        Would you elaborate if you could on DOD's partnership with
    NASA in this regard? Do you see it growing or not growing?
        Secretary Rumsfeld. I do not know, to be very direct. The
    Department has had multiple linkages with NASA dating back to
    the time when I was on the Space Committee in the Congress in
    the 1960s, and they have shifted as the focus of our space
    efforts shift. They each have a distinctive role, the civilian
    side and the military side.
        But we have over the decades, the Department has benefited
    by the relationship and certainly NASA has benefited by the
    relationship. How it will evolve in the future I think really I
    am just not in a position to say.
        Senator Shelby. Would you talk briefly, if you would, about
    using space superiority to fight smarter and what space-based
    radar will add to the Department's war-fighting capability? How
    important is space to all of this? I would say very important,
    but I would like to hear you.
        Secretary Rumsfeld. Indeed it is.
        Dov just reminds me here that this budget does provide $118
    million for the National Aerospace Initiative to continue the
    development of the integrated approach.
        In the information age, space plays a critical role and it
    will increase, not decrease, over time. The need for
    information and the leverage it provides and the force
    multiplier it provides through improved situational awareness
    and through the ability to interconnect the different services
    and indeed different countries' services into combined joint
    efforts, space plays a critical linking role there. So you are
    absolutely correct.
        Dr. Zakheim. Sir, as you know, some of our sensors are
    affected by weather. To answer your question about space-based
    radar, that would give us 24-hour-a-day, 7-day-a-week
    capability to see what we want, when we want.
        Senator Shelby. Very important, is it not?
        Dr. Zakheim. Yes, sir.

                               UNMANNED VEHICLES

        Senator Shelby. Secretary Rumsfeld, lastly, the Predator
    and the Hellfire missile. A lot of us view that as a real
    achievement, you know, integrating the Hellfire missile onto
    the Predator unmanned aerial vehicle. Do you see that growing
    in the future, unmanned vehicles, weaponizing them and so
    forth?
        Secretary Rumsfeld. I do. I think that the things that
    unmanned aerial vehicles--indeed, I would go so far as to say
    unmanned vehicles; they may be aerial, they may be surface,
    they may be subsurface, they may be a variety of things--we
    will see evolving over the decades ahead in ways that we
    probably do not even imagine today.
        We have been significantly advantaged in the past 2\1/2\
    years by the availability of unmanned aerial vehicles.
        Senator Shelby. And a lot of that was put together very
    quickly with the help of our organic labs, was it not?
        Secretary Rumsfeld. It was, and indeed, as I mentioned in
    my opening statement, with some prodding from the Congress.
        Senator Shelby. Yes, sir.
        Mr. Chairman, thank you. Thank you, Mr. Secretary.
        Senator Stevens. Senator Hollings--no, Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman.
        Thank you, Mr. Secretary, and thank you, General Pace and
    Dr. Zakheim. I note in yesterday's Washington Post the
    following headline: ``Baghdad Anarchy Spurs Call for Help.'' I
    read excerpts therefrom: ``Baghdad residents and U.S. officials
    said today that the U.S. occupation forces are insufficient to
    maintain order in the Iraqi capital and called for
    reinforcements to calm a wave of violence that has unfurled
    over the city, undermining relief and reconstruction efforts
    and inspiring anxiety about the future.''
        [The information follows:]

                    [From the Washington Post, May 13, 2003]

     Baghdad Anarchy Spurs Call For Help; Iraqis, U.S. Officials Want More
                                     Troops

                  (Peter Slevin, Washington Post Staff Writer)

        Baghdad residents and U.S. officials said today that U.S.
    occupation forces are insufficient to maintain order in the
    Iraqi capital and called for reinforcements to calm a wave of
    violence that has unfurled over the city, undermining relief
    and reconstruction efforts and inspiring anxiety about the
    future.
        Reports of carjackings, assaults and forced evictions grew
    today, adding to an impression that recent improvements in
    security were evaporating. Fires burned anew in several Iraqi
    government buildings and looting resumed at one of former
    president Saddam Hussein's palaces. The sound of gunfire
    rattled during the night; many residents said they were keeping
    their children home from school during the day. Even traffic
    was affected, as drivers ignored rules in the absence of Iraqi
    police, only to crash and cause tie-ups.
        The calls for more U.S. troops to police the city coincided
    with the arrival of L. Paul Bremer III, the Bush
    administration's new civilian administrator assigned to run the
    Pentagon's Office of Reconstruction and Humanitarian
    Assistance. The U.S. occupation authority, which had previously
    been headed by retired Army Lt. Gen. Jay M. Garner, has
    struggled to restore Iraqi institutions since Hussein's
    government collapsed April 9 in the face of a U.S. military
    invasion.
        Bremer, who met with senior staff members tonight inside
    the 258-room Republican Palace, pledged that he and Garner
    would work together for an ``efficient and well-organized''
    transfer of power, with Garner assisting him for an
    undetermined period. He described his own work as a ``wonderful
    challenge'' and said the U.S. task is to ``help the Iraqi
    people regain control of their own destiny.''
        But the British foreign secretary, Jack Straw, expressed
    disappointment with efforts so far to bring democracy to Iraq.
    He told the British Parliament that ``results in the early
    weeks have not been as good as we would have hoped.'' Straw
    also said the lack of security in Baghdad has been
    disappointing.
        An office and warehouse belonging to the aid group CARE
    were attacked Sunday night. In two other weekend incidents, two
    CARE vehicles were seized by armed men, the organization
    reported today, asking the U.S. occupation forces to ``take
    immediate steps to restore law and order to Baghdad.''
        ``The violence is escalating,'' said Anne Morris, a senior
    CARE staff member. ``We have restricted staff movement for
    their own safety. What does it say about the situation when
    criminals can move freely about the city and humanitarian aid
    workers cannot?''
        Baghdad residents have been increasingly preoccupied by
    violence and the uncertainty it has produced, slowing relief
    and rebuilding efforts. One U.S. reconstruction official said
    tonight, for example, that as the Americans seek to distribute
    salaries and pensions, 20 bank branches have been unable to
    open without U.S. protection in the absence of a credible Iraqi
    police force.
        ``Security is the biggest problem we have,'' the official
    said. ``The banks don't feel comfortable opening, and I agree
    with that.''
        Another official said foreign companies have showed
    interest in installing a badly needed cell phone network, but
    remain unwilling to do so without a safe environment for
    workers. The security threat has also limited the ability of
    reconstruction workers to move through the city and interact
    with Iraqis. Civilian staff members still have instructions to
    wear body armor and helmets and travel with military escorts.
        Food warehouses, hospitals and government offices have
    reported security problems, with administrators pleading with
    U.S. forces to do more. A senior staff member with the U.S.
    reconstruction office said the responsibility for stabilizing
    the situation lies with the U.S. military, which President Bush
    assigned to run postwar Iraq. Any order to increase manpower
    would have to come from Washington.
        ``Any time you have a security vacuum,'' the official said,
    ``the only people who are going to be able to fill it are the
    military.''
        U.S. commanders have described Baghdad's security as their
    top priority and have assigned several thousand troops to guard
    200 sites and patrol neighborhoods. But they have also said
    they do not have enough troops to police the sprawling city or
    guard every facility that could be targeted by looters.
        Lt. Gen. David D. McKiernan, commander of ground troops in
    Iraq, said the roughly 150,000 soldiers under his command are
    focusing on many assignments simultaneously, including hunting
    for weapons of mass destruction and Iraq's missing leaders
    while also imposing order on a country the size of California.
        ``Imagine spreading 150,000 soldiers in the state of
    California and then ask yourself could you secure all of
    California all the time with 150,000 soldiers,'' McKiernan told
    reporters last week. ``The answer is no. So we're focused on
    certain areas, on certain transportation networks we need to
    make sure are open.''
        The Pentagon announced early this month that an additional
    4,000 soldiers were being dispatched to Baghdad, bringing the
    total in the city to 16,000. The composition of the force will
    shift as combat units head home and the number of military
    police officers grows from 2,000 to about 4,000 by mid-June.
        McKiernan emphasized the importance of Iraqis taking charge
    of their city. So far, perhaps half the city's police force has
    showed up for vetting and training. But relatively few have
    returned to active work. All 60 of the city's police stations
    were looted--five main buildings are occupied by families of
    squatters.
        There is no working communications system, and only a small
    number of police cars were not ruined by looters during the
    postwar rampage. Police officers, prohibited by U.S. forces
    from carrying anything other than a sidearm, are wary of
    confronting antagonists who can outgun them. The overall
    situation is further complicated by a disabled court system and
    a lack of functioning jails.
        Carjackings have become particularly frequent. A furniture
    salesman, Abdulsalam Hussein, said he watched through the
    picture window of his store as gunmen chased down a Peugeot
    sedan on a busy square, ordered the occupants into the street
    and sped away. ``They had weapons,'' he said. ``No one could do
    anything to help.''
        On Rashid Street today, a U.S. Army patrol endured a busy
    day in the section of the city soldiers call Looterville. After
    chasing down two looters inside a telecommunications building,
    set alight Sunday night, several soldiers from the 3rd Infantry
    Division returned to their Humvees with sweat running down
    their dusty faces in rivulets.
        ``I don't see it getting better. We can't be everywhere,
    can we?'' said Pfc. Jacob Weber, 21. ``I feel like a cop, but
    I'm not a cop.''
        Across the Tigris River, another 3rd Infantry
    reconnaissance unit waded into a dispute over a shooting,
    seized an old pistol and warned the participants to settle
    their argument by calmer means. The troops headed wearily back
    to their base, only to stop within several hundred yards of it
    to investigate reports that gunmen were preventing people from
    putting out a fire near the gutted Culture Ministry.
        ``We're like cops in Baghdad now,'' said one officer in
    helmet and armored vest.
        ``Iraqi Vice,'' deadpanned Sgt. Corey Tondre.

        Senator Byrd. I was interested in your reference to the
    lessons that we need to have learned from the past and your
    comment that we need to apply the lessons from the experience
    in Iraq. It seems that we are learning the same lesson that
    Hannibal learned when he went through the entire length of
    Italy in 16 years. He learned that he needed an occupation
    force. He needed a force that could stabilize.
        He had the speed. He was a great general and I think he
    was--it was stated by Napoleon that Hannibal was the greatest
    general of antiquity. So he could level the cities, he could
    take the cities, but he could not hold them because he did not
    have the forces to occupy and to stabilize. As a result,
    although he had numerous victories throughout the 16 years that
    he was in Italy, he simply did not have the forces to keep the
    cities, and as a result city after city, such as Capua, went
    back over to the Romans after a while.
        It seems we are having that same problem in Iraq. The news
    reports out of Iraq are using words such as ``turmoil,''
    ``chaos,'' and even ``anarchy'' to describe the situation in
    Baghdad. At this point there is little evidence that the United
    States had in place any coherent plan for the reconstruction of
    Iraq following the end of combat.
        I fear that we may see a repeat of the situation in
    Afghanistan, where our forces worked hard to contain the chaos
    in Kabul, only to see the outlying cities fall back toward
    warlord control and turmoil.
        So I think we have other lessons to learn besides those
    that you have appropriately listed. We must learn from our
    mistakes and not be doomed to repeat them. Going into Baghdad,
    the military had the aim of overthrowing the existing
    government. Going into Baghdad, we were warned by U.N. agencies
    and nongovernmental organizations about the lack of water and
    the unsanitary situation in the city. We knew that medical
    supplies were scarce. We knew that military action would likely
    lead to mob action.
        I hope that the recent shakeup in the civilian leadership
    of the U.S. occupation authority will help the situation and
    will not amount to merely rearranging the deck chairs on the
    Titanic. But for the time being, it is the U.S. military that
    has the responsibility of maintaining order in Baghdad.
        What specific and immediate steps are you taking as
    Secretary of Defense to improve the security situation in
    Baghdad?

                               SITUATION IN IRAQ

        Secretary Rumsfeld. Senator, let me comment on a number of
    pieces of that. First of all, I think the characterization of
    ``anarchy'' is not accurate. It is a headline writer's phrase
    and it certainly grabs attention. But we were on the phone with
    the people there and the circumstance is something other than
    anarchy.
        You are quite right, you do not need to learn that lesson
    that it is important to stabilize. That lesson has been learned
    throughout history. And General Franks and his team had plans,
    have plans, and have put in place plans to provide for the
    security in that country. It is important to note several
    things.
        Number one, every jail in that country to my knowledge was
    emptied. So on the street are looters, hooligans, and bad
    people. They have to be rounded up and put back in. That takes
    a little time. You do not do that in 5 minutes. If we emptied
    every jail in the United States of America today, you would not
    in 50 days or 40 days or 30 days or however many days since
    that war has ended--what is it, 20? 20 days, I guess, 3 weeks--
    you would not be able to round up all those criminals and bad
    people and put them away again.
        There are also Baathists there. Not everyone was captured
    or killed. And they do not wish us well. They still are part of
    the old regime, and they have to be rounded up and identified.
        Next, we do have a good force there in the country. I
    forget what it is, but United States is probably 142,000, and
    coalition forces are probably another 20,000 plus. They have
    recruited and put back on the streets in that country I am
    going to guess close to 20,000 Iraqi police people. We have had
    donors conferences and force generation conferences in England
    and elsewhere to get coalition countries to come in and supply,
    provide additional forces.
        We have, if I am not mistaken, plus or minus 15,000
    additional U.S. forces that are due to arrive in Iraq over the
    next 7 to 20 days. The deployment of those forces and how they
    are actually utilized in Baghdad--and you asked, do we have a
    plan. The answer is yes. We were briefed on it again today and
    it is being implemented.
        My personal view is that the idea of chaos and turmoil and
    anarchy in the city is, as I say, an overstatement. We were
    told today that maybe two-thirds to three-quarters of the city
    is stable. Now, that is not permissive; it is stable. Another
    portion of it, particularly in the north, is less so, and most
    of the city at night the hooligans are out and the criminals,
    trying to loot and do things.
        We have had people shot, wounded, and killed in the last 48
    hours there in Baghdad. It is a problem. It is critically
    important, as Senator Hollings said, that the one thing that is
    central to success is security. We have a full court press on
    that. The forces there will be using muscle to see that the
    people who are trying to disrupt what is taking place in that
    city are stopped and either captured or killed.
        Senator Byrd. How many U.S. troops are currently in
    Baghdad? Do you expect to increase that number? And are there
    any other coalition forces currently in Baghdad?

                         FORCES LEVELS IN BAGHDAD AREA

        General Pace. Sir, if I may, the current number of
    coalition forces and U.S. troops in the greater Baghdad area is
    about 49,000. There are additional troops arriving as we speak.
    General Franks and his commanders are reviewing the situation
    on the ground to see how they might reset themselves in the
    city to be able to provide the kind of patrolling and presence
    that is necessary to provide the stability they need.
        Senator Byrd. Can you speak to the number, the increase in
    forces?
        General Pace. Sir, right now you have the First Armored
    Division is arriving as we speak and that is an additional
    20,000 troops who are arriving right now, sir.
        Senator Byrd. So that would bring it up to 69,000?
        General Pace. If General Franks and his commanders
    determine that that is where they should go, yes, sir.
        Secretary Rumsfeld. But it is up to the combatant commander
    to decide how he deploys those troops and he has not to my
    knowledge made a final judgment.
        General Pace. He has not, sir.

                                 MR. JAY GARNER

        And sir, we are out of time, but I would be wrong if I did
    not point out that Jay Garner is a great American doing a great
    job, and the term ``shakeup'' with regard to him and his
    administration and what he has been doing really does him a
    disservice. This new civilian going over has always been part
    of the plan. I should defer to the Secretary on this, but Jay
    Garner under the U.S. military command that he has been working
    under has done a fabulous job.
        Senator Byrd. My time is up. Let me ask one further
    question. What commitment has the United States received to
    date for peacekeeping forces from other nations?
        Secretary Rumsfeld. First let me just underline what
    General Pace said about General Garner. This is a first-rate
    individual. He has been working since late last year. He has
    done a spectacular job out there. He has put together a team of
    people and they are living in very difficult circumstances.
        He is not being replaced. From the very outset, it was
    clearly understood that at some point a senior civilian would
    be brought in, and Ambassador Bremer is that individual. They
    are working closely together and it is unfortunate when the
    implication is suggested that there is some sort of a shakeup
    because there is a problem. There is no shakeup. This has been
    part of the plan since the very outset.

                       COMMITMENTS OF PEACEKEEPING FORCES

        I cannot answer your question about how many foreign troops
    have agreed. There are I believe already something like eight
    or ten countries that have indicated their willingness to send
    troops. Some of them, it depends on their parliament approving
    it. Some of them, it may depend on having a United Nations (UN)
    connection of some sort, which is now being worked on in New
    York.
        But the talk was of--how many divisions, do you recall?
        Dr. Zakheim. Sir, two divisions initially, between now and
    the next several months.
        Senator Byrd. Would you please list those?
        Senator Stevens. Your time has expired. I am sorry,
    Senator.
        Senator Byrd. Yes, I understand.
        Would you please list those countries for the record?
        Secretary Rumsfeld. If they have publicly so stated, we
    will be happy to.
        [The information follows:]

        The following is a list of countries who have publicly provided
    significant contributions to coalition operations.
      international support and coalition contribution to operation iraqi
                           freedom and post-war iraq
        Countries supporting Coalition operations: 66.
        Troops in the Coalition: more than 40,000.
        Aircraft in the Coalition: 190, including ship-based helicopters.
        Ships in the Coalition: 58.
    Significant Coalition Ground Contributions
        Albania--Deployed an Infantry Company in Northern Iraq.
        Australia--Deployed Special Operations Forces (SOF).
        Bulgaria--Prepared to deploy a light Infantry unit.
        Czech Republic--Deployed a Nuclear, Biological, Chemical--
    Consequence Management (NBC-CM) unit to Kuwait.
        Republic of Korea--Deploying a Construction and Engineering Support
    Group to Iraq to conduct infrastructure reconstruction and repair.
        Italy--Prepared to deploy a Mechanized Infantry Brigade.
        Kuwait--Committed Peninsula Shield Forces for the defense of
    Kuwait.
        Lithuania--Deployed a cargo handling team to Kuwait.
        Netherlands--Deployed Patriot batteries to Turkey, to support NATO
    Article IV defense of Turkey during hostilities.
        Poland--Deployed a Coalition NBC-CM unit to Jordan; deployed Polish
    SOF; preparing to deploy a division and assume operational
    responsibility of one sector in Iraq.
        Romania--Deployed an NBC-CM unit to Kuwait, to respond to any Area
    of Responsibility-wide WMD event; maintains additional units on a
    Prepare to Deploy Order, to respond to component needs within the Iraqi
    Theater of Operations.
        Slovak Republic--Deployed an NBC-CM team to Kuwait, to support AOR-
    wide response to a WMD event.
        Ukraine--Deployed an NBC-CM Battalion to Kuwait, to support AOR-
    wide response to a WMD event.
        United Kingdom--Deployed Special Operations Forces; UK forces were
    directly responsible for coalition successes in Basrah and southern
    Iraq.
    Significant Coalition Air Contributions
        Australia--Provided 14 fighter aircraft, three helicopters, and two
    aircraft for airlift.
        United Kingdom--Provided 66 fighter aircraft, 14 tanker aircraft,
    41 helicopters, 10 reconnaissance aircraft, four AWACS aircraft and
    four aircraft for airlift.
    Significant Coalition Naval Contributions
        Australia--Deployed three ships (two frigates and one support ship)
    to conduct Maritime Interception Operations in the Persian Gulf
    enforcing U.N. sanctions against Iraq; deployed two P-3 aircraft to
    conduct Maritime Patrol mission in support of OIF.
        Denmark--Deployed one coastal submarine and one frigate in the
    North Arabian Gulf.
        Spain--Deployed one frigate and one support ship to the North
    Arabian Gulf to support their Landing Platform Vessel (LPD) with
    embarked medical unit.
        United Kingdom--Deployed the largest number of coalition vessels in
    support of OIF, with a maximum of 31 vessels. These forces included
    destroyers, frigates, aircraft carrier, helicopter carrier, supply
    ships, mine counter measure forces, and submarines.
    Significant Coalition Humanitarian Assistance/Medical Contributions
        Australia--Delivered two C-130 aircraft full of medical assets to
    Talill, Iraq.
        Czech Republic--Deployed 50-bed Level III Field Hospital to Basrah;
    deployed six water purification units to Iraq to areas with urgent
    potable water requirements. Czech forces will train local Iraqi
    personnel to operate these units, and leave the units in Iraq.
        Denmark--Deployed a three man surgical team to Jordan.
        Italy--Deploying a Level III field hospital, with associated
    security personnel (Carabinieri and Army), water, sanitation, and civil
    engineering specialists.
        Republic of Korea--Deployed a Medical Support Group, consisting of
    a Level II+ Field Hospital to An Nasiriyah. Hospital has 60 beds.
        Kuwait--Donated medical supplies to Umm Qasr; Kuwait flew the first
    non-U.S./Australian/British military aircraft into Baghdad
    International Airport, delivering a Field Hospital with 40 beds.
        Lithuania--Deployed four medical personnel with trauma and
    orthopedic surgery specialties to Umm Qasr, where they are integrated
    in the deployed Spanish Field Hospital.
        Spain--Deployed one medical facility (Level II+, 14 beds) embarked
    on an LPD and one deployable Field Hospital (Level II+, 40 beds) to
    North Arabian Gulf and Umm Qasr, respectively. To date, they have
    treated in excess of 1,800 non-enemy prisoner of war personnel and
    incorporated Lithuanian medical personnel in Spanish facility at Umm
    Qasr. A Marine platoon and engineer unit are supporting humanitarian
    reconstruction in the Umm Qasr and Basrah areas.

        Senator Stevens. Very well.
        Senator Cochran.
        Senator Cochran. Thank you, Mr. Chairman.

                    PERFORMANCE OF ARMY PATRIOT PAC-3 SYSTEM

        Mr. Secretary, the recent experience in Iraq indicated that
    the Army Patriot PAC-3 system successfully defended our forces
    against Iraqi missile attacks. My question is whether or not
    your assessment is consistent with the reports that were made
    available to us in the press that this system worked as it was
    intended and expected to work, and does the budget contain
    funds to continue to build systems like this and others that
    might protect our forces and our country against even longer-
    range missiles?
        Secretary Rumsfeld. The budget does have, as I note here,
    some $736 million for PAC-3, $561 million of which is for
    procurement and $174 million for research, development, test,
    and evaluation.
        My preliminary impression is identical to yours. I know
    that the lessons learned will be coming back with greater
    specificity, but from what you hear anecdotally there is no
    question but that the PAC-3 was effective. I should also add,
    however, that we do have to do a better job of deconflicting.
    You may recall that there were some incidents where PAC-3s
    actually intercepted U.S. aircraft and friendly aircraft. How
    that--what those lessons are and how we can improve that--it
    has always been true in every conflict that those things
    happen, but our goal obviously is to do it perfectly, and in
    that case we did not.
        Pete?
        General Pace. Yes, sir. United Kingdom (U.K.) aircraft,
    sir.
        Senator Cochran. General Pace, I understand that the Medium
    Extended Air Defense System (MEADS), may offer significant
    enhancements over the PAC-3, but because of funding constraints
    and other considerations it is not to be fielded until fiscal
    year 2012. Is this an accurate assessment of when we will see
    this system deployed and what is the outlook for deployment of
    other systems that build upon the PAC-3's successes?
        General Pace. Sir, there is about $280 million in this
    particular budget for the medium-range missile. I do not know
    the date. As you stated, I will have to take that for the
    record. But I can reinforce the fact that the PAC-3 system and,
    in fact, all the Patriot systems in Iraq and Kuwait were--first
    analysis is that every troop concentration was under an
    umbrella of a missile system and that no missile got into any
    of those umbrellas.
        [The information follows:]

        The current fielding schedule for the Medium Extended Air Defense
    System (MEADS) is First Unit Equipped in fiscal year 2012. However,
    recent Defense Acquisition Board (DAB) direction to combine the PATRIOT
    and MEADS programs should provide a significantly increased Theater Air
    and Missile Defense capability earlier than fiscal year 2012. The DAB
    decision to combine the two programs is based upon the successes of the
    PAC-3 missile as the primary interceptor and the desire to field the
    MEADS capability to the Services and Allies as rapidly as possible.

                                MISSILE DEFENSE

        Senator Cochran. Well, I want to congratulate you and the
    Secretary in the leadership that is being provided to ensure
    that we can continue to build upon those successes of missile
    defense. We know that Testbed Alaska is under construction now
    and the intent is to deploy a system that can defend against
    much longer range missiles in the future.
        Do you think the budget request for those longer range
    systems and the construction schedule is sufficient to meet our
    needs for defense capability for our homeland?
        Secretary Rumsfeld. Senator, I know you have been long
    active in this important area. With the end of the Anti-
    Ballistic Missile (ABM) Treaty and the ability for the first
    time to go out and actually test different ways of doing
    things, we were able to move into a period that has contributed
    to our knowledge and to the country's knowledge in these
    technologies. That is a good thing. It is a good thing from the
    standpoint of each possible alternative of boost and mid-range
    and terminal. It is a good thing from the standpoint of the
    system you mentioned for Alaska. It is also a good thing from
    the standpoint of sea-based systems.
        My feeling is that General Kadish has done a terrific job
    in that role in my view, has got a pretty good balance in his
    proposals as to where we ought to put our money to gain
    additional knowledge and, as you point out, to also develop
    this beginning of a capability to intercept relatively low
    numbers of Intercontinental Ballistic Missiles (ICBM's).

                     SHIP LEASING AND DEFINING REQUIREMENTS

        Senator Cochran. On another subject, I know that both the
    Navy and the Army have been experimenting with leased vessels
    to define the requirements of the Littoral Combat Ship in the
    case of the Navy and the Theater Support Vessel that the Army
    considers important for its purposes. I understand too the Army
    is considering leasing a lot more of these vessels. They are
    catamaran-type vessels, high-speed vessels.
        We have shipbuilding firms on the Mississippi Gulf Coast
    that are very capable of building cost-effective ships for our
    military and I wonder whether you will look at this leasing
    plan and see whether or not it might be more appropriate to
    build these ships rather than to lease foreign vessels for
    experimentation and analysis.
        Secretary Rumsfeld. Let me have Dov answer that.
        Dr. Zakheim. One of the reasons, Senator, that these leases
    are being looked at is because they are still trying to define
    exactly what kind of platforms they have in mind. The Littoral
    Combat Ship is a good example. I know down in Mississippi you
    have a tremendous composite facility which has come up with a
    completely new type of composite ship.
        The issue really is defining requirements, and until they
    have got them nailed down--and as you know, the Navy has been
    working on that for its part and the Army for theirs--in order
    to just get a sense of what requirements might be needed, they
    are leasing. I do not believe that that is the long-term
    intention.
        Senator Cochran. Thank you very much.
        Thanks, Mr. Chairman.
        Senator Stevens. Thank you, Senator.
        Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman.
        Interesting listening to this and interesting how much we
    have improved in the high tech area of our military. Mr.
    Secretary, you and I have talked before about such things as
    using drones and all, but I think we are in absolute agreement
    on the fact, especially for surveillance and everything else,
    it is a lot easier to stick something up there that, if it does
    get shot down, we have lost a drone, we have not lost a person.
    It can stay longer and you have more flexibility.
        We also--I know this committee funded an Advanced Data Link
    that allowed target information to go to our aircraft quickly.
    That was an initiative that I had worked on. This committee had
    funded it. I hear that, from pilots over there, that the
    Gateway made a real difference and I want to compliment those
    who used it.
        In Iraq we confirmed the total force concept. We had the
    Guard, the Reserves, the Active force fighting side by side.
    The commanders tell me they were an integral part of our
    military victory. I am concerned, however, that benefits for
    our reservists have not changed. For example, about 20 percent
    of reservists do not currently possess adequate health
    insurance. I am told this undermines readiness, undermines
    recruitment, and so on, retention.

                 TOTAL FORCE POLICY AND TRICARE FOR RESERVISTS

        Would you support legislation to make reservists eligible
    for Tricare on a cost-share basis?
        Secretary Rumsfeld. Senator----
        Senator Leahy. And I just say, I ask that--I am the Co-
    Chair of the Guard Caucus and it is a bipartisan group. We have
    a lot of members who are interested.
        Secretary Rumsfeld. I have discovered that I best not
    answer questions like that until I look at the numbers and
    costs and see what one has to give up to have something like
    that.
        Senator Leahy. Would you do that and submit it to me?
        Secretary Rumsfeld. We will be happy to take a look at it
    and see what the costs are. I would add this, that you are
    quite right, however; the total force concept works. It has
    worked in the conflict. It is working today. But one of the
    delays in calling people up was that, you are right, their
    teeth needed to be fixed and various other things that they had
    not paid attention to.
        It may very well be at some point that there would be some
    advantage in having certain elements of the Guard and Reserve
    more ready, that is to say having had their teeth checked and
    having had those kinds of physical checks so that there is not
    a delay and a big paperwork rush when you are trying to get
    people on active duty.
        Senator Leahy. I am also concerned about the health
    insurance because there is a long hiatus and they may be
    without it. I would be glad to work with your staff on this,
    but this is a growing concern. Those of us in the caucus from
    both parties are concerned about it. We hear from our home
    States and all.
        I think it is something, we are pushing for legislation on
    this. I think it is something that can be done that would
    ultimately be a very cost-effective thing. I realize this is
    not a question where you have the answers on the top of your
    head, but would you direct your staff to work with mine so we
    can share this information with the whole Guard Caucus?
        Secretary Rumsfeld. We would be happy to dig into it. Thank
    you.
        [The information follows:]

        The Department has over the past 2 years used existing legislative
    authority to ensure equality of benefits under TRICARE for the
    activated Reserve and active duty force and their families.
        TRICARE implemented its demonstration authority and provided
    immediate relief to activated Reserve family members by waiving the
    requirement that they obtain a non-availability statement from a
    Military Treatment Facility; by waiving the requirement that they meet
    their statutory deductible under TRICARE Standard; and by paying up to
    the legal liability limit to non-participating providers, thereby
    relieving them of the need to pay anything above their normal cost
    share.
        Recently, the Department changed its policy to allow the activated
    Reservist's family member residing in the catchment area of Military
    Treatment Facilities to be eligible for TRICARE Prime after the
    Reservist has been activated for 30 days, as opposed to the previous
    180 days.
        Congress last session provided the TRICARE Prime Remote for Active
    Duty Family Member (TPRADFM) benefit to reserve family members, but
    only if they ``reside with'' the reserve member. The Department is
    interpreting this language liberally to allow the family members to be
    eligible for TPRADFM as long as they reside with the Reservist at the
    time orders are received, rather than requiring the family to
    continuously reside with the member.
        The Department, however, does not support legislation that would
    make Reservists or their family members eligible for TRICARE when not
    on active duty. The GAO has estimated the cost of providing the TRICARE
    benefit for Reservists who are not on active duty at approximately $2
    billion per year.

                      WEAPONS OF MASS DESTRUCTION IN IRAQ

        Senator Leahy. Why haven't we found the WMD?
        Secretary Rumsfeld. Locating hidden WMD in a country the
    size of Iraq will be difficult and time consuming. Voluntary
    disclosure by Iraqi citizens will probably prove to be the best
    sources of evidence. Finding documents will aid in the search,
    however, and interviewing program personnel is critical for
    locating WMD.
        Senator Leahy. Secretary, were you surprised we have not
    found any weapons of mass destruction in Iraq yet?
        Secretary Rumsfeld. Not really. I have believed all along
    that the inspections, the U.N. inspectors, had very little
    prospects of finding anything by discovery. I have always
    believed that they would be--they or the people on the ground,
    in this case us, will have the best prospect of finding the
    weapons programs and documentation and the weapons themselves
    through people who have been involved in those programs and
    come up and tell us where to look.
        The government lived many lies, but one of the lies they
    lived for decades, at least better than a decade, was the
    ability to fool the inspectors. They actually arranged
    themselves so that they could live with the U.N. inspectors.
        Senator Leahy. No, I understand that, and I have read a
    number of the reports, as you have, reports we cannot go into
    in open session. But we are on the ground now. We have gone to
    a number of the areas, gone extensively into a number of the
    areas that we had felt and our military and our intelligence
    had felt would be areas of weapons of mass destruction and have
    not discovered anything.
        I wonder, if those weapons are there, why they--and if they
    were, they were not used against our troops. I am very thankful
    for that, as are you and General Pace and everybody else. But I
    wondered why, why they were not.
        I am also concerned, if they were there, especially in the
    areas that we had said that we wanted to look at and now have
    looked at, is there any possibility that they have seeped out
    and are now in the control of terrorists whose interests are
    inimical to us?
        Secretary Rumsfeld. I certainly would not say that
    something like that is not possible. With porous borders--and
    that country I suppose had borders pretty much like we do with
    Canada and Mexico. There are plenty of things that move back
    and forth across those borders in Iraq that----
        Senator Leahy. You probably do not want to go too, too far
    with comparing Iraq's and Syria's borders with ours with Canada
    and Mexico. We are a little bit friendlier with those two
    countries, I hope.
        Secretary Rumsfeld. My goodness, yes.
        Senator Leahy. I live only an hour's drive from Canada.
        Secretary Rumsfeld. We have wonderful people on both sides
    trying to maintain the border. But the fact is that things move
    across those borders, and they are moving clearly across the
    Iranian border, the Syrian border, into Iraq and out of Iraq. I
    do not think that I could say that, with certainty, that things
    were not moved out, either by the Government of Iraq or by
    others.
        Senator Leahy. But you do not have any indication that they
    had set up with the intent of using such weapons against our
    forces when we began to attack?
        Secretary Rumsfeld. There was--I am trying to think what I
    can say in an open session and I guess there is not much I can
    say in an open session.
        Senator Leahy. Well then, perhaps what you may want to do
    is submit in the normal classified fashion a response on that
    one.
        Secretary Rumsfeld. The fact is we do see intel chatter
    that suggests that things might have moved, but----
        Senator Leahy. I am talking about the fact of why they did
    not use it against us.
        Senator Stevens. Your time has expired.
        Senator Leahy. Mr. Chairman, could I request the staff so
    cleared for such information follow up on that last question in
    a classified portion? Thank you.
        [The information follows:]

        It is unclear why WMD was not used. The possibilities include, that
    the Iraqis were too busy moving the WMD for purposes of flight or
    hiding that they were unable to use it in combat, that no orders for
    WMD use came due to quick regime collapse, that Iraqi soldiers refused
    orders to use WMD, or that the Iraqis destroyed the WMD prior to
    coalition troops arrival.

        Senator Stevens. Senator Domenici.
        Senator Domenici. Mr. Secretary, I did not come to the
    hearing this morning as familiar with what happened to Hannibal
    and the Romans, but let me tell you I came here just as
    concerned as Senator Byrd about the stability or lack of
    stability in the daily lives of the people of that country, and
    I remain genuinely concerned that we are in a situation where
    we may have won the war and we lose the battle.
        So I cannot stress enough that we do whatever is necessary
    to bring law and order to that country and that we establish
    some kind of a plan quickly for the orderliness of that
    society. I understand that we were surprised by a number of
    things, such as the condition of their infrastructure. We
    assumed that it was better than it is. It is breaking down in
    places and at intervals that we had not expected, and that
    causes confusion, causes concern, and ultimately blaming
    Americans if things are not going right.
        In that regard, I wonder why your answers continue to be
    that this will be handled by the distinguished General who won
    the war. I wonder why it is his job to keep that situation
    going and why there is not some other kind of order that is
    going to be established quickly that is not under his direct
    command. If you might answer that for me in a moment, I would
    appreciate it.
        Secondly, it seems to me that it is absolutely imperative
    that the United States maintain order, regardless of how
    difficult it is, because without it there is a real chance that
    the people of that country will assume that the victory that we
    claim is not a victory at all. Could I have your comments on
    that quickly, and I have two other very brief questions.

                    U.S. COMMITMENT AND COMMAND ARRANGEMENTS

        Secretary Rumsfeld. Yes. First, the President has said
    publicly that the United States and coalition forces will put
    whatever number of forces are needed for as long as they are
    needed, and there is no disagreement about the importance of
    providing security.
        Second, the command arrangements are as follows. The
    combatant commander reports to me and I report to the
    President. He has the responsibility for security in that
    country. The humanitarian side of that and the non-security
    side, the non-military side, is now in the hands of the
    individual who has been mentioned previously, Ambassador Jerry
    Bremer, and he has under him all of those things other than
    security, and he reports to me and I report to the President.
        The infrastructure, as you properly point out, was badly
    degraded over the decades. The power situation, for example, in
    Baghdad is so fragile that getting it back working 100 percent
    of the city 100 percent of the time is not a simple matter, and
    it takes some time. For example, prior to the war only 60
    percent of Iraqis had reliable access to safe drinking water.
    Ten of Basras 21 potable water treatment facilities were not
    functional before the war.
        Now, as I said earlier, you empty all the jails and you put
    a bunch of hooligans out and you look at an infrastructure that
    was not working before the war, and then everyone says: Well,
    my goodness, it is chaos, it is turmoil; what is the matter
    with you? You have been there for 21 days and you have not
    solved all the problems.
        I think that they are doing a terrific job. They will
    continue to do a better job. The circumstances of the people in
    that country are better than they were before the war. They are
    going to get better every day. We are finding mass graves,
    thousands of human beings that were killed by that government.
    What should we do? Would you rather have a policeman here or
    someone down there guarding those graves? Would we rather have
    someone here?
        There are lots of priorities, and we cannot make a country
    that has been badly treated and abused and a people that have
    been badly treated and abused for decades, we cannot make it
    right, we cannot make it like the United States, in 5 minutes,
    and we know that. We have got wonderful people out there doing
    a darn good job and their circumstances are going to get better
    every single day.
        Senator Domenici. Mr. Secretary, I wholeheartedly agree
    with you and I am not arguing with you. I am merely suggesting
    for the public record that if there is one thing we are good at
    it is establishing order and establishing a way of putting
    things into a sense of order and developing construction
    techniques and construction formats that are credible and that
    people will believe and can see. And I merely urge that these
    happen quickly. I have not heard much about that. I assume that
    I will, and I thank you for your answer.
        The second question has to do with one that has bothered me
    in terms of informing the public of something we did that was
    rather spectacular. Our ability to target our weapons was a
    spectacular achievement. It is a combination of technology,
    much of which is secret, much of which we cannot divulge. But I
    have wondered whether or not it is possible that you could have
    a neutral group evaluate how we went about, what care we took,
    how much emphasis, energy, time, money, and resources we put
    into this episode, and have it as some kind of a feature to
    show the world what we have done.
        So far it is just something that we can see in terms of the
    effect. It would seem to me it would make an incredible story,
    put forth by credible writers, as to what we had to go through
    to get there. I can imagine the hours spent in trying to
    determine which target versus another target. I can imagine
    time spent looking at a building to see who occupied it and
    when so we would know whether or not to strike it or not
    because the occupants are innocent people. In fact, I happen to
    know those kinds of decisions were made.
        It seems to me that to get that out in a tabloid form where
    everybody could understand and see it would be a remarkable
    positive for American involvement in this particular war. I
    would like your comments and I thank you for your testimony.

                           CAREFUL TARGETING IN IRAQ

        Secretary Rumsfeld. Senator, you are certainly obviously
    very knowledgeable and exactly correct. The amount of--the
    hundreds of hours and the hundreds of people that were involved
    in looking at targets and making judgments about which targets
    would give the greatest advantage with the least potential for
    collateral damage; what time of day to strike a target where
    there would be the fewest innocent people in any area; what
    direction the weapon should be directed so that it would avoid
    civilian areas; what type of weapon to use; how to use that
    weapon; how to fuse it.
        All of those things were gone into with enormous care and
    detail. And you are right, it would be a story that would
    reflect very well on the United States and on the people
    involved.
        Senator Domenici. Would you mind taking a look at whether
    that could be done?
        Secretary Rumsfeld. I will certainly take a look at whether
    it could be done.
        Senator Domenici. I do not mean to burden you with all the
    other things you have, but it seems to me to be public
    relations, a very, very positive kind of thing.
        Thank you.
        Senator Stevens. The Senator's time has expired.
        Senator Domenici. Thank you, Mr. Chairman.
        Senator Stevens. Senator Feinstein.
        Senator Feinstein. Thank you very much, Mr. Chairman.

                        ROBUST NUCLEAR EARTH PENETRATOR

        Mr. Secretary, I wanted to take this discussion in a
    slightly different way and I wanted to talk about the Robust
    Nuclear Earth Penetrator. I read the nuclear posture review
    when it came out in 2002 and saw where, if that were put into
    actual public policy, there would be a substantial departure
    from where this Nation in the past was going with respect to
    nuclear weapons.
        Then as I looked at the doctrines of unilateralism and
    preemption and see the authorization that has been requested
    for $15 million to continue the study of the Robust Nuclear
    Earth Penetrator (RNEP), the likelihood is that that
    authorization will pass and that we will be faced with an
    appropriation of money as well.
        The way I see it, development of the RNEP represents a
    blurring of the line between conventional and nuclear weapons
    that may very well undermine our efforts to limit
    proliferation, and which may give nuclear armaments a role in
    this new United States doctrine of preemption. So I am
    obviously very concerned about it and wonder why, with the
    massive conventional weaponry that we have at our disposal,
    whether it be a daisycutter or a conventional bunkerbuster or
    the other things that we have, why is it necessary at this
    particularly tenuous point in time to begin a new effort with
    respect to nuclear weapons which can only in my view take us
    down a disastrous course?
        Secretary Rumsfeld. Senator, let me make a few comments on
    some of the things you said so that the record is very clear.
    You indicated that there is a proposal that you think is going
    to pass to develop a tactical nuclear weapon, I believe you
    said.
        Senator Feinstein. An authorization for $15 million for the
    Robust Nuclear Earth Penetrator.
        Secretary Rumsfeld. Right. And I think that is not
    accurate. I think that there is a proposal to fund a study, not
    the development, not the production, but a study. Let me tell
    you why. And you smile, but it is a serious matter that we do
    not have in the inventory the ability to deal with an
    underground, deeply buried target.
        We are looking and studying a variety of ways that that
    might be done, one of which is the one you are mentioning,
    which is a study, not the development, not the building, no
    major departure as you suggested.
        I would say this, that I do not think it would blur--
    studying the possibility of developing in several different
    ways, one of which is the one you mentioned, an ability to hit
    a target that is deeply buried is not going to in my view blur
    the distinction between conventional and nuclear weapons. You
    are right, if you study it someone might say, well, then you
    could build it some day. And that is true, you could, you could
    decide it. But that is a totally different issue and it is not
    part of what is before the Congress, as your statement
    suggested.
        Why do I not think that it would blur it? Nuclear weapons
    were used once, in 1945, and they have not been fired since in
    anger. That is an amazing record for human beings. Never in the
    history of mankind have there been weapons that powerful or
    anything approximating it, that distinctly different, that have
    not been used. They have not been used.
        Now, what does that mean? It means at least civilized
    countries, democracies, the ones that have those weapons thus
    far, and the few that are not democracies that have them, have
    made a conscious decision that there is a big difference in
    crossing that threshold. The United States has been at war in
    Korea, we have been at war in Vietnam, we have been in war lots
    of places since 1945, and they have never been used.
        No President is going to think that the line is blurred
    suddenly because of a study to see if we can develop an ability
    for a deep earth penetrator, in my view. Am I correct in----
        Senator Feinstein. May I ask you further on that?
        Secretary Rumsfeld. Sure.
        Senator Feinstein. According to the press reports, the
    nuclear posture review puts forward several scenarios in which
    the United States would consider a first use of nuclear
    weapons. I can mention them here if you wish. And when that
    comes out in 2002, although it was somewhat debunked by the
    administration, a year later we find that the studies are
    beginning to develop new tactical nuclear weapons.
        Yes, nuclear weapons were only used once before, but they
    were used by the United States, and now we have concern about
    India and Pakistan, we have serious concern about North Korea,
    and our efforts have been to limit the proliferation of nuclear
    weapons. To me, it is counterproductive to our overall purposes
    of limiting proliferation to begin studies that take us into
    the area of the possible use of tactical nuclear weapons.
        Would you comment?
        Secretary Rumsfeld. You bet. I have to again correct what
    you said. You say we now found out that the United States is
    beginning to develop tactical nuclear weapons.
        Senator Feinstein. No, I did not. I beg your pardon.
        Secretary Rumsfeld. Oh, I misunderstood, then.
        Senator Feinstein. No, no. I say we now find that a study.
    I mean, I accept your word. I have no reason not to accept your
    word that this is a study.
        Secretary Rumsfeld. My point is we have tactical nuclear
    weapons, theater nuclear weapons. We have had them for decades.
    They exist. We have lots of them. We have a fraction of those
    that----
        Senator Feinstein. Can we confine it to the Robust Nuclear
    Earth Penetrator.
        Secretary Rumsfeld. I did. I pointed out it is a study and
    it is not the development of a tactical nuclear weapon, as you
    suggested. It just is not. We have lots of studies and we
    should do studies. We have lots of war plans and contingency
    plans, and we should have those. We do not use them all.
    Obviously, the job of the Department of Defense is to be
    prepared to defend the American people, and that is what we do.
    We plan, we study things, we try to develop different kinds of
    capabilities from time to time.
        But any development program would have to come before this
    body.
        Senator Feinstein. No, I understand that. It is just in the
    public policy that one might look at nuclear weapons. If we are
    trying to discourage their use, now that we have this well-
    established doctrine of preemptive action, unilateral action,
    and you add to this possible scenarios where nuclear weapons
    could be used, why does that not encourage other nations to
    become nuclear in response?
        Secretary Rumsfeld. Well, first let me say one thing. You
    mentioned unilateral action. In the Iraq effort there were 49
    nations involved. I keep reading in the press about unilateral
    this and going it alone that. It was balogna. There were 49
    countries in one way or another assisting in that effort. It
    seems to me that that is just a fact.
        If you think about the proliferation problem, it is a
    serious problem, and I agree completely with you and I worry
    about it a great deal. The fact is we could have 50 percent
    more, even 100 percent more, nuclear nations in the next 15, 20
    years, and that is not a happy world to live in. It is not a
    good thing.
        The idea that our studying a deep earth penetrator,
    studying a nuclear deep earth penetrator, is going to
    contribute to proliferation I think ignores the fact that the
    world is proliferating. It is happening. It is happening
    without any studies by us. It is going on all around us. North
    Korea will sell almost anything it has by way of military
    technologies for hard currency. That is what they do.
        I think that any implication that a study in the Department
    for that would contribute to proliferation simply is not
    consistent with the fact, because we have got a world that is
    filled with proliferation. It is pervasive.
        Senator Stevens. The Senator's time has expired.
        Senator Feinstein. Thank you, Mr. Chairman.
        Senator Stevens. We will now go to the second round and
    limit it, if it is agreeable, to 5 minutes. I have agreed that
    the Secretary and General and Deputy Secretary would be able to
    leave at 12:30.
        Let me start off with just one statement, Senator, Senator
    Feinstein. The implications of the Senator's questions are that
    Harry Truman was wrong. Two of us sitting here were part of the
    2-million-man force that was in the Pacific that might have had
    to be used to invade Japan. I think Harry Truman goes down in
    history for having the courage to make that decision. Not that
    I think any future President will make the same decision, but
    if in that same position I hope we have the weapons and I hope
    we have the President who has the courage to make the decision
    for our national survival.
        My question to you now, though, Mr. Secretary--that took 5
    minutes? We have a situation on these weapons of mass
    destruction. Several of us were among those that were briefed
    by your intelligence people, the Central Intelligence Agency
    (CIA), and others on the probable existence of those weapons. I
    think it is absolutely necessary we follow every possible
    avenue to get them.

             SOLICITING INFORMATION ON WEAPONS OF MASS DESTRUCTION

        My question is, have you advertised a reward for those
    people who might have that knowledge? Any one of those people
    who come forward and gives us the knowledge of the existence of
    those is dead unless we take care of them. I hope we are
    advertising a substantial sum of money for creating a new life
    if they come forward and help us get that information.
        Secretary Rumsfeld. I have not seen radio or leaflets or
    specific documents that do that. I do know that we have asked
    that that be done and that there are reward systems and that
    people are being encouraged to come forward, and that I have
    said publicly to the Iraqi people that their circumstance will
    be much better if they come forward.
        The problem of amnesty is a difficult one because of the
    fact that the Iraqi people may decide to make judgments about
    Iraqi people who served Saddam Hussein's regime. So it is a
    tricky business.
        Senator Stevens. Well, we moved this gentleman who came
    forward on Private Lynch and brought him to this country
    immediately. I think we have that power now. I hope we use it
    in terms of this search for these weapons.
        Secretary Rumsfeld. I agree, it is extremely important.

                     CALLUP ON RESERVE COMPONENT PERSONNEL

        Senator Stevens. Let me ask one last question so others may
    have some time. I know that we have taken into the regular
    service, I guess we have called up, guardsmen and reserve
    people. We are now, I am told, demobilizing 50,000 reservists
    and guardsmen per month, but we are still calling other people
    up.
        What can we see in terms of this process of demobilization
    as far as the Guard and Reserve is concerned?
        Secretary Rumsfeld. Senator, let me say a couple of things.
    First of all, we are not demobilizing 50,000 a month. I do not
    know where that came from.
        Senator Stevens. That was a statement that was made to us
    during the supplemental on the record here, that we would
    demobilize 50,000 a month.
        Secretary Rumsfeld. We would is what it said, I think. You
    said we are, I thought.
        Senator Stevens. That was the aggressive assumption that
    was given to us at the time, that we would demobilize 50,000 a
    month.
        Secretary Rumsfeld. I think that may have been an
    assumption in a proposal that suggested at that point where it
    was possible to do so from a security standpoint on the ground
    you would then begin demobilizing. Thus far, what we have
    returned to the United States both Active, Guard, and Reserve
    are essentially Navy and Air Force personnel. Practically no
    Army or Marines have been brought back.
        General Pace. Correct, sir. The projection, sir, in that
    budget supplement was about we thought perhaps 90 days of
    combat. That turned out to be not the right number. We thought
    there would be 50,000 per month, because we had to have some
    kinds of projections so we could prepare a budget supplemental
    that had some validity to it. That is where the 50,000 per
    month comes from.
        As we sit here, the services are going through their own
    analyses and will present to the Secretary later this week or
    the beginning of next week their proposals on how to
    reconstitute the force, Active and Reserve, in a very
    systematic way that allows us to have the force on station that
    is needed today and allows us to regenerate our long-term
    capability.
        Senator Stevens. Okay. I do not want to take the time for
    it now, but that assumption was the assumption for our
    supplemental. I started today by asking you about have you got
    enough money. That is tied into that matter. If we are not
    going to demobilize them, then we do not have enough money to
    keep them much longer. Would you give us a statement for the
    record of what we can see in terms of that demobilization, how
    it affects the money that you have still got available?
        Secretary Rumsfeld. Yes, sir, we will do that. I will just
    say briefly, what we did was we made a set of assumptions and
    said they were only assumptions, and that if it played out this
    way this is roughly what it would cost. And then we said, if
    this were longer, this would be shorter.
        [The information follows:]

        The fiscal year 2003 Supplemental provided $13.4 billion to the
    Department of Defense in Active and Reserve Military Personnel Pay.
    Presently, U.S. Central Command's stability operations plan for Iraq is
    still evolving because of the dynamic environment inside the country.
    The final plan could require a greater than planned presence, including
    the Reserve Component. The current projection is that the Services will
    fully execute the funding appropriated in the Military Personnel
    Accounts. It remains our goal to reduce the numbers of our Reserve
    Component on active duty as quickly as possible, while at the same time
    not jeopardizing our commitment to Operation Iraqi Freedom and the
    Global War on Terrorism.

        Senator Stevens. Right.
        Secretary Rumsfeld. And therefore it balanced. And we
    thought that, regardless of whether the assumptions proved to
    be exactly right, which as Pete points out they are not right,
    nonetheless the money might be roughly the same. And at least
    at this moment, the Comptroller believes that is the case.
        Senator Stevens. But it looks to me like both are longer,
    Mr. Secretary.
        Secretary Rumsfeld. Well, the war was shorter.
        Dr. Zakheim. The war was shorter and in addition, if you
    keep the people out there, then you are not spending the money
    that we did assume and budget to bring them back. So there
    really is an offsetting factor, and we are still pretty
    confident in the number that we got from you for the
    supplemental.
        Senator Stevens. I would like to see a paper on it if we
    can.
        Secretary Rumsfeld. And sir, if we were continuing the war,
    instead of like 90 days, think of the ammunition we would be
    using and the cost of replenishing all of that. So there were
    so many variables that I think we are probably in the ballpark.

                          FORCE LEVELS IN IRAQ THEATER

        Senator Stevens. Senator Inouye.
        Senator Inouye. Thank you.
        Mr. Secretary, if the information is not classified, can
    you give us the statistics on the number of troops, Army, Navy,
    Air Force, and Marines, in theater at the height of the battle
    3 weeks ago?
        Dr. Zakheim. Sir, I can give you a rough guesstimate and
    give you the exact numbers for the record. But right now Army
    is at about 160,000, the Marine Corps is at about 65,000, the
    Navy and Air Force are both at about 30,000 each, sir.
        Secretary Rumsfeld. That is in the theater, not in Iraq.
        Dr. Zakheim. In the theater. That adds up today--I do not
    know these numbers, but I do know that the overall number today
    is right at about 309,000, of which United States in country,
    correct number, is approximately 142,000.
        Senator Inouye. Is it correct that the Marines sent about
    60 percent of their available combat forces there?
        Dr. Zakheim. I think that math is right, yes, sir. They had
    66,000 of their operating forces there. That sounds about
    right.
        Senator Inouye. And the Army sent the equivalent of four
    divisions?
        Dr. Zakheim. That sounds right, sir.
        Senator Inouye. And the Navy sent the equivalent of six
    carrier battle groups?
        Dr. Zakheim. Five, sir.
        Senator Inouye. Five.
        I ask this because this was the bulk of our military, was
    it not, Mr. Secretary? We have ten divisions available in the
    Army. Sixty percent of the Marines were there, 5 carriers out
    of 12 that are available.
        My question is, with that type of commitment and
    assignment, should we be discouraging some of our fellow
    Americans from considering ourselves invincible? Soon after the
    battle they were talking about going to Syria and possibly
    North Korea.
        Secretary Rumsfeld. Yes, I see your point.
        I would like to answer for the record the answer as to
    whether it was the bulk, because the Reserve call-up was not
    the bulk, and therefore if we took the totality of the United
    States armed forces I think I would guess that it was not a
    majority.
        General Pace. That is true, sir.
        Secretary Rumsfeld. Second, you are certainly right that--I
    should add, they were only there for a relatively short period
    of time. There was a gradual buildup and a gradual drawdown,
    with the Air Force and the Navy moving out within some cases a
    relatively short period of time.
        But you are right, no nation is capable of doing everything
    on the face of the Earth at every moment, and certainly those
    people in the Department of Defense who worry with these things
    every day and recognize the costs and the circumstance of our
    forces understand that fully.
        Senator Inouye. Thank you.
        Senator Stevens. Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman.
        The word that I used earlier, Mr. Secretary, was
    ``shakeup.''

                        ASSIGNMENT TO AMBASSADOR BREMER

        Secretary Rumsfeld. Yes.
        Senator Byrd. And you seemed to take some--not necessarily
    I would say umbrage, but you sought to differ that
    classification. Let me read from the Philadelphia Inquirer of
    May 13 as follows: ``The new U.S. civilian overseer, former
    diplomat L. Paul Bremer, who arrived yesterday to take over the
    Office of Reconstruction and Humanitarian Assistance from
    retired Army Lieutenant General Jay Garner, is facing his own
    housecleaning. Barbara Bodine, the State Department official
    overseeing the reconstruction of Baghdad, was reassigned after
    3 weeks on the job and at least five other senior members of
    the ORHA [Office of Reconstruction and Humanitarian
    Assistance]''--``of the ORHA staff also will be returning home,
    a senior U.S. official said yesterday.''
        So I offer that for the record in support of the word which
    I used, that being ``shakeup.'' Now----
        [The information follows:]

                 [From the Philadelphia Inquirer, May 13, 2003]

               U.S. Hints at Boost in Forces Amid Iraqi Troubles

      (By Maureen Fan, Andrea Gerlin and Soraya Sarhaddi Nelson; Inquirer
                                 Staff Writers)

        Turmoil yesterday continued to dog Iraq and the American
    effort to rebuild the country, and the United States' top
    uniformed military officer hinted that restoring order may
    require more American troops than originally planned.
        Air Force Gen. Richard B. Myers, the chairman of the Joint
    Chiefs of Staff, said that security and infrastructure problems
    were the two major issues facing Iraq and that U.S. troops
    would have a significant role until Iraqis could run their
    police force independently and basic services were returned.
        Additional military units headed to Baghdad--namely the
    First Armored Division based in Germany--were intended to
    replace the Third Infantry Division and other units that fought
    the war, but Myers yesterday said only that they ``may''
    replace units now in Iraq.
        Myers also said that other countries had offered troops to
    buttress the American presence. He declined to be specific and
    said that their ``exact disposition'' had not been determined.
        Myers' comments illustrated the problems facing the United
    States as it tries to put Iraq back on its feet without relying
    on either a lengthy American military occupation or recycled
    bureaucrats from Saddam Hussein's regime.
        The difficulty was made clear again yesterday when Iraq's
    U.S.-approved health minister resigned after questions were
    raised about his Baath Party pedigree.
        The new U.S. civilian overseer, former diplomat L. Paul
    Bremer, who arrived yesterday to take over the Office of
    Reconstruction and Humanitarian Assistance (ORHA) from retired
    Army Lt. Gen. Jay Garner, is facing his own housecleaning.
    Barbara Bodine, the State Department official overseeing the
    reconstruction of Baghdad, was reassigned after three weeks on
    the job, and at least five other senior members of the ORHA
    staff also will be returning home, a senior U.S. official said
    yesterday.
        In the Shiite holy city of Najaf, meanwhile, a tearful
    homecoming for the head of Iraq's largest opposition group came
    to an abrupt end last night when dozens of followers of a rival
    cleric shoved their way toward the balcony on which the newly
    returned leader stood, prompting his bodyguards to hurry him
    indoors for fear that he might be assassinated.
        The bright spot in the day was an announcement that U.S.
    forces had captured Dr. Rihab Rashid Taha, the British-trained
    microbiologist known as ``Dr. Germ'' for her work developing
    biological weapons for Hussein. U.S. officials also said they
    had seized the former chief of staff of the Iraqi armed forces,
    Ibrahim Ahmad Abd al-Sattar Muhammad al Tikriti, but a Pentagon
    official cautioned that his identity had not been verified.
        The abrupt resignation of the health minister, Dr. Ali
    Shinan--whom critics accuse of corruption and diverting medical
    supplies at the expense of poor Iraqis--underscored the first
    challenge for the U.S. rebuilding effort: figuring out how to
    restore services and chart a new course for Iraq without
    relying on former Baathist officials. The task is complicated
    by the fact that Baath Party membership was virtually a
    condition of employment for anyone who wanted a government job
    in the last three decades.
        ``We need to move humanitarian assistance,'' said the
    ORHA's Steve Browning yesterday after touring the 1,000-bed al
    Yarmouk Hospital. ``We need to move medical supplies. We need
    to get people back to work. We need to make salaries. We need
    to produce petrol. We need to produce electricity. We need to
    get the sanitation systems working.''
        The chaos in Najaf highlighted another obstacle to U.S.
    reconstruction efforts, a growing power struggle within Iraq's
    majority Shiite Muslim community. Since he returned to his
    homeland Saturday after 23 years in exile in neighboring Iran,
    Ayatollah Mohammed Baqr al Hakim, the head of the Supreme
    Council for the Islamic Revolution in Iraq, has repeatedly
    called for an end to the struggle for religious control that
    has emerged since Hussein's fall.
        The most visible instigator in this war for Shiite hearts
    and minds is Najaf cleric Moqtader al Sadr, the youngest son of
    Muhammad Sadiq al Sadr, a powerful marjah, or senior spiritual
    leader, who was slain by Hussein in 1999. Followers of the
    marjah and his son disrupted Hakim's homecoming at Grand Imam
    Ali Shrine yesterday, holding up posters and a painting of the
    senior Sadr, whose name they chanted as they beat their chests.

        Secretary Rumsfeld. Could I comment on that?
        Senator Byrd. Oh, yes. How much time do I have?
        Senator Stevens. About 3\1/2\ minutes, sir. It depends on
    when the Secretary wants to leave.
        Senator Byrd. Oh, he is in no hurry to leave.
        He is in a fighting mood, I can see that.
        Secretary Rumsfeld. Senator, let me comment on that
    article, from whatever paper it was. Because something is in
    the press, of course, does not make it so.
        Senator Byrd. The Philadelphia Inquirer.
        Secretary Rumsfeld. Right. Now, first of all, just some
    facts. Number one, he was not sent out there as part of a
    shakeup. He was sent out there as presidential envoy. He was
    not sent out there to replace Mister--General Garner as head of
    the Office of Reconstruction and Humanitarian Assistance. He
    was sent out there as a presidential envoy.
        The individual you mentioned who was reassigned had not
    been there 3 weeks. I can remember seeing her in December or
    January, which is months ago, when I visited their office in
    the Pentagon, and then again when I saw them off in the parking
    lot of the Pentagon to see them away, which was in I believe
    December or January. So it is a lot more than 3 weeks.
        There are a number of things in that article with which I
    would differ.

                          NUCLEAR CAPABILITIES IN IRAQ

        Senator Byrd. For months, Mr. Secretary, the administration
    warned of the potential nuclear capabilities of Iraq. Indeed,
    one of the main justifications for U.S. action in Iraq was to
    ensure that nuclear weapons and material did not fall into the
    hands of terrorists. It has been widely reported that U.S.
    troops in Baghdad have secured some buildings, including the
    oil ministry. But according to a story in the Washington Post
    on May 10, our forces failed to prevent looting at seven
    nuclear facilities.
        I quote from the article: ``It is not clear what has been
    lost in the sacking of Iraq's nuclear establishment, but it is
    well documented that looters roamed unrestrained among stores
    of chemical elements and scientific files that would speed
    development in the wrong hands of a nuclear or radiological
    bomb. Many of the files and some of the containers that held
    radioactive sources are missing.''
        The administration argued that war against Iraq was
    necessary to prevent the spread and development of nuclear
    weapons, and yet by failing to protect these sites we may have
    actually facilitated the spread and development of nuclear
    weapons. I understand the importance of protecting the oil
    ministry so that the daily running of Iraq could continue. But,
    given that one of the reasons for invading Iraq was to prevent
    the spread of nuclear materials and capabilities, why were
    these sites not protected, Mr. Secretary?
        Secretary Rumsfeld. Senator, I do not believe anyone that I
    know in the administration ever said that Iraq had nuclear
    weapons. So the statement I think you read, that we have warned
    of potential nuclear capability and weapons and materials in
    the hands of terrorists, in terms of their having them now I do
    not know anyone who suggested that that was the case.
        The Central Intelligence Agency I know has assessed that
    they had a nuclear program and assessed that they had chemical
    and biological weapons, a slight difference from the article.

                      LOOTING IN IRAQ AND PROTECTING SITES

        As to looting, my understanding is that a number of sites
    were located by U.S. forces, coalition forces, on the ground,
    they were looked at and a judgment was made that they should go
    to a different site and look at those other sites. In some
    cases, before they got there things were looted. In some cases,
    possibly after they got there and went to another site things
    may have been looted.
        It is not possible to have enough forces in a country
    instantaneously to guard every site before somebody can get
    into it. I do not know about the choice between the oil
    ministry and some site that that article may be referring to. I
    do know that they had a lot of tasks to do. They had to win the
    war, they had to deal with death squads of Fedayeen Saddam,
    they had to deal with Baath Party members in civilian clothes
    that were trying to kill them, and all in all I think they did
    a darn good job.
        We have no evidence to conclude, as that article suggests
    might have happened, that, in fact, nuclear materials did leave
    and get into the hands of people. I do not have evidence that
    it did or did not. That is the best I can do.
        Senator Byrd. Why was protecting these well-known nuclear
    facilities not at least as high priority as protecting the oil
    ministry?
        Secretary Rumsfeld. My impression is from what I know, and
    I would have to check, that a number of sites were protected.
    There are something like at the present time--the number
    changes every month or every week, but I believe there are
    something like 578 suspected weapon of mass destruction sites.
    What does that mean? Does it mean they are all sites where
    something--no, it just means that there was a scrap of
    information here that suggested that somebody might have been
    doing something there and you ought to check it out.
        But there are hundreds of these possible sites. We also
    have intelligence that suggested that they took the
    documentation and a number of the materials, dispersed them and
    hid them, in some cases in private residences. So how does any
    force of any size instantaneously get to all of those locations
    and provide perfect security for them so someone cannot loot
    them? I think it is an unrealistic expectation.
        Senator Stevens. Senator, I am sorry. I have got a bunch of
    appointments and we guaranteed the Secretary we would be
    through here at 12:30. He has, as I understand it, to go to the
    White House for a meeting. So with your cooperation, I would
    like to let him go.
        Senator Byrd. Is this a filibuster you are shutting off?
        Senator Stevens. No. You are not filibustering yet,
    Senator. I have seen you filibuster. This is not that.
        Senator Byrd. Well, we will be talking with the Secretary
    again. Thank you. Thank you, Mr. Secretary.
        Secretary Rumsfeld. Thank you, sir.
        Senator Stevens. We appreciate your cooperation.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Byrd. Mr. Chairman, may I ask unanimous consent
    that the article from the Washington Post of Tuesday, May 13,
    entitled ``Baghdad Anarchy Spurs Call for Help,'' that it be
    included in the record in its entirety?
        Senator Stevens. It will be.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                  Questions Submitted by Senator Thad Cochran

                             THE HURRICANE HUNTERS

        Question. Secretary Rumsfeld, I understand the Hurricane Hunters
    based at Keesler Air Force Base were recently deployed to the Pacific
    operating out of Elmendorf, Alaska in support of Winter Weather
    Reconnaissance missions for the National Centers for Environmental
    Prediction. Similarly, a detachment of the Hurricane Hunters was
    recently deployed to Guam to perform weather reconnaissance in support
    of current operations. Can you provide the Subcommittee with an update
    on their deployment and the unique capability the Hurricane Hunters
    provide to our ability to predict weather around the world?
        Answer. Pacific Air Forces requested weather reconnaissance
    assistance to cover the period of transition between the failing Geo-
    stationary Meteorological Satellite GMS 5 and its replacement by the
    Pacific Geo-stationary Operational Environmental Satellite GOES 9.
    During the satellite transition, contingency bomber and fighter forces
    were also deployed to Anderson AFB, Guam in support of Pacific Command
    (PACOM) requirements. In order to ensure optimum utilization of the air
    assets, since the deployment coincided with the typhoon season, WC-130
    aircraft and personnel from the 53rd Weather Reconnaissance Squadron
    (WRS) were requested and subsequently deployed to Guam. The WC-130
    capability filled the gap and performed the needed mission admirably.
    Shortly after the departure of contingency bomber and fighter forces,
    the 53rd WRS redeployed from Guam on 6 June 2003.
        Their presence allowed PACOM to operate in the Pacific area of
    responsibility while avoiding inadvertent typhoon evacuation of the
    bomber and fighter forces, enhancing the ability to maintain needed
    force presence and deterrence throughout the contingency. The unit was
    deployed for approximately 30 days and performed over 100 hours of
    tropical cyclone reconnaissance providing weather forecast centers
    world-wide (Joint Typhoon Warning Center, National Center for
    Environmental Prediction, Air Force Weather Agency, Fleet Numerical
    Meteorology and Oceanography Center, United Kingdom Meteorology Center,
    and others) with previously unavailable data over the western Pacific
    ocean.
        The WC-130 aircraft and crews provide a unique capability to gather
    meteorological data from remote and over water locations from the
    surface up to the operational capabilities of the aircraft, 30,000 feet
    or so. They accomplished this by collecting information from the
    aircraft's special instruments called dropsondes and by airborne
    meteorological observations. The dropsondes collect wind direction and
    velocity, pressure altitude, air temperature, relative humility and
    position every one-half second as it descends by parachute.
        Initial assessments of WC-130 data seem to indicate an enhanced
    ability to determine tropical cyclone location and forecast tracks in
    three separate storm events. WC-130 data fixed storm locations by as
    much as 80NM from satellite-derived storm locations. Data from the WC-
    130 missions increased definition of developing storm characteristics
    and intensities (not well defined by satellite coverage). The WC-130
    data provided relevant and accurate information to military decision
    makers. A comparison study is now underway to determine how and to what
    degree WC-130 data improved overall typhoon model forecasts for the
    area of responsibility. The technical data will be assessed and
    reported through United States Pacific Command upon completion.

                NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

        Question. Secretary Rumsfeld, as part of the fiscal year 2004
    budget process, I understand you have approved an initiative to
    transfer the weather reconnaissance mission presently performed by the
    Hurricane Hunters from the Department of Defense to the National
    Oceanic and Atmospheric Administration (NOAA). Considering recent
    deployments directly supporting current military operations, I am
    concerned with the ramifications of this proposed transfer. How will
    the military support missions be performed if this weather
    reconnaissance mission is transferred to NOAA?
        Answer. The recent deployment of the 53rd Weather Reconnaissance
    Squadron (WRS) at Keesler Air Force Base, Mississippi is the only
    instance of unit activation for military weather support since the
    mission transferred from the active component to the Air Force Reserve
    in August of 1990. Currently, there is no equivalent military
    capability that exists to conduct the military weather mission
    performed by the 53rd WRS.
        After the weather reconnaissance mission is transferred to the
    National Oceanic and Atmospheric Administration (NOAA), there are two
    separate and distinct ways for the Department of Defense to achieve
    this type of weather reconnaissance support. First, if the President
    declares the situation a national emergency, he has the power to
    transfer resources and officers from NOAA to the Department of Defense.
    This is provided in 33 USC 3061. The second way is to request NOAA to
    perform the mission within their resources without being mobilized.
    This second process could be outlined in the construct of the
    memorandum of agreement for the mission transfer.

                                      UAVS

        Question. Secretary Rumsfeld, when General Myers last appeared
    before this Subcommittee, he referred to the need for persistent, long-
    loiter intelligence, surveillance and reconnaissance (ISR) platforms.
    Unmanned Aerial Vehicles such as Global Hawk have proven to be
    extremely valuable to our operations. Are we moving fast enough to
    procure systems such as Global Hawk and other necessary UAV systems?
        Answer. During Operation Iraqi Freedom, the Department deployed
    over 10 different UAV systems to support military operations. This was
    the widest use of UAVs in any operation to date; they not only provided
    persistent surveillance and broad area search but also target
    identification and designation for weapons employment plus battle
    damage assessment following a strike. UAVs were even, themselves,
    strike platforms; Predator flew in an armed reconnaissance role with
    Hellfire missiles engaging and destroying a number of tactical targets.
    Global Hawk also showed its ability to provide persistent surveillance.
    A single prototype flew over 350 hours in direct combat support and
    located over 300 Iraqi tanks, about 38 percent of all the known armor
    assets of Iraq military. We are procuring Air Force Global Hawk and
    Predator UAVs at about the right pace when the additional components of
    communications, command and control and training are included.
        Question. Secretary Rumsfeld, when General Myers last appeared
    before this Subcommittee, he provided testimony indicating the
    establishment of NORTHCOM has significantly improved the preparedness,
    responsiveness and integration between the U.S. military and other
    federal agencies defending the homeland. Considering this integration
    between the military and the Homeland Security Agency, do you believe
    integration would be enhanced if the military and the Homeland Security
    Agency used common UAV platforms, such as Global Hawk, in their
    operations?
        Answer. The Department of Defense and the Department of Homeland
    Security, at the request of Senator Warner, Chairman of the Senate
    Armed Services Committee, are jointly examining the potential utilities
    of unmanned aerial vehicles for homeland security missions. When the
    examination is completed, the results will also be provided to the
    Subcommittee.
        Question. Secretary Rumsfeld, I understand the budget request
    contains funding for one LPD-17 amphibious ship in fiscal year 2004,
    but no LPD in fiscal year 2005; this appears to be an inefficient
    program profile. Admiral Clark and General Hagee have both indicated
    that they could use that ship sooner than later. Can you share your
    thoughts on the LPD-17 program profile and requirements?
        Answer. Yes. This is not an issue of when we need the ships but
    rather one of balancing requirements with limited resources in view of
    industrial base and program realities. I believe that everyone agrees
    that replacing the LPD-4 class earlier rather than later is a good
    thing. However, during last year's budget review, the Navy concluded
    that leaving a gap year in fiscal year 2005 was appropriate for the
    time being because insufficient production data was available to
    justify adding more LPD-17 workload. Significant design problems led to
    a number of delays and cost increases--a Nunn-McCurdy cost breach--up
    to that point. They had four ships on contract with the lead ship still
    in early production and virtually no construction completed on the
    other three--and plans to award a fifth ship in the second half of
    fiscal year 2003. In short, the Navy had a lot of ships on contract or
    committed with no empirical data that proved the LPD-17 production
    schedule was back on track. Since the gap was an fiscal year 2005
    issue, they had another opportunity to revisit the issue and make
    adjustments with the benefit of more production data. I reviewed the
    Navy's plan and I agreed with their approach.
        My understanding today is that production on the LPD-17 is
    progressing well and that the design is proving to be stable. As a
    result, the Navy has made this issue a priority as part of their
    program/budget review process. I also intend to conduct a thorough
    review of this issue this fall as the Department finalizes the fiscal
    year 2005 budget.
        Question. Secretary Rumsfeld, as you know, and have known for
    several years now, the current rate of shipbuilding is not sufficient
    to meet the established goal of a 375-ship Navy. In fact, it will fall
    far short of even a 310-ship Navy, and require enormous investment in
    the out years simply to catch up. If more funding were available for
    shipbuilding, how could it be most effectively spent in the near term?
        Answer. Because of industrial base reasons and the fact we are in a
    transition period in shipbuilding--at the end of the production of DDG-
    51 and at the beginning of several new ship classes--more funding added
    to shipbuilding in fiscal year 2004 would not be prudent. We currently
    have DDG-51s, LPD-17s, and T-AKEs already on contract or budgeted in
    sufficient numbers to load the shipyards to their capacities. Adding
    additional funds to put more ships on contract will not result in ships
    being built earlier. Similarly, the long lead-times and the limited
    industrial base for nuclear components preclude the possibility to
    increase Virginia class submarine production before the fiscal year
    2007 timeframe. And finally, the kind of ships we need to start
    building (and in large numbers for some) to cope with the threats of
    the 21st century--DD(X), LCS, MPF(F), CVN-21 and LHA(R)--simply are not
    yet ready for production.
        Question. Secretary Rumsfeld, I understand you would like to
    consolidate the Active, National Guard and Reserve Military Pay
    Accounts into one Account that would be managed by the Active
    components. Do you think that we can make a significant change like
    this without jeopardizing the integrity of the Guard and Reserve
    Military Pay Accounts?
        Answer. I have proposed the consolidation of 10 Military Pay
    appropriation accounts into 4. However, I have not proposed that the
    consolidated accounts be managed by the Active components. The
    consolidation does not affect the Military Services Title 10
    responsibilities. Further, I don't see the consolidation as threatening
    the integrity of the Guard and Reserve Military Pay Accounts at all.
    The revised structure consolidates all Guard and all Reserve funding
    into single budget activities (one for the Reserves and a separate one
    for the Guard). The consolidation of personnel appropriations is
    designed to streamline and optimize funds management and eliminates the
    need to reprogram funds within the Reserve Components by eliminating
    the $10 million reprogramming threshold currently imposed on Reserve
    Component programs. The new structure merges the existing two budget
    activities for the Reserve and National Guard Personnel funding into
    one budget activity for each Reserve Component. Over time, the Reserve
    Components' evolving role has made the two budget activities less
    meaningful and executable.

                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison

        Question. What have you learned from the mobilization of the
    reserve component for Operations Enduring Freedom and Iraqi Freedom?
    Where do you need to improve and what do you need to do it?
        Answer. The force structure and the timing of the use of the
    Reserve Components need adjustment. Due to post Viet Nam adjustments
    and the ``Peace Dividend'' of the 1990's many military capabilities
    necessary to prosecute military actions of modest scale were placed
    entirely or predominately within the Reserve Components. This limits
    the flexibility necessary for the use of military force in a post cold
    war environment, particularly in the war on terrorism.
        Force structure and the timing of the use of the Reserve Components
    are both under review. Active/Reserve Component changes are up for
    revision (September 2003) with more to soon follow. Review of Operation
    Plans that contemplate the early use of Reserve Component forces is
    also under review, with Combatant Commanders tasked to review and
    revise their plans, reducing the necessity for early mobilization of
    the Reserve Components.
        Question. Do we have the right mix of skill sets in the active and
    reserve component? Do we need more troops in the active component?
        Answer. The mix of skill sets in the Active and Reserve Components
    is currently being examined in several forums. The Operational
    Availability Study, the OSD AC/RC Mix study, as well as individual
    Service studies are all looking at the right mix of Active and Reserve
    capabilities to ensure that the needs of the National Security Strategy
    are met through the key factors of availability, responsiveness,
    agility, and flexibility. The studies are ongoing, but initial results
    indicate some capabilities need to be addressed.
        I do not believe that additional active end strength is required to
    meet the national strategy. Instead, more progress needs to be made on
    distributing our skill mix to optimize our force capabilities within
    existing end strength.
        We will be examining the possibility of rebalancing capabilities
    within war plans and between the Active and Reserve Components. While
    recent mobilizations have highlighted shortages in certain capabilities
    that stressed Reserve forces, there are multiple solutions to address
    those issues.
        In addition, over 320,000 military manpower spaces have been
    identified as performing duties in specialties or situations that can
    potentially be performed by other kinds of personnel. I have directed
    my staff to conduct an in-depth review of these positions to determine
    how many can be reasonably converted to civilian performance, thus
    freeing military manpower to meet our most pressing demands.
    Application of a variety of actions including innovative management
    techniques for the Reserves will maximize the efficiency of our
    existing forces and may therefore require very little changes to
    existing force structure.
        Question. Should U.S. Forces be based overseas in new locations to
    better train and respond to today's threats? What is the right level of
    troop strength overseas?
        Answer. Both these questions are under intense review by the
    Department. These are exactly the kind of new assessments we must do to
    take account of everything we know about 21st century threats.
        Question. Were more private contractors (and contractor employees)
    involved with Operation Iraqi Freedom than Operation Desert Storm?
    (Please provide as exact count as possible for each category.) How were
    private contractors used? What impact does the use of private
    contractors on the battlefield have for Transformation?
        Answer. Contracting for these services was done by a wide variety
    of Civilian Agencies, Defense Agencies, Military Departments and
    individual military commands. In addition, contracts and orders under
    existing contracts for support to deployed forces covered effort both
    in the country of operations and at other locations including the
    United States. At present there is no unique identifier in the
    contracts data system to allow for identification of an effort to a
    particular military deployment. Therefore, it is not possible to
    develop this data without having the Military Departments conduct a
    long and expensive manual data call.
        Contractors were used to provide the following services: laundry
    and bath facilities; clothing exchange and repair; food service;
    mortuary affairs; sanitation services; billeting/facilities management;
    moral, welfare and recreation facilities; information management;
    personnel support; maintenance; transportation; medical services;
    engineering and construction; signal support; power generation and
    distribution; automation operations; and physical security.
        The use of contractors on the battlefield is not new. The military
    has always used contractors to support its operations. The military
    will continue to use contractors to obtain capacity that the military
    does not possess, to facilitate faster movement into an area of
    operations, to reduce soldier OPTEMPO or deployment time, and to
    maximize combat forces when force size is constrained. Where these
    issues arise during the transformation process, the use of contractors
    will be one tool available to resolve the issue.

                                     ______

                Questions Submitted by Senator Daniel K. Inouye

        Question. What funds from the fiscal year 2003 Supplemental
    Appropriations Act have been obligated to date? What is the timeline to
    distribute the remainder of the funds provided in the Supplemental, and
    how much of the Supplemental do you estimate will be carried over into
    fiscal year 2004?
        Answer. As of May 30, 2003 total obligations from funds made
    available in fiscal year 2003 for the Global War on Terrorism and
    Operation Iraqi Freedom totaled $31,243 million. It is projected that
    approximately $4 billion of the $62.6 billion appropriated in the
    fiscal year 2003 Supplemental will be obligated in the early part of
    fiscal year 2004.
        Question. What are the Department's total cost projections in
    fiscal year 2004 for keeping troops in support of Operation Iraqi
    Freedom or any subsequent missions in Iraq? In the President's pending
    budget request for fiscal year 2004 sufficient to cover these costs?
        Answer. A drawdown of troops in support of Operation Iraqi Freedom
    is currently underway. I expect the drawdown will continue through the
    middle of the next fiscal year. Presently, CENTCOM's stability
    operations plan for Iraq is still evolving because of the dynamic
    environment inside the country, and may require a significant presence
    of our forces. The numbers of troops and pace of demobilization not yet
    been finalized. Therefore, the cost of supporting Operation Iraqi
    Freedom troops has not yet been determined. The President's pending
    budget request does not specifically include funds to support Operation
    Iraqi Freedom troops. During fiscal year 2004 we will assess our
    funding requirements and determine the means by which we can finance
    Operation Iraqi Freedom costs. It remains my goal to reduce the numbers
    of deployed troops as quickly as possible, while at the same time not
    jeopardizing our commitment to Operation Iraqi Freedom and the Global
    War on Terrorism.

                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                          DEPLOYMENT OF NATIONAL GUARD

        Question. My office has heard reports that the 157th Military
    Police Company of the West Virginia National Guard has been deployed
    almost continuously since September 11 attacks, and has recently
    shipped out for a six-month deployment overseas. While the members of
    this unit are proud to serve their country, and they have served both
    in our homeland and around the world with great distinction, their
    families are increasingly being strained by what seems like a
    neverending string of mobilizations for citizen-soldiers.
        Secretary Rumsfeld, what steps are being taken to minimize the
    back-to-back deployments of members of the Reserves and the National
    Guard?
        Answer. I signed out a letter on July the 9th to the Secretaries of
    the Military Departments, the Chairman of the Joint Chiefs of Staff,
    and the Under Secretaries of Defense directing them to rebalance the
    forces. In that letter I enumerated three principal objectives that I
    wanted to achieve:
      --Structure active and reserve forces to reduce the need for
            involuntary mobilization of the Guard and Reserve, and
            structure forces to limit involuntary mobilization to not more
            than one year every six years.
      --Establish a more rigorous process for reviewing joint requirements;
            ensuring force structure is appropriately designed.
      --Make the mobilization and demobilization process more efficient.
        I levied actions that I expect to be completed, and an aggressive
    set of milestones for the responses. I assure you that I am as
    concerned as you are and will strive to ensure the continued judicious
    and prudent use of our valuable Guard and Reserve forces.
        Question. Congress enacted a $100-per-day extended deployment pay
    in 1999 to encourage shorter tours for our military personnel. This pay
    was suspended shortly after the September 11 attacks. Does your budget
    request contain any compensation to help Service members and their
    families who experience back-to-back deployments? Will these proposals
    help the families of those who have been deployed since September 11,
    2001, or will the compensation only apply to future deployments?
        Answer. The Department submitted a proposal for the fiscal year
    2004 Authorization Bill that would compensate members for both
    excessively long deployments and frequent deployments, with
    compensation at an appropriate scale. The proposal also includes Guard
    and Reserve members who have been called up for more than 30 days for a
    second time in support of the same contingency operations. Both the
    Senate and House Armed Services Committees have similar PERSTEMPO Pay
    provisions in their respective fiscal year 2004 authorization bills.
        The Military Departments did not project funding in the fiscal year
    2004 budget for this payment since the current National Security waiver
    allows the SECDEF to suspend PERSTEMPO payments during a National
    Emergency. The Department is committed to paying qualified members
    PERSTEMPO pay once the National Security waiver is lifted.
        The Military Departments are also working initiatives to lessen the
    adverse impacts of high individual TEMPO. Those initiatives focus on
    providing predictability in deployments; optimizing time required for
    pre-deployment training work-ups and post-deployment maintenance; and
    implementing organizational initiatives, such as the Air Force
    Aerospace Expeditionary Forces.

                                MANAGEMENT PLANS

        Question. The OMB scores agencies on how well they comply with the
    President's Management Agenda. Agencies are encouraged to submit
    management plans to the OMB, and to meet the competitive sourcing
    targets outlined in the President's budget. The OMB has informed me
    that these plans, while submitted to the OMB for approval, can be
    released to the public at the discretion of the agency heads.
        If the Congress is to appropriate $380 billion to the Defense
    Department to employ 636,000 civilians and 2.4 million military
    personnel, I expect that you would first provide the Congress with a
    copy of any management plan or competitive sourcing plan that the
    Defense Department submits to the OMB.
        Secretary Rumsfeld, when do you expect to submit your next
    management plan to the OMB, and how soon can you make that plan
    available to the Appropriations Committee?
        Answer. OMB will receive the competitive sourcing management plan
    with the fiscal year 2005 budget. OMB must approve the submission,
    which will then be included in the President's budget submission.

                                     ______

                Questions Submitted by Senator Patrick J. Leahy

                      WEAPONS OF MASS DESTRUCTION IN IRAQ

        Question. Secretary Rumsfeld, before the war, we all read the
    assessments that Iraq possessed large stocks of weapons of mass
    destruction and that the military was prepared to use them in the event
    of attack. Thankfully, no attacks were made against our forces, but we
    still have not been able to locate any of these weapons stocks. Has DOD
    completed an intelligence assessment of why these predictions proved
    incorrect? Can the department provide the Committee with a detailed
    briefing about these reviews? Additionally, can you provide the
    Committee with a detailed briefing about the possibility that some of
    these weapons of mass destruction have fallen into the hands of forces
    hostile to us?
        Answer. DOD continues to investigate the extent of Iraq Weapons of
    Mass Destruction programs and stockpiles. The Iraq Survey Group has
    been established to coordinate the search for WMD in Iraq. In late
    July, the Intelligence Community provided to Congress every publication
    from 1992 to the present on Iraqi WMD programs and on its threat
    assessments. Additionally, numerous Intelligence Community and DOD
    officials have been to brief or testify before Congress on this issue.

                                      IRAQ

        Question. Secretary Rumsfeld, I am told that the contract with
    Kellogg Brown & Root on fixing Iraqi oil facilities is classified.
    Giving a major contract in secrecy to a company with close ties to the
    administration will only increase suspicions of those inclined to think
    we are in Iraq to benefit American companies rather than the Iraqi
    people.
        Why is the contract with Kellogg Brown & Root classified (if that
    is correct)?
        Answer. The contract with Brown & Root Services, a division of
    Kellogg, Brown & Root (KBR), was awarded March 8, 2003, to support the
    DOD mission of repair and continuity of operations of the Iraqi oil
    infrastructure. The contract was classified because it was issued
    before the war started, when the mission was classified because the
    planning and limited activities being undertaken had to be integrated
    with CENTCOM's military planning for the war effort. This included
    plans for military action to protect parts of the oil infrastructure
    against potential sabotage in the event of war. Disclosure, before the
    commencement of hostilities, of plans to repair and maintain continuity
    of oil operations would have run a serious risk of compromising the
    related military planning activity. Additionally, the contractor for
    repair and continuity of operations had to be ready to commence work
    immediately upon notice to proceed, but it was not known in advance
    when the commencement of work might be required, since that would
    depend on the timing of the military campaign and how events unfolded
    on the ground as the campaign progressed. Therefore, it was not
    possible to award an unclassified contract prior to hostilities without
    jeopardizing the success of the mission.
        On March 6, 2003, the Department declassified only the fact that it
    had plans for extinguishing fires and assessing damage to oil
    facilities in Iraq. The fact that the Department was planning for the
    possibility that it would need to repair and provide for continuity of
    operations of the Iraqi oil infrastructure remained classified until
    March 22, 2003. This prevented earlier acknowledgement or announcement
    of potential requirements to the business community.
        The government's strategy has been to compete the execution effort
    at the earliest reasonable opportunity consistent with the needs of the
    mission. The declassification of the mission has enabled the Department
    to plan a full and open competition in which the U.S. Army Corps of
    Engineers will solicit competitive proposals to provide the broad range
    of services that may need to be performed to support this mission in
    the months ahead. The contracts awarded as a result of this competition
    will replace the contract now in place with KBR.
        Question. How many other contracts addressing reconstruction in
    Iraq are classified, and what is the total potential value of those
    contracts?
        Answer. Contracts or task orders supporting the DOD mission of
    repair and continuity of operations of the Iraqi oil infrastructure
    were classified because they were issued before the war started, when
    the mission was classified because the planning and limited activities
    being undertaken had to be integrated with CENTCOM's military planning
    for the war effort. This included plans for military action to protect
    parts of the oil infrastructure against potential sabotage in the event
    of war. Disclosure, before the commencement of hostilities, of plans to
    repair and maintain continuity of oil operations would have run a
    serious risk of compromising the related military planning activity.
    Additionally, the contractor for repair and continuity of operations
    had to be ready to commence work immediately upon notice to proceed,
    but it was not known in advance when the commencement of work might be
    required, since that would depend on the timing of the military
    campaign and how events unfolded on the ground as the campaign
    progressed. Therefore, it was not possible to award an unclassified
    contract prior to hostilities without jeopardizing the success of the
    mission.
        On March 6, 2003, the Department declassified the fact that it had
    plans for extinguishing fires and assessing damage to oil facilities in
    Iraq. The fact that the Department was planning for the possibility
    that it would need to repair and provide for continuity of operations
    of the Iraqi oil infrastructure was classified until March 22, 2003.
    This prevented earlier acknowledgement or announcement of potential
    requirements to the business community.
        The contractual actions related to the oil infrastructure mission
    are as follows:
      --Planning Effort--done under a Task Order issued November 11, 2002,
            under the Army's Logistics Civil Augmentation Program (LOGCAP)
            contract. The value of the task order is approximately $1.8
            million.
      --Pre-positioning Effort--done under a letter contract issued
            February 14, 2003. The value of the letter contract is $37.5
            million.
      --Continued Pre-positioning, and subsequent Execution Effort--done
            under a contract awarded March 8, 2003. As of May 27, 2003,
            five task orders had been placed under this Indefinite
            Delivery/Indefinite Quantity (ID/IQ) contract. The first four
            task orders are classified since they were issued prior to
            March 22, 2003. The fifth task order, issued May 4, 2003, is
            unclassified. The total estimated cost of the five task orders
            placed under that contract was, as of May 27, 2003,
            $184,786,000. The total value of the contract will be the sum
            of the values of the orders placed under it. Since assessments
            of the condition of the infrastructure are still being done, it
            is not possible to predict with precision all work that will be
            required to complete the mission. The ID/IQ contract enables
            the government to obtain the services it needs once specific
            requirements are identified. The Corps of Engineers will limit
            orders under this contract to only those services necessary to
            support the mission in the near term.
        The government's strategy has been to compete the execution effort
    at the earliest reasonable opportunity consistent with the needs of the
    mission. The declassification of the mission has enabled the Department
    to plan a full and open competition in which the U.S. Army Corps of
    Engineers will solicit competitive proposals to provide the broad range
    of services that may need to be performed to support this mission in
    the months ahead. The contracts awarded as a result of this competition
    will replace the contract now in place with KBR, and task orders will
    then be issued under the competitively awarded contracts.
        Question. Do we know whether Iraqi WMD have been given to terrorist
    groups since the war began?
        Answer. There is no credible indication former regime members have
    provided chemical, biological, radiological or nuclear weapons or
    components to terrorist organizations since the war began.
        Question. How long will it take to search for WMD in Iraq? When
    will we know the extent of WMD in Iraq before the war?
        Answer. On both questions, it is impossible to predict. However, I
    am confident that we indeed will find evidence of prohibited activity
    related to weapons of mass destruction.
        Question. The International Atomic Energy Agency (IAEA) under the
    Nuclear Nonproliferation Treaty has the responsibility to ensure
    nuclear materials in Iraq are safeguarded and the right to inspect
    nuclear facilities. When will you let IAEA inspectors back in?
        Answer. All of Iraq's nuclear material under NPT safeguards is
    located at the Baghdad Yellow Cake Storage Facility (Location C). From
    June 7 to 23, 2003, the IAEA conducted a Physical Inventory
    Verification (PIV) inspection of Location C with support from Coalition
    forces. All of the proliferation sensitive and virtually all of the
    other material subject to NPT safeguards was accounted for. Location C
    has been resealed, and its perimeter is being guarded by U.S. military
    forces. What has been referred to as ``looting'' at this site appears
    to have been limited to the theft of items such as steel barrels or
    furniture, not nuclear material.
        Pursuant to U.N. Security Council Resolution 1483, the Coalition
    Provisional Authority is responsible for the disarmament of Iraq.

                                MISSILE DEFENSE

        Question. You plan to field a limited ground-based mid-course
    missile defense system by the end of 2003-2004.
        When do you plan to begin operational tests on this system?
        Answer. In January 2003, the President decided to capitalize on the
    demonstrated capabilities of the GMD element. His decision to allow
    concurrent defensive capabilities and continuing developmental testing
    is the basis for the Initial Defensive Capability (IDC) planned for
    September 30, 2004.
        MDA has established a joint organization, the Combined Test Force
    (CTF), to integrate the objectives of the operational tester--the
    warfighter--and the user into all developmental activities. Planning
    for formal operational testing continues; however, no final decision
    has been made regarding when to begin such testing.
        Question. When do you plan to test this system at night? When do
    you plan to test the system against a tumbling target? When do you plan
    to do a test with one or more decoys that resemble the target?
        Answer. Integrated Flight Test-10 (IFT) was planned to be a
    nighttime intercept; however, the EKV failed to separate from the
    booster, and an intercept was not attempted. MDA is currently looking
    at revising a future flight test to make up this missed IFT-10
    objective.
        GMD flight test complexity continuously increases as additional
    functionalities are added. Target signatures, countermeasures, and
    flight dynamics are in concert with the current threat estimates.
        Question. When do you plan to test the system against a target
    without a beacon or GPS transponder? When do you plan to test the
    system without advance target trajectory and characterization
    information?
        Answer. The beacon is one of several artificialities to be deleted
    from the test program as the system matures and additional elements
    come on line. The actual point in the test program at which beacons or
    GPS data will no longer be used has not yet been determined. The C-Band
    beacon is currently required for range safety and truth data purposes
    until the various system radars are fully developed. Due to the lack of
    an X-Band Radar (XBr) or Upgraded Early Warning Radar (UEWR) in the mid
    Pacific, target RVs in current flight tests are equipped with a C-Band
    beacon which is tracked by the FPQ-14 range radar in Hawaii to generate
    the weapons task plan and to give the interceptor a box in space at
    which to aim. The flight test program to date has focused on proving
    and refining hit-to-kill technology, the cornerstone of GMD's mission.
    Providing the exoatmospheric kill vehicle (EKV) with target trajectory
    and characterization information in advance allows us to develop this
    essential capability without having to wait until necessary BMDS radars
    and other sensor are in place. The GMD flight test program is
    constantly under review and evolving as we gain more experience and
    knowledge.
        IFT-21 is planned to be a ``pop quiz'' test. Current plan for IFT-
    21 is to withhold the exact launch time until the day of test.
    Additionally, the target type will be known, but the target complex
    will not be known a prior; however, all components in the complex will
    have been previously characterized and flown in a flight test.
        It is important to note however, that, in the event of a hostile
    missile launch, the BMDS will have targeting information in real time.
    The Block 2004 system will have hostile missile launch early warning
    and cueing from space-based infrared satellites. The predicted time and
    location in space where the intercept will occur is calculated in real-
    time from data provided by tracking radars (i.e., Cobra Dane, Upgraded
    Early Warning Radars, the Navy's Aegis cruisers and destroyers, and the
    Sea-Based X-band radar). Based on this real-time information, targeting
    data is selected from a database and uploaded to the interceptor prior
    to launch.
        Question. Will any of these tests occur before deploying the
    system?
        Answer.
        Re: operational tests (OT).--Formal OT will not occur before
    September 30, 2004.
        Re: night test.--MDA is currently examining this issue and hopes to
    include this objective in an upcoming flight test.
        Re: decoys that resemble the target.--Target signatures,
    countermeasures, and flight dynamics are in concert with the current
    threat estimates.
        Re: without C-Band transponder & GPS.--The C-Band beacon is
    currently required for range safety purposes and truth data, and as
    such, it cannot be eliminated from testing; however, it is one of the
    artificialities that will be removed by development and construction of
    the BMDS Test Bed.
        Re: without advance target trajectory and characterization
    information.--No. IFT-21, the first pop quiz, is currently scheduled
    for 2Q fiscal year 2006.
        Question. When will the X-band radar be operational? When will the
    SBIRS-Low and SBIRS-High be operational? How will the missile defense
    system track and discriminate targets without these key components?
        Answer. The Sea-Based X-Band Radar (SBX) will be integrated into
    the Block 2004 BMDS Test Bed during 4Q fiscal year 2005.
        SBIRS Low [renamed Space Tracking and Surveillance System (STSS)]
    is an R&D effort to demonstrate the value of midcourse tracking to the
    BMDS. No decision to field an operational system has been made. The
    first two R&D satellites will be field in fiscal year 2007 to support
    the Block 2006 test bed and demonstrate closing the fire control loop
    with BMDS interceptors.
        Please note SBIRS-High is a USAF program. The following response
    has been provided from USAF. The SBIRS-High development will field
    incremental increases in military utility for each of its mission
    areas--missile warning, missile defense, technical intelligence, and
    battlespace characterization. SBIRS supports MDA IDO requirements
    within the fiscal year 2005 BMDS need. Interim support will be
    available beginning October 4 and fully integrated support is scheduled
    to be in place April 2005. Major milestones related to certification of
    missile warning messages will be leveraged by SBIRS High missile
    defense supporting capabilities beginning with HEO certification in
    fiscal year 2005, GEO certification in fiscal year 2007, and multi-
    satellite certification in fiscal year 2009. SBIRS-High will be fully
    capable at Increment 2 completion in fiscal year 2010.
        The critical functions to be performed by an XBR are to detect,
    acquire, track, and discriminate. Other radars--including the Cobra
    Dane at Shemya, Alaska; the Beale UEWR in California; and the Navy's
    Aegis--contribute to the performance of these functions to a greater or
    lesser degree. Discrimination is the function, which most depends on
    the XBR, but even this function is duplicated, specifically by the
    EKV's on-board sensors and computer. Even with a system including an
    XBR, the final discrimination and target selection will be performed by
    the EKV.

                       IOWA ARMY AMMUNITION PLANT (IAAP)

        Question. The fiscal year 2001 defense authorization bill and the
    fiscal year 2002 defense appropriation bill required the Department to
    determine exposures at the Iowa Army Ammunition Plant (IAAP) and to
    notify current and former employees of the Army side of the plant of
    possible exposures to radioactive or hazardous substances. The
    appropriations reports from those years funded a health study of Army
    workers at IAAP, including screening of all workers for chronic
    beryllium disease. A report dated August 20, 2002, from Deputy
    Secretary Paul Wolfowitz included a letter to the employees, and said
    that medical surveillance of former workers at IAAP should begin in
    December 2002.
        How many workers at IAAAP have been sent the required notification?
        Answer. None. The Army received the final version of the security
    release at our meeting May 23, 2003. When contacting the Department of
    Energy (DOE) cohort in December 2001 and January 2002, the Army
    included President Clinton and Secretary Richardson's release to speak
    regarding nonclassified issues. Through this process, the Army
    contacted 2,954 former DOE workers or survivors of workers for whom the
    Army had a known address. In conjunction with this mailing, the Army
    contacted an additional 7,786 employees we had assumed were DOD
    employees to give them an opportunity to indicate to us if they had
    worked on line 1. The Army has not yet sent out the Secretary of
    Defense security release notice signed by Mr. Wolfowitz. The Army is
    planning to send that out as a separate mailing along with our cover
    letter and work history questionnaire. Certainly anyone we contact by
    mail in the meantime will be given the notification.
        Question. What is the status of the health screening, including for
    chronic beryllium disease? What is the current timeline for the
    project?
        Answer. The American Institute of Biological Sciences review should
    take eight weeks. The Army will need to resubmit the revised protocol
    to the University of Iowa Institutional Review Board for review of the
    modifications.
        They may suggest a full board review, which could take a week to
    one month. Once approved, gearing up should go quickly. The Army
    anticipates starting screening of the current workforce of about 1,000
    at a rate of about 250 per month so it would take about four months.
    The Army predicts a late September or early October start date for
    screening. Concurrently we are pursuing access to the IH data to
    finalize the work/medical history questionnaire and get it in the mail
    to begin working with the former workers in March of 2004. The Army can
    screen former workers at a rate of 100 per month at startup. This
    screening of former workers can be ramped up depending on the total
    number to be screened and the extent of screening to be performed, all
    based on the protocol currently under review.
        Question. A recent report to Congress on cleanup activities at the
    IAAP suggested that only paperwork would take place this year
    (including important groundwater modeling), and said that further soil
    cleanup has been delayed due to insufficient funding. Contrary to a
    July 11, 2002, letter to me from Office of Management and Budget
    Director Mitchell E. Daniels, Jr., Phase 4 soil cleanup is not
    scheduled to be completed until 2004 and 2005, with further cleanup
    activities extended many years after that.
        What is needed to accelerate cleanup at IAAP? How much funding is
    needed to complete Phase 4 soil cleanup?
        Answer. The Army recently conducted a Program Review of the IAAP
    restoration program and concluded that the installation met several
    criteria that made it an ideal candidate for implementation of a
    performance-based contract strategy. We do not believe that we can in
    fact accelerate the work effort in fiscal year 2004. The conversion to
    a performance-based contract is planned to begin in fiscal year 2004
    and is expected to improve schedule implementation and control
    financial liabilities. The implementation of this new contract vehicle
    is fully expected to accelerate the work efforts once in place.
        The current planned funding level of $150,000 for fiscal year 2004
    will be sufficient to complete the Phase 4 soils effort. This
    information, of course, is based on what is currently known about the
    sites. Conditions may change once actual soil removal begins this
    fiscal year, however, substantive changes in cost are not expected.
        Question. Has inclusion of IAAP in the FUSRAP program delayed or
    accelerated cleanup of contaminants at the plant?
        Answer. The inclusion of IAAP in the FUSRAP has not delayed the
    cleanup of contaminants at the plant. Acceleration of the cleanup can
    be achieved if the FUSRAP cleanup execution schedule is concurred with
    by the regulators and stakeholders (USEPA Region VII project manager,
    Iowa Department of Health, and other concerned/interested
    stakeholders), and all the stakeholders work as a team to achieve the
    cleanup effort. Phase 4 and 5 soils clean up would have been delayed
    until fiscal year 2007 or fiscal year 2008 start date without FUSRAP
    designation.
        Question. You have proposed specific exemptions for the Department
    from several environmental laws. IAAAP is a Superfund site, and
    provides habitat for one known endangered species, but I have had
    trouble getting answers on the implications of your proposal for this
    plant.
        Would any of the exemptions you have proposed apply to part or all
    of the IAAP site?
        Answer. There are five proposals included in DOD's Readiness and
    Range Preservation Initiative. These five proposals are essential to
    range sustainment and reaffirm the principle that military lands,
    marine areas, and airspace that have been set aside for military use
    exist to ensure military preparedness, while ensuring that the
    Department of Defense remains fully committed to its stewardship
    responsibilities. The five provisions:
      --Authorize use of Integrated Natural Resource Management Plans in
            appropriate circumstances as a substitute for critical habitat
            designation under the Endangered Species Act;
      --Reform obsolete and unscientific elements of the Marine Mammal
            Protection Act, such as the definition of ``harassment,'' and
            add a national security exemption to that statute;
      --Modestly extend the allowable time for military readiness
            activities like bed-down of new weapons systems to comply with
            Clean Air Act;
      --Limit regulation of munitions on operational ranges under the
            Comprehensive Environmental Response, Compensation, and
            Liability Act (CERCLA) if and only if those munitions and their
            associated constituents remain there, and only while the range
            remains operational; and
      --Limit regulation of munitions on operational ranges under the
            Resource Conservation and Recovery Act (RCRA) if and only if
            those munitions and their associated constituents remain there,
            and only while the range remains operational.
        Because IAAP provides habitat for one known endangered species, the
    Endangered Species Act proposal could apply if U.S. Fish and Wildlife
    Service were to propose any installation lands as critical habitat. The
    Marine Mammal Protection Act proposal is not applicable. The Clean Air
    Act proposal could apply to any new military readiness activities
    planned for IAAP in the future. The proposal would allow three years
    for those activities to meet the requirements of section 176(c) of the
    Clean Air Act. The CERCLA and RCRA proposals would apply to only
    operational ranges at IAAP.
        Question. Would your proposal remove part or all of the IAAP site
    from the Superfund program?
        Answer. No, Defense Department proposals for Readiness and Range
    Preservation would not remove IAAP from the Superfund Program. DOD's
    RCRA and CERCLA legislative proposals clarify when RCRA and CERCLA
    apply at the military's operational ranges. IAAP is addressing
    contamination from ammunition assembling operations, which is distinct
    from operational range activities.

                                     ______

                Questions Submitted by Senator Richard J. Durbin

                               932ND AIRLIFT WING

        Question. The Air Force is currently in the process of retiring the
    C-9 aircraft used for aero medical evacuation. Scott Air Force base has
    both an active and a Reserve wing, the 932nd Airlift Wing, which have
    carried out this mission.
        I am very concerned that C-9s will be retired and the Reservists'
    mission mostly disbanded. These Reservists have served for a many
    years, and are part of the community. Several hundred Reservists will
    be left with no mission, and they are unlikely to move to find another
    Reserve mission. I think our Reservists deserve better treatment.
        The statistics that I have seen show that the peacetime domestic
    aero medical evacuation mission has been reduced because TRICARE allows
    many military patients to be cared for at local medical facilities.
    Yet, even by the beginning of the war with Iraq, the C-9s were quite
    busy--the 932nd Airlift Wing has flown 70 percent of its flying hours
    over only 6 months of the fiscal year--as of March 31, 2003 the 932nd
    flew 1,888 hours of a 2,700 hour program. I am concerned that this unit
    is being disbanded based on peacetime, not wartime need. I understand
    that some of these flying hours were for mixed transportation missions.
        I would like to work with you in finding a solution to retain the
    932nd Airlift Wing at Scott Air Force Base. I suggest the following
    alternate plan:
      --Phase out the C-9s instead of precipitously retiring them over the
            next 5 months.
      --Use fewer C-9s, but use those that have recently come out of depot,
            saving operating costs.
      --Use C-40 aircraft in the future for a mixed mission of cargo and
            passenger transport, as well as patient movements to replace
            the C-9 aircraft.
        Mr. Secretary, will you work with me on this plan or some other
    plan so that the 932nd Airlift Wing is not left without a mission?
        Answer. On behalf of the Secretary of Defense, thank you for your
    concerns regarding the Air Force's readiness capability for aeromedical
    evacuation and 932nd Airlift Wing.
        The C-9A has been a valuable asset in the Air Force inventory, but
    under our new aeromedical evacuation concept a dedicated platform is no
    longer required. Extending the airplane's service beyond the end of
    fiscal year 2003 would require the use of operations and maintenance
    funds dedicated to higher priorities. We acknowledge the contributions
    of the active duty, reserve, and civilian personnel who have served so
    nobly in support of the aeromedical evacuation mission and we are
    diligently examining other options for these airmen. However, we must
    balance the impact of these aircraft retirements against the demands to
    provide for the national defense. Competition for funding is
    particularly keen, and priority will be given to requirements
    supporting reconstitution from recent contingency operations as well as
    transforming the Air Force. Resources used to extend the C-9s would be
    particularly difficult to justify since a dedicated aeromedical
    evacuation platform is no longer needed.
        I appreciate your continued support as the Air Force works to
    modernize our air and space capabilities. Our goal is to balance
    prioritized requirements with available resources to produce an
    efficient, cost-effective Air Force. We value your interest and support
    in this important endeavor.

                                     ______

                Questions Submitted by Senator Dianne Feinstein

        Question. For fiscal year 2004 the administration is seeking $379.9
    billion for the Defense Department and has projected an average
    increase of roughly $20 billion per year over the next five years, a 32
    percent increase above current levels. These dramatic increases do not
    fully cover actual combat and peacekeeping operations in Iraq and
    Afghanistan.
        Since these operations are not fully covered in the budget, what do
    you believe the full costs will be to maintain robust and effective
    peacekeeping forces in Iraq and Afghanistan for the coming year?
        Answer. We cannot yet estimate those costs for the coming year. As
    soon as we do have an estimate, we will need to discuss with the
    President how to cover those costs.

                       HIGH ALERT STATUS NUCLEAR WEAPONS

        Question. Under the recently approved Moscow Treaty, the United
    States and Russian Federation have agreed to reduce each nation's
    nuclear arsenal by 3,200-3,700 nuclear warheads. These weapons, even
    while designated for destruction, continue to operate on ``high alert
    status.''
        Do you believe these weapons can and should be removed from ``high
    alert status'' pending their elimination?
        Answer. Under the recently approved Moscow Treaty, the United
    States and Russian Federation have both agreed to reduce their number
    of operationally deployed strategic nuclear warheads to 1,700-2,200 by
    December 31, 2012. The nuclear weapons stockpile's composition, size,
    and warhead configuration (Active or Inactive) will be determined as
    part of the periodic assessment process established by the Nuclear
    Posture Review (NPR). Operationally deployed nuclear warheads remain at
    an alert status consistent with national security requirements.
        Dealerting (removing from ``high alert'') concepts have been
    studied in great detail over the years. Our heavy bombers were removed
    from nuclear alert a decade ago. Other dealerting proposals have been
    judged not to be in the United States' interest and in many cases could
    add instability under certain circumstances.
        With regard to concern about accidental or unauthorized launch by
    U.S. forces, our Intercontinental Ballistic Missiles (ICBMs) and
    Submarine Launched Ballistic Missiles (SLBMs) are highly secure.
        With regard to concerns about accidental or unauthorized a launch
    by foreign forces, the NPR that was sent to Congress in January 2002
    specifically reviewed dealerting and reaffirming the decision of the
    previous administration not to dealert U.S. ballistic missile forces.
        Question. If they were removed from ``high alert status'' what are
    the potential cost savings?
        Answer. There are numerous options for removing nuclear systems
    from alert, but none of the options would result in meaningful cost
    savings.
        Most of the costs for strategic nuclear systems are derived from
    the infrastructure investment in delivery systems and their associated
    warheads, and from the manpower costs necessary to maintain and operate
    these systems safely.
        De-alerting these systems, whether it is by something as complex as
    physically removing the warheads from the delivery systems or something
    as relatively simple as removing a critical component in the firing
    sequence, would not reduce the infrastructure or operating costs.
        However, some dealerting proposals could require the expenditure of
    additional money (1) to construct devices that would limit the ability
    to launch a bomber or ballistic missile while allowing for its lawful
    and timely execution under Presidential direction, or (2) to provide
    for additional manpower required for verification of the dealerting
    concept were it to be employed.

                        ROBUST NUCLEAR EARTH PENETRATOR

        Question. As the United States attempts to diplomatically engage
    countries such as India and Pakistan to convince them to relinquish
    their nuclear ambitions, why should the Congress authorize $15 million
    to study a weapon such as the Robust Nuclear Earth Penetrator, which
    could undermine our efforts to limit proliferation internationally?
        Answer. Studying the feasibility of using an existing weapon to
    place at risk hard and deeply buried targets associated with weapons of
    mass destruction will not undermine our efforts to limit proliferation
    internationally. Nations seek and develop nuclear capabilities to
    address their regional security concerns, not because the United States
    has nuclear weapons. Nuclear weapons readiness and capabilities will
    continue to play a key role in U.S. national security policy and
    strategy well into the future. Today, as well as in the future, the
    United States cannot predict with confidence what nations or non-state
    actors may pose a threat to our vital interests or those of our allies.
    The United States must possess forces sufficient to dissuade and deter
    any potential adversary armed with WMD. Studies aimed at finding cost-
    effective ways to place facilities associated with WMD at risk--like
    the RNEP study--are fully consistent with maintaining an effective
    deterrent.
        In the 1960s, there were five nuclear weapons states: the USSR,
    Britain, France, China, and the United States. Today, at least 12
    states possess nuclear weapons. Others are seeking nuclear weapons. The
    United States is making every effort to dissuade these nations from
    acquiring WMD. The U.S. nuclear deterrent plays a role in this effort
    by assuring our allies and friends that the United States intends to
    maintain its forces to deter any future aggression and persuade
    potential aggressors to halt developments.
        As the United States reduces the number of strategic, operationally
    deployed, weapons by two-thirds by 2012, we increasingly will have to
    look at options for more effective weapons for deterrence and achieving
    our defense goals, including programs like RNEP--a study of two
    existing gravity bombs repackaged to enhance survivability against hard
    and deeply-buried facilities. We have not abandoned conventional
    weapons to deal with the WMD facilities; rather, we have enhanced our
    conventional capabilities. We will need both advanced conventional and
    nuclear options to furnish the options we need to meet our defense
    policy goals.

            UTILITY OF ROBUST NUCLEAR EARTH PENETRATOR CLASS WEAPONS

        Question. What military utility does this new class of weapons
    have?
        Answer. Nuclear weapons have been and likely always will be viewed
    as necessary to dissuade and deter the worst of threats to U.S.
    national security, particularly the threat of weapons of mass
    destruction use against us or our friends and allies. Those who may
    contemplate aggression against U.S. territory, troops, allies, and
    friends have learned from past conflicts and adapted new defensive
    postures against our weapon systems used a decade ago in Desert Storm.
    The war with Iraq demonstrated the effectiveness of U.S. technology.
    Technology, however, is perishable. New weapons, tactics, and
    technologies must be fielded to ensure the continued effectiveness of
    U.S. forces and our ability to deter weapons of mass destruction use.
    We must assure that potential adversaries cannot create a sanctuary by
    building hard and deeply buried facilities. We need to furnish
    effective options for the President to hold at risk confidently the
    most protected of capabilities that threaten U.S. territory, forces,
    allies, and friends--which may only be possible with RNEP-like
    capability.
        The capability technically of a conventional bomb to achieve the
    structure shock effects necessary to destroy a growing class of hard
    and deeply buried targets is limited. It can be enhanced by obtaining
    exquisite intelligence on, proper delivery to, and targeting of key
    points such as target facility entrances, vents, and other nodes for
    functional disruption. However, as the depth of these targets
    increases, the ability to hold them at risk decreases to a point where
    conventional weapons are no longer effective even when the precise
    location and nature of the facility is known. If RNEP delivery, impact,
    and penetration are made comparable to today's conventional bombs,
    ground shocks produced by the nuclear blast are propagated hundreds of
    feet into the earth to address deeply buried facilities in regions
    where conventional weapons have no capability.
        Question. In the fiscal year 2004 budget, there is a request for an
    exemption of further operational testing of the ballistic missile
    defense system. In March, the Undersecretary of Defense, Edward
    Aldridge announced, ``It was not our intent to waive operational
    testing.''
        If the intent was to not exempt testing prior to fielding the
    weapons system, what was the purpose of the exemption request?
        Answer. The question refers to proposed section 8061, which reads
    in full:

        ``Sec. 8061. Funds available to the Department of Defense under the
    heading, ``Research, Development, Test and Evaluation, Defense-Wide''
    may be used to develop and field an initial set of missile defense
    capabilities, and such fielding shall be considered to be system
    development and demonstration for purposes of any law governing the
    development and production of a major defense acquisition program. The
    initial set of missile defense capabilities is defined as `Block 04'
    Ballistic Missile Defense system fielded in fiscal year 2004 and 2005.
    Subsequent blocks of missile defense capabilities shall be subject to
    existing laws governing development and production of major defense
    acquisition programs.''

        The Department's version of section 8061, quoted above, confirms
    the developmental nature of the initial set of missile defense
    capabilities. Because Block 04 remains in system development and
    demonstration, the use of Research, Development, Test and Evaluation
    funds to pay for the development and fielding of the system is
    appropriate, and the Department ultimately must complete operational
    test and evaluation of the system.
        Question. Does testing under the guidelines of the Testing and
    Evaluation department negatively impact the program?
        Answer. No, the program is not negatively impacted by DOT&E testing
    guidelines. MDA and DOT&E have established an effective working
    relationship. DOT&E is a member of the Missile Defense Support Group
    and provides testing advice to the Director, MDA and to USD (AT&L).
    Additionally, DOT&E produces a congressionally directed annual report
    on the status and effectiveness of the MDA test program.

                                    TESTING

        Question. Recently, the Missile Defense Agency cancelled Integrated
    Flight Test-16, which was dubbed the ``dress rehearsal for
    deployment.'' This test was intended to increase the agency's knowledge
    regarding the feasibility and effectiveness of GMD's initial defensive
    capability. In addition, three more test scheduled for the coming years
    have also been canceled bringing the total number of canceled tests
    disclosed this year to nine.
        Do you believe the system has received sufficient testing to be
    proven feasible and effective enough to be deployed?
        Answer. MDA is confident that the overall BMDS test program is
    scoped to provide an effective defense against ballistic missiles of
    all ranges. Additionally, MDA is always reexamining the GMD flight test
    program to ensure that proven critical components and technologies will
    be resident in the Block 2004 BMDS Test Bed.
        Question. Our experiences in Operation Enduring Freedom and now
    Operation Iraqi Freedom have demonstrated the need for strategic lift
    able to access all theaters of the battlefield, regardless of the size
    and quality of available airstrips.
        With the armed forces relying on the C-17 to fulfill many of these
    missions, are there sufficient numbers of C-17's in the inventory to
    fulfill your requirements? If not, how many additional aircraft will be
    needed?
        Answer. The Mobility Requirement Study 2005 (MRS05) established an
    airlift capacity requirement range between 51.1 and 54.5 Million Ton
    Miles per Day (MTM/D). Further evaluation during the Quadrennial
    Defense Review established the objective capacity at 54.5 MTM/D. This
    airlift capacity requirement includes strategic airlift, intratheater
    airlift, special operations, EUCOM requirements, as well as other CINC
    requirements. The current C-17 program achieves an inventory of 180
    aircraft in fiscal year 2008. At that time, the fleet will be at the
    desired capacity.

                                      F-22

        Question. Economic conditions in the former Soviet bloc may
    stimulate the proliferation of advanced military technology,
    particularly in regard to surface-to-air missiles and tactical aircraft
    like the Mig-29 and Su-27. Even though our current fighter aircraft
    have been successful in defeating various air defenses, they may not be
    capable of being modified to the extent needed to provide the stealth
    and other combat capabilities needed to cope with air defenses many
    countries may possess in future conflicts.
        Do you believe aircraft like the F-22 will be able to fill this
    role, ensuring air superiority and fulfilling the fighter/attack role
    in the decades to come?
        Answer. Yes. The F/A-22 is designed from the ``ground up'' to have
    the unique capability to operate in the presence of and suppress or
    destroy these anti-access adversary systems as required. The F/A-22's
    fundamental attributes of stealth, supercruise, advanced
    maneuverability, lethality, and integrated avionics will ensure Air
    Dominance in this decade and the decades to come. In future conflicts
    the aircraft will be essential for successful initial joint forcible
    entry and follow-on operations. The F/A-22 is a benchmark for
    Department of Defense and Air Force transformation efforts.
        Question. DOD Directive 1344.7 governs personal commercial
    solicitation on military installations. The Directive protects Service
    members from unfair business practices. I understand that DOD is in the
    process of amending the Directive. I am concerned that the changes
    being considered should not unnecessarily restrict the access of
    Service members to beneficial insurance and financial planning
    services. I understand the Department is committed to working with
    affected parties, including the insurance and financial services
    companies that solicit business on-base to develop new policy.
        Can you offer your assurance DOD will consult with affected parties
    prior to issuing any proposed draft regulation to ensure the service
    members continue to have access to competitive insurance and financial
    planning products and services?
        Answer. The Department intends to host two public fora to allow for
    comments by all those affected by the policy. The Department first
    intends to host a forum at which the public may express views about the
    current commercial solicitation policy. These comments will be
    considered in preparing the draft for publication and public comments
    as a proposed rule in the Federal Register. After publication, the
    public will be invited to comment on the draft at an additional forum.
    The Department will carefully consider the written and oral comments on
    the proposed rule in promulgating the final rule.

                                  PERCHLORATE

        Question. We have now written to you on three separate occasions
    since November of last year impressing upon you the urgency for the DOD
    to take an active leadership role in mitigating the contamination of
    drinking water by perchlorate, a chemical used in most DOD missiles and
    munitions.
        What steps are you taking to respond to our domestic public health
    problem that is a legacy of DOD operations over the past half century?
        Answer. The Department's goal has been and continues to be support
    of a national process leading to mitigation of risks from perchlorate.
    The Environmental Protection Agency (EPA) is currently engaged in a
    process of investigation intended to arrive at an acceptable level of
    perchlorate in the environment. The Department, the National
    Aeronautics and Space Administration (NASA), the Department of Energy
    (DoE) and non-governmental organizations have been actively working
    with the EPA over the past several years to develop scientifically-
    defensible decisions regarding perchlorate use, assessment, and
    cleanup. Since 1997, the Department has spent $2 million on research to
    assist the EPA in determining whether low-level perchlorate exposure
    poses a risk to the American public. In addition, the Department has
    invested considerable resources in the development of environmental
    treatment technologies for perchlorate, and has issued several
    significant research grants to identify possible substitutes for
    perchlorate in military applications. The Department is committed to
    using the best available science to inform public policies and
    decisions. The Department believes that the research undertaken by DOD,
    NASA, and EPA to evaluate the potential risks associated with
    perchlorate is a clear indication of that commitment. Pending
    promulgation of a cleanup standard, the Department will continue to
    work directly with state and local officials on the best strategies to
    safeguard our public water supplies.
        Question. You have argued for a transformation of the military; a
    clear need is transformation of the policies and actions that endanger
    our citizens as a result of practices of the DOD. Currently, the policy
    of the DOD towards the need for you to clean up a legacy of
    environmental pollution appears to be old fashioned thinking and not
    that of a modern defense establishment.
        When will you change the policy at the DOD and take positive
    action?
        Answer. The Department is committed to fulfilling the public's
    trust for protecting and restoring the natural and cultural resources
    on lands managed by DOD. The Department has an exemplary record of
    environmental stewardship and faithfully complies with all
    environmental laws and regulations. In addition, the Department has
    gone beyond legal requirements by funding and providing to EPA and
    state regulators important research that helps define the effect of
    perchlorate on human health. DOD has also conducted a number of surveys
    to ascertain perchlorate occurrence at DOD facilities since 1998, and
    issued policy allowing DOD components to sample for perchlorate at
    facilities where there is a reasonable basis to suspect both a
    potential presence of perchlorate and a pathway that could potentially
    threaten public health. My office is currently in the process of
    developing a more robust policy, which will be used for program
    planning and prioritization in advance of promulgation of a standard.
    The Department and EPA, in partnership with NASA and DOE, continue to
    work together to address unresolved science and science policy issues.
    The National Academy of Science is now scheduled to review the
    underlying science issues for a proposed standard. We have also
    conducted extensive studies in the technology required to cleanup
    perchlorate. These studies have developed technologies for and
    supported their use by U.S. industries. Several of these technologies
    are currently in use. DOD believes that information collected on
    potential presence of perchlorate and our long history of cooperation
    with EPA on resolving health science issues has served to augment and
    accelerate the EPA's regulatory process which will lead to an eventual
    standard.
        Question. I am very frustrated by the lack of response and absence
    of leadership on the part of the DOD and I would like to see this
    changed. My staff is prepared to work with your department and other
    agencies to find a solution.
        Whom is the point of contact for my staff to follow-up with to work
    towards resolving the problem of an absence of leadership within the
    DOD?
        Answer. The Assistant Deputy Under Secretary of Defense for
    Environment, Safety, and Occupational Health, Mr. John Paul Woodley is
    available to discuss the Department's position on this issue.

                              SUBCOMMITTEE RECESS

        Senator Stevens. Thank you, Mr. Secretary, General Pace,
    and Secretary Zakheim. The subcommittee will reconvene
    Thursday, May 15, to consider testimony from public witnesses
    concerning the President's budget request. Thank you very much.
        [Whereupon, at 12:34 p.m., Wednesday, May 14, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2004

                                  ----------

                             THURSDAY, MAY 15, 2003

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

                           NONDEPARTMENTAL WITNESSES

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

                   OPENING STATEMENT OF SENATOR CONRAD BURNS

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

                    Prepared Statement of Captain Ike Puzon

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

                       DEPARTMENT OF DEFENSE INITIATIVES

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

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

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

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

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

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

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

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

    Business Initiative
        Issue.--Many within the Pentagon feel that business models are the
    panacea to perceived problems with in military structure.
        Position.--Reservists have the unique perspective of holding two
    careers; many with one foot in business and one foot in the military.
    The Naval Reserve Association suggests caution rather than rush into
    business solutions. Attempted many times in the past, business models
    have failed in the military even with commands that proactively
    support.
        Among the problems faced are:
        Implementing models that are incompletely understood by director or
    recipient.
        Feedback failure: ``Don't tell me why not; just go do it!''
        The solution is often more expensive than the problem. Overburdened
    middle management attempting to implement. Cultural differences.
        While textbook solutions, these models frequently fail in business,
    too.

    Retirement: Age 55
        Issue.--A one sided debate is being held through the press on
    whether changes should be allowed to Guard and Reserve to lower the
    retirement payment age. At a recent Pentagon press conference, Thomas
    F. Hall, the Assistant Secretary of Defense for Reserve Affairs, said
    he has ``thought a lot about'' lowering reserve retirement age. Hall
    said it would be ``expensive'' and might encourage Reservists to leave
    the workforce at too young an age. The Defense Department is now
    studying the issue to be part of a report to Congress next year.
        Position.--Over the last two decades, more has been asked of
    Guardsmen and Reservists than ever before. The nature of the contract
    has changed; Reserve Component members would like to see recognition of
    the added burden they carry. Providing an option that reduces the
    retired with pay age to age 55 carries importance in retention,
    recruitment, and personnel readiness.
        Most military associations are hesitant to endorse this because
    they envision money would be taken out of other entitlements, benefits,
    and Guard and Reserve Equipment budgets. The Naval Reserve Association
    suggests an approach to this issue that would not be that
    ``expensive.''
        The Naval Reserve Association recommends for discussion/debate that
    Reserve Retirement with pay prior to age 60 be treated like taking
    Social Security retirement early--if you elected to take it at say age
    55, you take it at an actuarially reduced rate.
        Most of the cost projected by DOD is for TRICARE healthcare, which
    begins when retirement pay commences. Again, if one takes Social
    Security before reaching age 65 they are not eligible for Medicare. NRA
    suggests that TRICARE for Reservists be decoupled from pay, and
    eligibility remains at age 60 years. With Social Security as a model,
    Reservists understand the nature of offsetting payments. The real
    expense in this proposal would be the administrative startup costs and
    whatever would be lost in interest crediting in the retirement trust
    fund.
        Retention concerns should be set aside. Commissioned officers
    typically reach ROMPA limits at age 53. While enlisted are allowed to
    drill to age sixty, many in the Navy are limited by High Year Tenure
    policies that take them out of pay before then. When this happens, many
    submit their retirement without pay requests. By age 50, an enlisted
    has either already retired or is career.
        At a minimum, hearings should be held to broaden the debate.

                       DEPARTMENT OF THE NAVY INITIATIVES

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

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

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

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

                                   CONCLUSION

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

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

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

               Prepared Statement of Deirdre Parke Holleman, Esq.

                                  INTRODUCTION

        Mister Chairman and distinguished members of the Committee, the
    National Military and Veterans Alliance (NMVA) is very grateful for the
    invitation to testify before you about our views and suggestions
    concerning defense funding issues.
        The Alliance was founded in 1996 as an umbrella organization to be
    utilized by the various military and veteran associations as a means to
    work together towards their common goals. The Alliance's organizations
    are: American Logistics Association, American Military Retirees
    Association, American Military Society, American Retiree Association,
    American World War II Orphans Network, AMVETS National Headquarters,
    Catholic War Veterans, Class Act Group, Gold Star Wives of America,
    Korean War Veterans Foundation, Legion of Valor, Military Order of the
    Purple Heart, National Association for Uniformed Services, National
    Gulf War Resource Center, Naval Enlisted Reserve Association, Naval
    Reserve Association, Non Commissioned Officers Association, Society of
    Medical Consultants to the Armed Forces, Society of Military Widows,
    The Retired Enlisted Association, TREA Senior Citizens League, Tragedy
    Assistance Program for Survivors, Uniformed Services Disabled Retirees,
    Veterans of Foreign Wars, Vietnam Veterans of America.
        The preceding organizations have almost five million members who
    are serving our nation, or who have done so in the past and their
    families.
        The overall goal of the National Military and Veteran's Alliance is
    a strong National Defense. In light of this overall objective, we would
    request that the committee examine the following proposals.
        current and future issues facing uniformed services health care
        The National Military and Veterans Alliance must once again thank
    this Committee for the great strides that have been made over the last
    few years to improve the health care provided to the active duty
    members, their families, survivors and Medicare eligible retirees of
    all the Uniformed Services. The improvements have been historic.
    TRICARE for Life and the Senior Pharmacy Program have enormously
    improved the life and health of Medicare Eligible Military Retirees
    their families and survivors. DOD's new Medicare Eligible Retiree
    Health Care Fund has been put into place. This addition should help
    stabilize funding for military health care in the future. Additionally,
    reducing the catastrophic cap, improving the TRICARE Prime Remote
    program and making other TRICARE improvements have improved the
    situation of numerous other TRICARE beneficiaries. It has been a very
    successful few years. But there are still many serious problems to be
    addressed:

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

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

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

                     NATIONAL GUARD AND RESERVE HEALTH CARE

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

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

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

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

                     OTHER RESERVE/GUARD ISSUES (LONG-TERM)

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

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

                OTHER RESERVE/GUARD RECOMMENDATIONS (SHORT-TERM)

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

                                   CONCLUSION

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

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

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

                    Prepared Statement of Benjamin H. Butler

                                  INTRODUCTION

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

    Survivor Benefits Program (SBP) Improvements

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

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

                Survivor Benefits Program/Dependency and Indemnity
                        Compensation Offset
        The National Association for Uniformed Services strongly urges
    funding for S. 585. Currently, if the retired military sponsor, who
    enrolled in the Survivor Benefits Program, dies of a service-connected
    disability, the surviving spouse is eligible for both the SBP annuity
    and Dependency and Indemnity Compensation (DIC) from the Department of
    Veterans Affairs. However, the SBP annuity is offset by the full amount
    of the DIC annuity. Each program's purpose is different, SBP's goal is
    to provide for the loss of the sponsors earned retired pay, and DIC's
    goal is to provide the surviving spouse compensation for the loss of
    their spouse due to injuries caused by his/her service to the country.
    Defense Commissary Agency Funding and Staffing
        The active duty service member continues to rate the Commissaries
    as a top benefit of the Quality of Life and Family Program portion of
    the military pay and compensation package. The 2002 Active Duty Status
    of Forces Survey gave the Exchange and Commissaries a 67 percent
    satisfaction rating. And yet, the Commissaries and Exchanges are still
    under attack, during a time when our highly trained and motivated
    military forces are away from their home bases. How can we justify
    attacking their families' convenient access to high quality food at
    savings that approach 30 percent?
        Issue.--Why would the Department of Defense want to reduce the
    commissary benefit at its greatest time of need? The answer is money.
    DOD wants to reduce the subsidy for the commissary system that provides
    food and other essentials to troops and families around the world,
    which will end up in the military community losing the benefit.
        Position.--The National Association for Unformed Services strongly
    urges you to continue to provide the funding for the Commissary Subsidy
    to sustain the current services, which garnished a 67 percent approval
    rating, provided to the men and women protecting our nation.
    Commissaries are a key component of the military pay and compensation
    package. Any action that reduces the benefit means a diminished quality
    of life and more out of pocket costs.
        Issue.--The Defense Commissary Agency has already begun the process
    of eliminating 2,650 personnel positions and reducing its funding by
    $137,000,000 for fiscal year 2003.
        Position.--NAUS believes that a reduction of this size will degrade
    the quality of the benefit by eliminating smaller commissaries and
    reducing days and hours of operation.
        Issue.--The Department of Defense is planning the consolidation of
    the Armed Services three-exchange services into one single entity,
    though still retaining the ``look and feel'' of each store and
    maintaining the service culture to which the patrons are accustomed.
    The goal again, is to save money by elimination of redundant overheads,
    delivery systems, and the power of economy of scaling purchasing.
        Position.--NAUS does not endorse a consolidation, especially if
    consolidation is for consolidation's sake. Streamlining, improving
    internal operations and implementation of cost saving measures must not
    reduce the value of the benefit.
        NAUS supports funding for system studies, but not an accelerated
    consolidation.
        Summary.--We all understand the importance of saving scarce
    taxpayer's dollars. Every taxpayer dollar collected must be used wisely
    to keep down the amount of taxes the government collects; this is only
    common sense. Therefore, every government agency, department or system
    must be as efficient as possible. For example, the leaders of the
    commissary system have been and are continuing to make internal changes
    to improve efficiencies and reduce overhead operating costs. DOD should
    be setting goals, not mandating changes.

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

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

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

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

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

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

                DOD and VA Subvention
        The attempt of Medicare subvention (having Medicare pay for
    treatment of its beneficiaries at MTFs) with the DOD has been a huge
    disappointment. The Department of Defense has received no stream of
    payments. Medicare's required level of effort'' has never been reached
    by an MTF. But this goal should not be abandoned. The active duty
    member, his or her working spouse, the Veteran and the Military Retiree
    have all spent their working careers paying money into the Medicare
    system. The taxes have been paid but if they receive treatment in a MTF
    or a VA hospital or clinic the facility receives nothing from Medicare
    to help pay for that beneficiary's services.
        Position.--The financially strained medical systems of the VA and
    DOD should receive some of the support their patients have paid. Again,
    if DOD and the VA adopted Medicare's billing system it could support an
    effective attempt at subvention.
    Active and Reserve
        The most important element of military readiness is a high quality
    force. The quality force that we have fighting for us today is the
    result of over twenty years of effort. The National Association for
    Uniformed Services doesn't want to see these gains lost.
        We understand that DOD plans budget cuts, with the services again
    looking at end strength reductions especially in the Reserve Components
    at a time that we are fighting a war against multiple undefined
    terrorist factions.
        We request that you consider language in the appropriations bill to
    direct DOD to cease further reductions in both Active and Reserve
    components until the threats to our Nation are properly determined and
    a National Defense Strategy is clearly defined. We shouldn't forget the
    needs of our Soldiers, Sailors, Marines and Airmen in the field.
    Quality of life includes quality on the job. The National Association
    for Uniformed Services supports a 4.1 percent pay raise for all seven
    of the Uniformed Services. We further support targeted pay raise
    proposals for enlisted members in grades E-5 to E-9, and selected
    warrant officers.
        Additionally, NAUS feels that it is important to invest defense
    dollars for equipment procurement beyond the administration's budget.
    The service chiefs have provided non-funded requirements for both the
    active and Reserve components that will be needed by our people in the
    near future.
        We ask that funds be provided utilizing the National Guard and
    Reserve Equipment Account. While the Senate has pressured to reduce the
    NGREA, the services have failed in their responsibility to budget for
    Reserve equipment; until this is resolved we believe the NGREA should
    be used for this purpose.
        Reserve members were quick to step forward; some have already
    sacrificed their lives during this war as part of this nation's total
    force. In recognition, we ask for parity between active and reserve
    components when it comes to pay and compensation and retirement. We
    encourage this committee to support future hearings dealing with pay
    and compensation as these proposals are developed.
        NAUS believes that funding lifelong medical and dental care for all
    of the uniformed service beneficiaries, regardless of age, Active or
    Reserve status or location, supports the goal of mobilization
    readiness. But we would like to call attention to the ongoing need of
    funding TRICARE providers and, in turn, supporting the troubled TRICARE
    network.
        This is especially hard on the families of reservists who don't
    relocate when their warriors are mobilized. We hope the committee will
    support monies for military treatment facility subvention and
    utilization of veterans affairs hospitals as TRICARE providers.
    Transformation
        The Secretary of Defense's office is conducting a series of studies
    emphasizing transformation, relying on costly, undeveloped
    technologies, seeking dollar savings by reducing end strength in a
    flexible, adaptive fighting force.
        The first suggested legislation has been released entitled the
    ``Defense Transformation for the 21st Century Act of 2003.'' While
    Secretary of Defense Rumsfeld's staff has attempted to come up with new
    solutions to old problems, blanket implementation may result in
    unintended consequences.

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

                                   CONCLUSION

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

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

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

                     Prepared Statement of Dennis M. Duggan

        Mr. Chairman, The American Legion is grateful for the opportunity
    to present its views regarding defense appropriations for fiscal year
    2004. The American Legion values your leadership in assessing and
    appropriating adequate funding for quality-of-life, readiness and
    modernization of the Nation's armed forces.
        Once again, the United States is involved in two wars--the war
    against terrorism and Operation Iraqi Freedom. American fighting men
    and women are proving that they are best-trained, best-equipped and
    best-led military in the world. As Secretary of Defense, Donald
    Rumsfeld has noted, the war in Iraq is part of a long, dangerous global
    war on terrorism. The war on terrorism is being waged on two fronts:
    overseas against armed terrorists and the other here protecting and
    securing the Homeland. Indeed, most of what we as Americans hold dear
    are made possible by the peace and stability, which the armed forces
    provide.
        The American Legion adheres to the principle that this Nation's
    armed forces must be well manned and equipped, not to pursue war, but
    to preserve and protect peace. The American Legion strongly believes
    that past military downsizing was budget-driven rather than threat
    focused. Once Army divisions, Navy carrier battle groups, and Air Force
    fighter wings are eliminated from the force structure, they cannot be
    rapidly reconstituted regardless of the threat or emergency
    circumstances. Military recruitment has also been sporadic in the face
    of obvious quality-of-life concerns, frequent and lengthy deployments,
    and the recession, in spite of the patriotic American spirit which has
    followed the terrorist attacks of September 11th.
        The Administration's budget request for fiscal year 2004 totals
    $2.2 trillion and authorizes $379.9 billion for defense or about 16.6
    percent of the budget. The fiscal year 2004 defense budget represents a
    $14 billion increase in defense spending over the current funding
    level. It also represents 3.4 percent of our Gross Domestic Product,
    more than the 3.3 percent in the fiscal year 2003 budget. Active duty
    military manpower end strength is 1,388,100, only slightly changed from
    the 1.37 million of fiscal year 2002. Selected Reserve strength is
    863,300 or reduced by about 25 percent from its strength levels during
    the Gulf War of 12 years ago..
        Mr. Chairman, this budget must contain funding to fight the war on
    terrorism, sustain military quality of life and continue to transform
    the military. A decade of overuse of the military and it's under-
    funding, however, will necessitate sustained investments. This budget
    must also address increases in the military endstrength of the
    Services, accelerate ship production, and funding for the concurrent
    receipt of military retirement pay and VA disability compensation for
    disabled military retirees.
        If we are to win the war on terror and prepare for the wars of
    tomorrow, we must take care of the Department's greatest assets--the
    men and women in uniform. They are doing us proud in Iraq, Afghanistan
    and around the world.
        In order to attract and retain the necessary force over the long
    haul, the military continues to look for talent in an open market place
    and to compete with the private sector for the best young people our
    nation has to offer. If we are to attract them to military service in
    the active and reserve components, we need to count on their patriotism
    and willingness to sacrifice, to be sure, but we must also provide them
    the proper incentives. They love their country, but they also love
    their families--and many have children to support, raise, and educate.
    We have always asked the men and women in uniform to voluntarily risk
    their lives to defend us; we should not ask them to forgo adequate pay
    and subject their families to repeated unaccompanied deployments and
    sub-standard housing as well.
        The President's 2004 defense budget requests $98.6 billion for
    military pay and allowances, including $3.7 billion for a 2 percent to
    6.3 percent pay raise and $300 million for the option for targeted pay-
    raises for mid-grade officers and NCOs. It also includes $4.2 billion
    to improve military housing, putting the Department on track to
    eliminate most substandard housing by 2007--several years sooner than
    previously planned. It will also lower out-of-pocket housing cost for
    those living off-base from 7.5 percent to 3.5 percent in 2004--so as to
    hopefully eliminate all out-of-pocket costs for the men and women in
    uniform by 2005.
        Together, these investments in people are critical, because smart
    weapons are worthless to us unless they are in the hands of smart, well
    trained Soldiers, Sailors, Airmen, Marines and Coastguardsmen.
        The American Legion's National Commander has visited American
    troops in South Korea, as well as a number of installations throughout
    the United States. During these visits, he was able to see first hand
    the urgent, immediate need to address real quality of life challenges
    faced by service members and their families. He has spoken with
    families on Womens' and Infants' Compensation (WIC). Quality of life
    issues for service members, coupled with heightened operational tempos,
    play a key role in the recurring recruitment and retention woes and
    should come as no surprise. The operational tempo and lengthy
    deployments must be reduced. Military missions were on the rise before
    September 11 and deployment levels remain high and the only way, it
    appears, to reduce repetitive overseas tours and the overuse of the
    Reserves is to increase military endstrengths for the services.
    Military pay must be on par with the competitive civilian sector. If
    other benefits, like health care improvements, commissaries, adequate
    quarters, quality child care, and impact aid for education are reduced,
    they will only serve to further undermine efforts to recruit and retain
    the brightest and best this nation has to offer.

                        QUADRENNIAL DEFENSE REVIEW (QDR)

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

                           PROCUREMENT/TRANSFORMATION

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

                                QUALITY OF LIFE

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

                               RESERVE COMPONENTS

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

                     HEALTH CARE FOR MILITARY BENEFICIARIES

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

                         OTHER MILITARY RETIREE ISSUES

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

                                   CONCLUSION

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

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

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

                     Prepared Statement of Wayne S. Sellman

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

           DEPARTMENT OF DEFENSE (DOD) SCIENCE AND TECHNOLOGY BUDGET

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

              BEHAVIORAL RESEARCH WITHIN THE MILITARY SERVICE LABS

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

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

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

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

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

                         OFFICE OF NAVAL RESEARCH (ONR)

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

                      AIR FORCE RESEARCH LABORATORY (AFRL)

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

                                    SUMMARY

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

                             DEPARTMENT OF DEFENSE

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

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

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

                       Prepared Statement of Richard West

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

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

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

                  Prepared Statement of Dr. Stephen L. Hoffman

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

                 IMPACT OF INFECTIOUS DISEASES ON THE MILITARY

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

                THE MILITARY INFECTIOUS DISEASE RESEARCH PROGRAM

        A Presidential Executive Order issued September 30, 1999, entitled
    ``Improving Health Protection of Military Personnel Participating in
    Particular Military Operations,'' mandates that ``It is the Policy of
    the United States Government to provide our military personnel with
    safe and effective vaccines, antidotes, and treatments that will negate
    or minimize the effects of these health threats.''
        Many diseases are endemic to areas of military operations.
    Accordingly, the primary mission of the DOD's Military Infectious
    Diseases Research Program is to develop new products with which to
    protect and maintain the health of our troops in the theater. With
    worldwide deployment of our military personnel, it is imperative to
    protect them against infectious diseases that occur around the globe.
    Often our troops are exposed to new strains of infections that do not
    exist within our own borders.
        The Department of Defense (DOD) medical research programs are
    vitally important to maintain the health of our troops wherever they
    are deployed. Furthermore, the programs play a critical role in our
    nation's infectious disease, biodefense, and bioterrorism defense
    efforts. Working with other U.S. public health agencies, DOD scientists
    at the U.S. Army Medical Research Institute for Infectious Diseases
    (USAMRIID), the Walter Reed Army Institute of Research (WRAIR), the
    U.S. Naval Medical Research Center (NMRC), and DOD medical laboratories
    in Asia, Africa, and South America are helping us to better understand,
    diagnose, and treat infectious diseases, especially tropical infectious
    diseases.
        The Society believes the military's overseas laboratories deserve
    special mention. The U.S. Army and the Navy currently support medical
    research laboratories located in five developing countries, including
    Thailand, Egypt, Indonesia, Kenya, and Peru. These research
    laboratories serve as critical sentinel stations alerting military and
    public health agencies to dangerous infectious disease outbreaks and
    increasing microbial resistance to drugs. The research stations are an
    important national resource in the ongoing battle against emerging
    disease, and should be strengthened with increased funding and
    increased opportunities for collaborations with civilian scientists.
    The laboratories provide field sites for important research that cannot
    feasibly be performed in the United States, including basic research,
    testing of new drugs and vaccines, increasing our understanding of
    diseases and their spread. The overseas laboratories strengthen
    collaborations between U.S. and foreign countries, expanding our
    knowledge and understanding of infectious diseases, and providing
    hands-on training for both U.S. and local students and investigators,
    and for local health authorities.

                         A MULTITUDE OF DISEASE THREATS

        Infectious diseases are caused by a wide variety of viruses,
    bacteria, and parasites. For example,
      --Viruses cause West Nile Virus, dengue fever, yellow fever, Ebola,
            Marburg, HIV/AIDS, and the most recent threat, severe acute
            respiratory syndrome (SARS);
      --Bacteria cause cholera, tuberculosis, anthrax, plague, and
            botulism; and
      --Parasites cause malaria and leishmaniasis.
        Infectious diseases are the second leading cause of death
    worldwide, accounting for over 13 million deaths (25 percent of all
    deaths worldwide in 1999). Dozens of well-known diseases--including
    tuberculosis, malaria, and cholera--have reemerged or spread
    geographically since 1973, often in more virulent and drug-resistant
    forms. Over 30 previously unknown disease agents have been identified
    in this period for which therapy is not optimal or does not exist at
    all, including HIV, Ebola, Nipah virus, Marburg virus, hepatitis C, and
    the most recent threat, severe acute respiratory syndrome (SARS).
        Moreover, many of these same threats are potential agents for a
    biological warfare or bioterror attack. Research on these diseases
    stands to benefit the civilian population as well as the military.

               A HISTORY OF SUCCESS IN TROPICAL DISEASE RESEARCH

        Consistent with the standard set by our nation's armed forces and
    the men and women who selflessly serve in our military, it should come
    as no surprise to anyone that the Defense Department's medical research
    programs are second to none. As the leader in tropical and infectious
    disease research, DOD programs have been vital for the successful
    outcome of military campaigns. It was the DOD research program that
    developed the first modern drugs for prevention and treatment of
    malaria, which even today affects 2.4 billion people, or about 40
    percent of the world's population, and causes up to 2.7 million deaths
    each year or about 5 percent of all fatalities worldwide.
        Along with Venezuelan Equine Encephalitis, the DOD also developed
    or supported promising vaccines for prevention of Rift Valley Fever,
    Argentine Hemorrhagic Fever, Adenovirus disease in recruits, and
    plague. Two of these vaccines (plague and adenovirus) are no longer
    licensed in the United States.
        As a result of a significant outbreak in Saudi Arabia and Yemen,
    the first epidemic outside of Africa, Rift Valley Fever vaccine has
    become of interest to troops in the Middle East. Rift Valley fever is a
    deadly, fever-causing viral disease which can lead to hemorrhagic fever
    or encephalitis. It is commonly associated with mosquito-borne
    epidemics, and it can also be spread through contaminated meat. Spread
    of this disease to the United States is not out of the question, since
    mosquitoes capable of transmitting Rift Valley Fever are found in the
    United States. Further development of these vaccines is an important
    national priority.
        Other notable advances accomplished by military experts in tropical
    diseases working with corporate partners include the invention of
    hepatitis A vaccine at WRAIR and its ultimate licensure based on
    studies conducted at the U.S. Armed Forces Research Institute of
    Medical Sciences (AFRIMS) in Bangkok; the discovery (during WWII), and
    later licensure of Japanese encephalitis vaccine, based on studies
    conducted at AFRIMS and WRAIR; and the discovery and licensure of
    mefloquine and halofantrine for treatment and prevention of malaria.
    U.S. Navy scientists working at the Naval Medical Research Unit-2
    formerly in Taiwan developed intravenous therapy for cholera, and
    created the foundation for oral rehydration therapy for cholera and
    other diarrheal diseases, which has been hailed by some as the most
    important medical discovery of the 20th century.
        A significant accomplishment made by military scientists at WRAIR
    and their corporate partners is the discovery of the first prototype
    vaccine shown to be capable of preventing falciparum malaria. Novel
    vaccines, such as a DNA vaccine for malaria, are being developed under
    the leadership of scientists at the NMRC. Most recently, licensure has
    been awarded for Malarone, a new drug for prevention and treatment of
    malaria. Another anti-malarial drug, Tafenaquine, is in advanced field
    trials with a corporate partner. With the certainty that resistance to
    malaria drugs quickly appears, these drugs have a useful lifespan of
    only about ten years. Replacements must be sought continually.

               FURTHER DOD RESEARCH IN INFECTIOUS DISEASES NEEDED

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

                                 ASTMH REQUEST

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

                                   CONCLUSION

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

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

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

                       Prepared Statement of Karen Peluso

        Thank you, Mr. Chairman, for the opportunity to appear before you
    today to present testimony to the Subcommittee on the importance of
    continued funding for Neurofibromatosis (NF), a terrible genetic
    disorder directly associated with military purposes and closely linked
    to many common ailments widespread among the American population.
        I am Karen Peluso, Executive Director of NF Inc.-New England, which
    is a participant in a national coalition of NF advocacy groups. I have
    been actively involved in creating awareness of NF and promoting
    scientific research in this area since 1982. I am here on behalf of the
    100,000 Americans who suffer from NF, including my daughter, as well as
    approximately 150 million Americans who suffer from diseases linked to
    NF, including some of the most common forms of cancer, congenital heart
    disease, hypertension, and learning disabilities.
        Mr. Chairman, I am requesting increased support, in the amount of
    $25 million, to continue the Army's highly successful NF Research
    Program (NFRP). The program's great success can be seen in the
    commencement of clinical trials only ten years since the discovery of
    the NF1 gene. Now, with NF in the expensive but critical era of
    clinical and translational research, scientists closely involved with
    the Army program have stated that the number of high-quality scientific
    applications justify a much larger program.

    What is Neurofibromatosis (NF)?
        NF is a genetic disorder involving the uncontrolled growth of
    tumors along the nervous system which can result in terrible
    disfigurement, deformity, deafness, blindness, brain tumors, cancer,
    and/or death. NF can also cause other abnormalities such as unsightly
    benign tumors across the entire body and bone deformities. In addition,
    approximately one-half of children with NF suffer from learning
    disabilities. It is the most common neurological disorder caused by a
    single gene. While not all NF patients suffer from the most severe
    symptoms, all NF patients and their families live with the uncertainty
    of not knowing whether they will be seriously affected one day because
    NF is a highly variable and progressive disease.
        Approximately 100,000 Americans have NF. It appears in
    approximately one in every 3,500 births and strikes worldwide, without
    regard to gender, race or ethnicity. It is estimated that 50 percent of
    new cases result from a spontaneous mutation in an individual's genes
    and 50 percent are inherited. There are two types of NF: NF1, which is
    more common, and NF2, which primarily involves acoustic neuromas and
    other tumors, causing deafness and balance problems.
        Most strikingly, research has shown that NF is closely linked to
    cancer, brain tumors, learning disabilities, and heart disease,
    potentially affecting over 150 million Americans in this generation
    alone.

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

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

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

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

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

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

                     Prepared Statement of Robert V. Morris

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

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

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

                  Prepared Statement of Robert Washington, Sr.

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

                                PERSONNEL ISSUES

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

                              ACTIVE FORCE ISSUES

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

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

                             HEALTH CARE TESTIMONY

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

                 ADEQUATE FUNDING FOR THE DEFENSE HEALTH BUDGET

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

                              TRICARE IMPROVEMENTS

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

                                   CONCLUSION

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

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

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

                      Prepared Statement of William Hawley

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

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

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

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

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

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

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

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

                     Prepared Statement of Morgan D. Brown

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

                         MILITARY PAY AND COMPENSATION

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

                               EDUCATION BENEFITS

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

                                  HEALTH CARE

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

                            GUARD AND RESERVE ISSUES

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

                           MILITARY SHIPMENT PROGRAMS

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

                              RETIREMENT/SURVIVORS

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

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

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

                   Prepared Statement of Joyce Wessel Raezer

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

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

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

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

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

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

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

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

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

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

                 Prepared Statement of Dr. Steven Elliot Koonin

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

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

                                 [Attachment 1]

                                 [Attachment 2]

                                 [Attachment 3]

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

                      Prepared Statement of George Dahlman

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

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

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

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

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

    Trends
        Since the early 1970s, incidence rates for non-Hodgkin's lymphoma
    (NHL) have nearly doubled.
        For the period from 1973 to 1998, the death rate for non-Hodgkin's
    lymphoma increased by 45 percent, and the death rate for multiple
    myeloma increased by more than 32 percent. These increases occurred
    during a time period when death rates for most other cancers are
    dropping.
        Non-Hodgkin's lymphoma and multiple myeloma rank second and fifth,
    respectively, in terms of increased cancer mortality since 1973.
        Recent statistics indicate both increasing incidence and earlier
    age of onset for multiple myeloma.
        Multiple myeloma is one of the top ten leading causes of cancer
    death among African Americans.
        Despite the significant decline in the leukemia death rate for
    children in the United States, leukemia is still one of the two most
    common diseases that cause death in children in the United States.
        Lymphoma is the third most common childhood cancer.
    Causes of Hematological Cancers
        The causes of hematological cancers are varied, and our
    understanding of the etiology of leukemia, lymphoma, and myeloma is
    limited. Chemicals in pesticides and herbicides, as well as viruses
    such as HIV and EBV, play a role in some hematological cancers, but for
    most cases, no cause is identified. Researchers have recently published
    a study reporting that the viral footprint for simian virus 40 (SV40)
    was found in the tumors of 43 percent of NHL patients. These research
    findings may open avenues for investigation of the detection,
    prevention, and treatment of NHL. There is a pressing need for more
    investigation of the role of infectious agents or environmental toxins
    in the initiation or progression of these diseases.
    Importance To The Department of Defense
        The Leukemia & Lymphoma Society believes this type of medical
    research is particularly important to the Department of Defense for a
    number of reasons.
        First, research on blood-related cancers has significant relevance
    to the armed forces, as the incidence of these cancers is substantially
    higher among individuals with chemical and nuclear exposure. Higher
    incidences of leukemia have long been substantiated in extreme nuclear
    incidents in both military and civilian populations, and recent studies
    have proven that individual exposure to chemical agents, such as Agent
    Orange in the Vietnam War, cause an increased risk of contracting
    lymphoid malignancies. In addition, bone marrow transplants were first
    explored as a means of treating radiation-exposed combatants and
    civilians following World War II.
        The connection of blood cancers to military exposures was further
    illustrated in a recent report by the Institute of Medicine, finding
    that Agent Orange exposure is connected to cases of chronic lymphocitic
    leukemia (CLL). Immediately after the determination, the Veterans
    Administration announced that it will cover the medical expenses of
    veterans with CLL. The Vietnam-era defoliant is now credited with
    causing lymphomas, chronic myelogenous leukemia (CML) as well as CLL.
        Consequently, in the current environment DOD medical research needs
    to also focus on the broader area of blood cancer research as it
    affects our military and domestic preparedness. Soldiers in the field,
    domestic first-response personnel, and the civilian population all face
    blood cancer risks from chemical or nuclear exposures, such as a
    ``dirty bomb.'' Higher incidences of leukemia have long been
    substantiated in extreme nuclear incidents in both military and
    civilian populations. As our nation is contemplating the threat of
    biological, chemical or nuclear terrorism, we need better understanding
    of, and preparation for, the hematological malignancies that would
    inevitably result from such events.
        Secondly, additional funding would expedite the cure for other
    cancers. Research in the blood cancers has traditionally pioneered
    treatments in other malignancies. This research frequently represents
    the leading edge in cancer treatments that are later applied to other
    forms of cancer. Chemotherapy and bone marrow transplants are two
    striking examples of treatments first developed in the blood cancers.
        From a medical research perspective, it is a particularly promising
    time to build a DOD research effort focused on blood-related cancers.
    That relevance and opportunity were recognized over the last two years
    when Congress appropriated a total of $9.25 million to begin initial
    research into chronic myelogenous leukemia (CML) through the
    Congressionally Directed Medical Research Program (CDMRP). As members
    of the Subcommittee know, a noteworthy and admirable distinction of the
    CDMRP is its cooperative and collaborative process that incorporates
    the experience and expertise of a broad range of patients, researchers
    and physicians in the field. Since the CML program was launched, eleven
    proposals were recommended for funding. The review panel found the
    overall quality of the proposals was high and quality research from
    this CMLRP would benefit from additional funding. Additionally,
    innovative projects that have a high probability of finding new targets
    for the development of future therapies and new medicines to treat CML
    were recommended for funding.
        Unfortunately, $9.25 million does not go very far in medical
    research. Recognizing that fact and the opportunity this research
    represents, bipartisan members of Congress have requested that the
    program be modestly increased to $25 million and be expanded to include
    all the blood cancers--the leukemias, lymphomas and myeloma. This would
    provide the research community with the flexibility to build on the
    pioneering tradition that has characterized this field.
        DOD research on the other forms of blood-related cancer addresses
    the importance of preparing for civilian and military exposure to the
    weapons being developed by several hostile nations and to aid in the
    march to more effective treatment for all who suffer from these
    diseases. This request clearly has merit for inclusion in the fiscal
    year 2004 legislation.
        The Leukemia & Lymphoma Society strongly endorses and
    enthusiastically supports this effort and respectfully urges the
    Committee to include this funding in the fiscal year 2004 Defense
    Appropriations bill.
        We believe that building on the foundation Congress initiated over
    the last two years would both significantly strengthen the CDMRP and
    accelerate the development of cancer treatments. As history has
    demonstrated, expanding its focus into areas that demonstrate great
    promise; namely the blood-related cancers of leukemia, lymphoma and
    myeloma, would substantially aid the overall cancer research effort and
    yield great dividends.

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

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

                      Prepared Statement of Joan Goldberg

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

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

    STATEMENT OF MAJOR GENERAL PAUL A. WEAVER, JR., USAF
                (RETIRED), ON BEHALF OF THE JUVENILE
                DIABETES FOUNDATION INTERNATIONAL
    ACCOMPANIED BY:
            CATHY LEE WEAVER
            JULIA WEAVER

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

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

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

                      FISCAL YEAR 2001 RESEARCH SUMMARIES

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

                      FISCAL YEAR 2002 RESEARCH SUMMARIES

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

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

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

             Prepared Statement of Major General Robert A. McIntosh

        Mr. Chairman and Members of the Subcommittee: On behalf of the
    members of the Reserve Officers Association from each of the uniformed
    services, I thank you for the opportunity to present the association's
    views and concerns relating to the Reserve components and the National
    Defense Appropriations Act for fiscal year 2004.
        To say that this is an extraordinary year, a year like no other in
    recent history has become a truism that belies the harsh reality of
    September 11th and its aftermath in Afghanistan and now Iraq. So much
    has changed so obviously in our outlook, our way of living, and our
    approach to doing the nation's business that it is requires no further
    enumeration.
        In the National Defense Authorization Act for fiscal year 1991, the
    Congress stated that ``the overall reduction in the threat and the
    likelihood of continued fiscal constraints require the United States to
    increase the use of the Reserve components of the Armed Forces. The
    Department of Defense should shift a greater share of force structure
    and budgetary resources to the Reserve components of the Armed Forces.
    Expanding the Reserve components is the most effective way to retain
    quality personnel as the force structure of the Active components is
    reduced . . . The United States should recommit itself to the concept
    of the citizen-soldier as a cornerstone of national defense policy for
    the future.'' One can argue about the reduction of the threat, but the
    increased use of the Reserve components is clearly upon us.
    Greater Reliance on Reserve Components
        The 50 years of reliance on a large, Cold War, standing military
    have ended. Confronted with sizeable defense budget reductions, changes
    in the threat, and new missions, America's military answer for the
    future must be a return to the traditional reliance on its Minutemen--
    the members of the Reserve components. Can America's Reservists fulfill
    their commitment to the Total Force--can they meet the challenge?
        Operations Desert Shield and Desert Storm proved that the Reserve
    components were ready and able. During the Gulf War, more than 265,000
    Reservists were called to active duty. Of the total mobilized, 32
    percent were from the National Guard and 67 percent from ``the
    Reserve.'' More than 106,000 Reservists were deployed to Southwest
    Asia. About 20 percent of the forces in the theater were members of the
    Reserve components.
        In Bosnia and Kosovo, more than 48,000 Reservists have again
    demonstrated their readiness and their capability to respond to their
    nation's call. For the past several years, the Reserve components have
    provided approximately 12.5 million support days to the Active
    components annually. That equates to some 35,000 support-years
    annually, the equivalent of two Army divisions. Thus far, Operation
    Iraqi Freedom has seen nearly 230,000 Reservists called to active duty.
    The demobilization has already begun for many; but many Reservists will
    continue to serve on active duty in the theater of operations and here
    in the United States and overseas.
        A strong, viable Reserve force is an inseparable part of America's
    military, a cost-effective augmentation to the Active force and the
    marrow of the mobilization base. Ultimately, mobilizing Reserve forces
    is the litmus test and the enabler of public support and national will.
    The early and extensive involvement of the Guard and Reserve in the
    Gulf War was instrumental in achieving the strong public support of the
    military and our national objectives. However transformation plays out,
    our Reserve forces will continue to have a major role.

    Reserve Components' Cost-Effectiveness
        ROA has long maintained that a proper mix of Active and Reserve
    forces can provide the nation with the most cost-effective defense for
    a given expenditure of federal funds. Reservists provide 55 percent of
    the Total Force, but cost only 8.0 percent of the fiscal year 2004 DOD
    budget. They require only 23 percent of active-duty personnel costs,
    even when factoring in the cost of needed full-time support personnel.
    We need only consider the comparable yearly personnel (only) costs for
    100,000 Active and Reserve personnel to see the savings. Over a 4-year
    period, 100,000 Reservists cost $3 billion less than 100,000 Active
    duty personnel. If the significant savings in Reserve unit operations
    and maintenance costs are included, billions more can be saved in the
    same period. ROA is not suggesting that DOD should transfer all
    missions to the Reserve, but the savings Reservists can provide must be
    considered in transformation-driven force-mix decisions. It is
    incumbent upon DOD to ensure that the services recognize these savings
    by seriously investigating every mission area and transferring as much
    structure as possible to their Reserve components.
    Transformation Concerns
        While the transformation process proposed by the Department of
    Defense is visionary and bold, ROA is concerned about a number of its
    provisions. We believe that there are appropriations implications that
    have not been directly addressed in the appropriations process; that
    there is a lack of specificity regarding operating authority; and that
    there is a one-size-fits-all approach to some problems that raises more
    difficulties than it resolves. Here we will mention only three:
      --Integrity of Reserve Component Appropriations.--The fiscal year
            2004 defense budget request was predicated in part upon a major
            change in the way the services' active duty and Reserve
            component appropriations are structured. Assuming congressional
            acquiescence, the department combined the personnel
            appropriations into a single appropriation for each service.
            This was ostensibly done to enhance funding efficiency and
            management. Unfortunately it also undermines the Reserve
            chiefs' authority as their components' funding directors, and
            impairs their accountability for preparing their components for
            mobilization. It also, in our view, seriously compromises and
            diminishes the Congress's constitutionally mandated
            responsibility to provide oversight to the Armed Forces. It is
            not a good idea.
      --Term Limits.--The Department of Defense very recently requested
            sweeping changes in the way it manages its workforce. No doubt
            much of what was requested needs doing, but we are asked to
            take a great deal on faith, and at least some of the changes
            requested appear to us to be flawed. One proposal would
            eliminate the congressionally established term limits for
            specific key officials in the department's leadership. ROA is
            concerned that eliminating such defined tour lengths (minimum
            and maximum) will have a very negative impact on the ability of
            Reserve component senior leaders to speak their minds freely
            and to contribute meaningfully during the policy-making
            process. In other words, the proposal to eliminate
            congressionally mandated tour lengths for the Reserve component
            chiefs would have a chilling effect on their ability to
            represent the needs of the people they command--the Reserve
            forces. The removal of minimum tour lengths would open the door
            for early dismissal or retirement when what was expressed by
            Reserve component leaders was not necessarily the desired
            department solution. The proposal to eliminate mandated tour
            lengths for Reserve component chiefs is not a good idea.
      --Skill Training.--In the same proposal, the department has requested
            authority to call reservists to active duty for training for up
            to 90 days in preparation for mobilization. This training would
            take place before issuance of mobilization orders, and thus
            would be in addition to, not a part of, congressionally
            mandated limitations on activation authorities. Family and
            employer support could suffer. ROA believes that any such
            training, particularly of significant length, should be a part
            of the mobilization process and start the clock for tour length
            and associated benefits. The question of when this training
            begins is also significant. If it begins before the
            mobilization process, it is a Reserve cost, which could
            jeopardize other essential training; after mobilization, it is
            an active duty cost that could deter gaining commanders from
            including Reserve component assets in their war plans. The 90-
            day activation for training proposal, as written, is not a good
            idea.
        I will now address service-specific issues.

                                  ARMY RESERVE

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

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

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

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

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

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

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

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

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

                               AIR FORCE RESERVE

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

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

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

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

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

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

                                 NAVAL RESERVE

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

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

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

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

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

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

       MARINE CORPS RESERVE FISCAL YEAR 2004 UNFUNDED
           OPERATIONS AND MAINTENANCE REQUIREMENTS

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

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

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

      FISCAL YEAR 2004 RESERVE PERSONNEL, MARINE CORPS
                           (RPMC)

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

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

                                  COAST GUARD

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

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

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

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

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

                                   CONCLUSION

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

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

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

                     Prepared Statement of Rodney C. Lester

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

                  BACKGROUND INFORMATION ON NURSE ANESTHETISTS

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

                       NURSE ANESTHETISTS IN THE MILITARY

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

                  INCLUSION OF AAS UNDER THE DOD HEALTH SYSTEM

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

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

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

         CRNA RETENTION AND RECRUITING HOW THIS COMMITTEE CAN HELP DOD

        In all of the Services, maintaining adequate numbers of active duty
    CRNAs is of utmost concern. For several years, the number of CRNAs
    serving in active duty has consistently fallen short of the number
    authorized by DOD as needed providers. This is further complicated by
    the shortage of CRNAs in the nation. A letter dated March 14, 2002 from
    the Asst. Secretary of Defense for Health Affairs, William
    Winkenwerder, Jr., MD, to the former AANA President, Debbie A.
    Chambers, CRNA, MHSA, stated that, ``The Nurse Anesthetist specialty
    has been identified by the Department as a critical wartime shortage
    for the last several years.''
        Recruitment of nurse anesthetists for the military becomes
    increasingly difficult when the civilian sector faces such critical
    shortages, too. Currently, the number of nurse anesthetist vacancies
    increased 250 percent from 1998-2001, according to CRNA managers'
    surveys. Health professions staffing firms report CRNA recruitment
    rising by up to ten-fold from 1997-2000, making nurse anesthesia the
    second most recruited health professional specialty. In addition, this
    is compounded by the impact of baby boomers retiring. As the number of
    Medicare-eligible Americans climbs, it compounds the number of surgical
    procedures requiring anesthetics. Indeed, among those retiring
    Americans are CRNAs themselves.
        In addition, the AANA cited a decline in anesthesiology resident
    positions, as well as an increase in office-based surgery and surgery
    in places other than hospitals as driving the increased need for CRNAs.
    Additionally, with managed care continuing to pursue cost-cutting
    measures, coverage plans are recognizing CRNAs for providing high-
    quality anesthesia care with reduced expense to patients and insurance
    companies. The cost-efficiency of CRNAs helps keep escalating medical
    costs down.
        This Committee can greatly assist in the effort to attract and
    maintain essential numbers of nurse anesthetists in the military by
    their support of increasing special pays.
    Critical Skills Retention Bonus
        Last year on May 8, 2002, Brigadier General Barbara C. Brannon,
    Assistant Surgeon General, Air Force Nursing Services, testified before
    this Senate Committee requesting the expansion of the critical skills
    retention bonus, authorized in the fiscal year 2001 Defense
    Authorization Act, to health professionals with critical skills.
    Brigadier General Brannon stated:

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

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

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

        The AANA also thanks this committee for their hard work. The CSRB
    for fiscal year 2003 was funded by this committee, and is assisting
    each of the service branches to both retain and recruit CRNAs. We hope
    you will continue to fund the CSRB for fiscal year 2004.
        The AANA thanks the committee for funding the Critical Skills
    Retention Bonus (CSRB) for fiscal year 2003 to ensure the retention of
    CRNAs in the military services. We hope you will support continued
    funding for CSRB for fiscal year 2004.
    The Incentive Special Pay for Nurses
        According to a March 1994 study requested by the Health Policy
    Directorate of Health Affairs and conducted by DOD, a large pay gap
    existed between annual civilian and military pay in 1992. This study
    concluded, ``this earnings gap is a major reason why the military has
    difficulty retaining CRNAs.'' In order to address this pay gap, in the
    fiscal year 1995 Defense Authorization bill Congress authorized the
    implementation of an increase in the annual Incentive Special Pay (ISP)
    for nurse anesthetists from $6,000 to $15,000 for those CRNAs no longer
    under service obligation to pay back their anesthesia education. Those
    CRNAs who remain obligated receive the $6,000 ISP.
        Both the House and Senate passed the fiscal year 2003 Defense
    Authorization Act Conference report, H.Rept. 107-772, which included an
    ISP increase to $50,000. The report included an increase in ISP for
    nurse anesthetists from $15,000 to $50,000. There had been no change in
    funding level for the ISP since the increase was instituted in fiscal
    year 1995, while it is certain that civilian pay has continued to rise
    during this time. The AANA is requesting that this committee fund the
    new increase for the ISP at $50,000 for all the branches of the armed
    services to retain and recruit CRNAs now and into the future.
        There still continues to be high demand and low supply of CRNAs in
    the health care community leading to higher incomes widening the gap in
    pay for CRNAs in the civilian sector compared to the military. The
    fiscal year 2002 AANA Membership survey measured income in the civilian
    sector by practice setting. The median income in a hospital setting is
    $110,200, MDA group $100,534, and self-employed CRNA $130,000 (includes
    Owner/Partner of a CRNA Group). These median salaries include call pay,
    overtime pay, and bonus pay. These salaries are still higher than the
    median salary of $74,000 across all military service branches.
        In civilian practice, all additional skills, experience, duties and
    responsibilities, and hours of work are compensated for monetarily.
    Additionally, training (tuition and continuing education), health care,
    retirement, recruitment and retention bonuses, and other benefits often
    equal or exceed those offered in the military.
        Rear Admiral Nancy Lescavage, Director of the Navy Nurse Corps, and
    Commander of the Naval Medical Education and Training Command testified
    before this Senate Committee at the April 30, 2003 hearing:

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

        Salaries in the civilian sector will continue to create incentives
    for CRNAs to separate from the military, especially at the lower grades
    without a competitive incentive from the military to retain CRNAs.
    Therefore, it is vitally important that the Incentive Special Pay (ISP)
    be increased to $50,000 to ensure the retention of CRNAs in the
    military
        AANA thanks this Committee for its support of the annual ISP for
    nurse anesthetists. AANA strongly recommends the continuation and an
    increase in the annual funding for ISP from $15,000 to $50,000 for
    fiscal year 2004, which recognizes the special skills and advanced
    education that CRNAs bring to the DOD health care system.
    Board Certification Pay for Nurses
        Included in the fiscal year 1996 Defense Authorization bill was
    language authorizing the implementation of a board certification pay
    for certain non-MD health care professionals, including advanced
    practice nurses. AANA is highly supportive of board certification pay
    for all advanced practice nurses. The establishment of this type of pay
    for nurses recognizes that there are levels of excellence in the
    profession of nursing that should be recognized, just as in the medical
    profession. In addition, this pay may assist in closing the earnings
    gap, which may help with retention of CRNAs.
        While many CRNAs have received board certification pay, there are
    many that remain ineligible. Since certification to practice, as a CRNA
    does not require a specific master's degree, many nurse anesthetists
    have chosen to diversify their education by pursuing an advanced degree
    in other related fields. But CRNAs with master's degrees in education,
    administration, or management are not eligible for board certification
    pay since their graduate degree is not in a clinical specialty. Many
    CRNAs who have non-clinical master's degrees either chose or were
    guided by their respective services to pursue a degree other than in a
    clinical specialty. Many feel that diversity in education equates to a
    stronger, more viable profession. CRNAs do utilize education and
    management principles in their everyday practice and these skills are
    vital to performance of their duties. To deny a bonus to these
    individuals is unfair, and will certainly affect their morale as they
    work side-by-side with their less-experienced colleagues, who will
    collect a bonus for which they are not eligible. In addition, in the
    future this bonus will act as a financial disincentive for nurse
    anesthetists to diversify and broaden their horizons.
        AANA encourages DOD and the respective services to reexamine the
    issue of awarding board certification pay only to CRNAs who have
    clinical master's degrees.

                                   CONCLUSION

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

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

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

                    Prepared Statement of Dr. John Sommerer

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

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

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

                  Prepared Statement of Captain Robert C. Hurd

                                    REQUEST

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

                                   BACKGROUND

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

                                NSCC OBJECTIVES

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

                                    BENEFITS

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

                                   ACTIVITIES

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

                               SENIOR LEADERSHIP

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

                      DRUG-FREE AND GANG-FREE ENVIRONMENT

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

                                    TRAINING

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

                                SUMMER TRAINING

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

                             INTERNATIONAL EXCHANGE

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

                           NAVY LEAGUE CADET TRAINING

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

                                TRAINING GRANTS

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

                                  SCHOLARSHIPS

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

                               SERVICE ACCESSIONS

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

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

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

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

                      Prepared Statement of Dennis Achgill

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

                                    FINDINGS

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

                                RECOMMENDATIONS

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

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

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

                      Prepared Statement of Chris Hudgins

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

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

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

                        Prepared Statement of Fran Visco

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

               OVERVIEW OF THE DOD BREAST CANCER RESEARCH PROGRAM

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

                          UNIQUE FUNDING OPPORTUNITIES

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

                            SCIENTIFIC ACHIEVEMENTS

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

                            FEDERAL MONEY WELL SPENT

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

                       POSITIVE FEEDBACK ON THE DOD BCRP

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

               COMMITMENT OF THE NATIONAL BREAST CANCER COALITION

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

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

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

                   Prepared Statement of Martin B. Foil, Jr.

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

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

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

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

    Additional DVHIP Accomplishments and Ongoing Research Initiatives
        Provided successful rehabilitation and return to work and community
    re-entry for active duty military personnel and veterans.
        Established the War on Terrorism Brain Injury Registry to identify
    individuals with brain injury and examine clinically relevant issues in
    the management of brain injury sustained in theatre.
        Ongoing studies are being conducted with Army paratroopers and
    cadets and U.S. Marines at Fort Bragg, West Point, and Camp Pendleton.
    These studies are investigating brief evaluation instruments for use on
    the battlefield to determine which injured service members require
    immediate treatment and which can return to duty. The goal of these
    studies is to preserve our nation's fighting strength while conserving
    medical resources for those injured and requiring treatment.
        Completed enrolling patients in a research protocol on functional
    rehabilitation versus cognitive rehabilitation for severe brain injury.
        A randomized controlled study of sertraline for post concussive
    syndrome is being carried out in all DVHIP military and VA sites.
        Started new randomized controlled trial of valproate for brain
    injury related agitation at James A. Haley Veterans Hospital, Tampa,
    Florida.
        A new DVHIP website is currently under construction. The website
    will provide information to individuals with brain injury, their
    families and caregivers, as well as to clinicians, researchers and the
    general public.

    Fiscal year 2004 Goals
        Expand clinical capacity to meet the need to care for an increasing
    number of injured military personnel and veterans.
        Improve rehabilitation and treatment program for active duty
    service members with mild cognitive impairment following possible
    chemical or biological exposure.
        Establish a multi-center trial to provide the first evidence on the
    effectiveness of cognitive rehabilitation and stimulant medication
    early in recovery from severe brain injury.
        Conduct the study of enhanced protection from parachute injury by
    field testing approved novel helmet configurations at Fort Bragg.
        Develop return to duty guidelines through analysis of data
    collected in the West Point sports concussion study and the Fort Bragg
    concussion study.
        Examine biomarkers in mild brain injury and injury recovery in
    collaboration with Ron Hayes, Ph.D. at the Evelyn F. and William L.
    McKnight Brain Institute at the University of Florida.
        Examine the utility of mobile transcranial Doppler ultrasonography
    to identify cerebral blood flow alterations in mild brain injury and
    recovery patterns.
        Report to the U.S. Army the findings from the War on Terrorism
    Brain Injury Registry regarding incidence of closed head injury and the
    impact of early wound closure in penetrating brain injury.
        Extend outcomes research through the evaluation of long-term work
    and duty status in DVHIP rehabilitation trial participants.
        Disseminate evidence based guidelines on pharmacological management
    of neurobehavioral consequences of brain injury.
        Expand the DVHIP Registry to include patients from additional DVA
    and DOD medical facilities. Broaden the spectrum of care for military
    personnel and veterans who have sustained brain injuries by using the
    DVHIP Registry to identify individuals in need of additional treatment
    and support.
        Expand the content and services of the DVBIC website. Future
    website applications will include enhanced educational materials and
    the capability to make referrals and gain access to care.
    Conclusion
        As a part of the military health program, the DVHIP is in a unique
    position to help prevent, treat, and provide education regarding brain
    injury and to lead efforts to better the lives of active duty and
    retired military personnel affected by brain injury. The DVHIP stands
    ready to assist in the care of troops injured in any and all potential
    hostilities.
        I respectfully urge your support for $5 million for the DVHIP in
    the fiscal year 2004 Defense Appropriations bill in the DOD Health
    Affairs budget under Operation and Maintenance to continue this
    important program.

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

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

                 Prepared Statement of Captain Marshall Hanson

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

                    CURRENT AND FUTURE ISSUES FACING DEFENSE

        The Associations for America's Defense would like to thank this
    Committee for the stewardship that it has demonstrated on issues of
    Defense. Its pro-defense and non-partisan leadership sets the example.
        In keeping with this, A4AD would like to submit what its membership
    feel are the top equipment requirements for the Armed Forces. Over the
    last six months, A4AD has compiled this list to provide the committee
    with a consolidated listing which does not favor a particular service
    and is a compilation from numerous sources. Both Active and Reserve
    requirements are provided for the major four of the uniformed services.
    The services are not listed in priority order.

    Top Equipment Requirements:
                Air Force Active:
        F/A-22's
        Tanker Modernization
        Space-Based Infrared System SBIRS
                Air Force Reserve:
        C-17's (replaces aging C-141)
        F-16 Upgrades; sensor, targeting pods, displays
        A-10 Targeting Pods
        C-40's Medivac (replaces aging C-9A)
                Air Guard:
        C-17's
        KC-135 Re-engine
        Litening II targeting pods
                Army Active:
        Recapitalize The M1A1 & M2 force
        AH-64 and CH-47 Aviation Upgrades
        Objective Force Future Combat Systems
                Army Reserve:
        Light Medium Tactical Vehicles (LMTV)
        Medium Tactical Vehicles (MTV)
        High Mobility Multi-Purpose Wheeled Vehicle (HMMWV)
        IHFR Radio
                Army Guard:
        UH-60 Black Hawks
        AH-64 Apaches
                Active Marine Corps:
        JSF Joint Strike Fighter
        V-22 Osprey Program
        AAAV Program
                Reserve Marine Corps (and Active):
        F/A-18 ECP-583 Upgrade
        CH-53E HNVS ``B'' Kits (Forward Looking Infrared)
        Initial Issue equipment
                Active Navy:
        Littoral Combat Ship
        F/A-18 E/F Procurement
        DD(X)
                Naval Reserve:
        C-40A's Airlift Aircraft (replace aging C-9B)
        LITTORAL SURVEILLANCE SYSTEM, LSS
        F/A-18 ECP-560 Upgrades
        Language delaying decommissioning of Navy's Coastal Patrol Craft
    (PCs) and Aviation Squadrons
        Equipment requirements on the above equipment list were purposely
    broken out by Active and Reserve requirements.
    Maintaining the Reserve Equipment List
        Issue.--The Active Duty leadership has fallen short of fulfilling
    the Congressional mandate of responsibility for funding Reserve as well
    as Active Duty equipment through budgetary planning. The active
    solution seems to be suggesting that Reserve equipment should be
    returned to the Active Duty. This would be a mistake.
        Position.--The overwhelming majority of Reserve and Guard members
    join the RC to have hands-on experience with equipment. The training
    and personnel readiness of Guard and Reserve members depends on
    constant hands-on equipment exposure. Historical records show that
    Guard and Reserve units maintain hardware and equipment at or higher
    than average material readiness and often have better training
    readiness.
        In Operation Iraqi Freedom, Reserve and Guard units have proven
    their readiness. Current and future war fighting requirements will need
    these highly qualified units when the Combatant Commanders require
    fully ready units. The personnel readiness, retention, and training of
    Reserve and Guard members will depend on them having Reserve equipment
    that they can utilize, maintain, train on, and deploy with when called
    upon.
        Depending on Active Component hardware has never been successful
    for many functional reasons. History shows that this can only be
    accomplished through Reserve and Guard equipment, since the training
    cycles of Active Components are rarely, if ever, synchronized with the
    training or exercise times of Guard and Reserve units. The A4AD
    recommends strengthening the appropriations for Reserve and Guard
    equipment in order to maintain highly qualified trained Reserve and
    Guard personnel.
        We ask this committee to provide appropriations against unfunded
    equipment requirements. To appropriate funds to Reserve equipment would
    help emphasize to the Active Duty that it is exploring dead-ends by
    suggesting the transfer of Reserve equipment away from the Reservists.

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

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

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

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

                                   CONCLUSION

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

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

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

                    Prepared Statement of Steven L. Garrett

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

                     HEALTH CARE FOR MILITARY BENEFICIARIES

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

                         OTHER MILITARY RETIREE ISSUES

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

                                   A CONCERN

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

                                   CONCLUSION

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

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

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

                     Prepared Statement of Joseph L. Barnes

                                  INTRODUCTION

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

                        FISCAL YEAR 2004 DEFENSE BUDGET

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

                            QUALITY OF LIFE PROGRAMS

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

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

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

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

    Health Care

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

    Education

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

    Retirement

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

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

    Military Construction

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

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

    Other Issues

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

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

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

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

                                   CONCLUSION

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

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

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

                   Prepared Statement of Dr. James A. Fabunmi

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

                                    SUMMARY

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

                       SHORTAGE OF AMERICAN S&T WORKFORCE

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

                     COMPONENTS OF TOP GRADE S&T EDUCATION

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

                             PROPOSED STWAS PROGRAM

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

                     THE AMERICAN HERITAGE DEFENSE ALLIANCE

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

                           RECOMMENDED APPROPRIATIONS

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

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

                         ADDITIONAL SUBMITTED STATEMENT

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

           Prepared Statement of the Ovarian Cancer National Alliance

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

             DEPARTMENT OF DEFENSE OVARIAN CANCER RESEARCH PROGRAM

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

             THE DOD OCRP HAS AN OUTSTANDING RECORD OF ACHIEVEMENTS

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

                    ADDITIONAL INFORMATION ABOUT THE PROGRAM

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

                             CONCLUSION OF HEARING

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

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    Achgill, Dennis, Director of Public Affairs, American Society of
      Mechanical Engineers...........................................   667
        Prepared Statement of........................................   668

    Barnes, Joseph L., National Executive Secretary, Fleet Reserve
      Association....................................................   694
        Prepared Statement of........................................   695
    Bester, Brigadier General William T., Chief, Army Nurse Corps,
      Medical Programs, Department of Defense........................   282
        Prepared Statement of........................................   285
        Questions Submitted to.......................................   359
    Blum, Lieutenant General H. Steven, Army National Guard, Chief,
      National Guard Bureau, National Guard, Department of Defense...   369
        Prepared Statement of........................................   373
        Questions Submitted to.......................................   418
    Bond, Senator Christopher S., U.S. Senator From Missouri,
      Questions Submitted by.......................................418, 473
    Brannon, Brigadier General Barbara, Assistant Surgeon General,
      Air Force Nursing Services and Commander of Malcolm Grow
      Medical Center, Medical Programs, Department of Defense........   298
        Prepared Statement of........................................   301
        Questions Submitted by.......................................   364
    Brown, Master Sergeant Morgan D., (Ret.), Legislative Assistant,
      Air Force Sergeants Association (AFSA).........................   608
        Prepared Statement of........................................   609
    Burns, Senator Conrad, U.S. Senator From Montana:
        Opening Statement of.........................................   551
        Prepared Statements of.....................................371, 488
        Statement of.................................................    70
    Butler, Benjamin H., Deputy Director of Legislation, National
      Association for Uniformed Services.............................   564
        Prepared Statement of........................................   565
    Byrd, Senator Robert C., U.S. Senator From West Virginia:
        Questions Submitted by.......................................   538
        Statement of.................................................   489

    Christie, Thomas P., Director, Operational Test and Evaluation,
      Missile Defense Agency.........................................   195
        Prepared Statement of........................................   219
        Questions Submitted to.......................................   238
    Clark, Admiral Vernon E., USN, Chief of Naval Operations,
      Department of the Navy, Department of Defense..................   123
        Prepared Statement of........................................   140
        Questions Submitted to.......................................   193
        Statement of.................................................   137
    Cochran, Senator Thad, U.S. Senator From Mississippi:
        Questions Submitted by...................56, 61, 118, 193, 469, 534
        Statement of.................................................   124
    Cowan, Vice Admiral Michael L., Surgeon General of the Navy,
      Medical Programs, Department of Defense........................   247
        Prepared Statement of........................................   249
        Questions Submitted to.......................................   309

    Dahlman, George, Vice President, Public Policy, The Leukemia &
      Lymphoma Society...............................................   627
        Prepared Statement of........................................   629
    Domenici, Senator Pete V., U.S. Senator From New Mexico,
      Questions Submitted by..........................57, 64, 315, 334, 351
    Dorgan, Senator Byron L., Statements of.......................... 5, 70
    Duggan, Dennis M., Deputy Director, National Security, Foreign
      Relations Commission, The American Legion......................   569
        Prepared Statement of........................................   571
    Durbin, Senator Richard J., U.S. Senator From Illinois, Questions
      Submitted by...................................................   544

    Fabunmi, James A., Ph.D., President, The American Heritage
      Defense Corporation............................................   702
        Prepared Statement of........................................   704
    Feinstein, Senator Dianne, U.S. Senator From California:
        Questions Submitted by...........................236, 238, 343, 545
        Statement of.................................................   490
    Foil, Martin B., Jr., Member of the Board of Directors, National
      Brain Injury Research, Treatment and Training Foundation.......   680
        Prepared Statement of........................................   681

    Garrett, Steven L., Deputy Legislative Director, The Retired
      Enlisted Association...........................................   690
        Prepared Statement of........................................   691
    Goldberg, Joan, Executive Director, American Society for Bone and
      Mineral Research; on behalf of the National Coalition for
      Osteoporosis and Related Bone Diseases.........................   631
        Prepared Statement of........................................   633

    Hagee, General Michael W., USMC, Commandant of the Marine Corps,
      Department of the Navy, Department of Defense..................   123
        Prepared Statement of........................................   158
        Question Submitted to........................................   194
        Statement of.................................................   157
    Hanson, Captain Marshall, USNR (Retired), Acting Chair,
      Associations for America's Defense.............................   685
        Prepared Statement of........................................   686
    Harkin, Senator Tom, U.S. Senator From Iowa, Questions Submitted
      by............................................................64, 421
    Hawley, William, M.D., Board of Directors, Public Policy
      Committee, Lymphoma Research Foundation........................   604
        Prepared Statement of........................................   606
    Helmly, Lieutenant General James R., Chief, Army Reserve,
      Reserves, Department of Defense................................   425
        Prepared Statement of........................................   427
        Questions Submitted to.......................................   469
    Hoffman, Stephen, M.D., Chief Executive Officer, Sanaria, Inc.;
      on behalf of the American Society for Tropical Medicine and
      Hygiene........................................................   587
        Prepared Statement of........................................   589
    Holleman, Deirdre Parke, Esq., Co-Director, National Military and
      Veterans Association, and National Legislative Director, The
      Retired Enlisted Association...................................   559
        Prepared Statement of........................................   560
    Hollings, Senator Ernest F., U.S. Senator From South Carolina:
        Questions Submitted by.......................................   472
        Statement of.................................................   489
    Hudgins, Chris, Public Policy Associate, National Prostate Cancer
      Coalition......................................................   670
        Prepared Statement of........................................   672
    Hurd, Captain Robert C., USN (Retired), Headquarters Liasion to
      Congress, United States Naval Sea Cadet Corps..................   660
        Prepared Statement of........................................   662
    Hutchison, Senator Kay Bailey, U.S. Senator From Texas:
        Questions Submitted115, 190, 194, 238, 420, 470, 474, 478, 481, 537
        Statement of.................................................    47
    Inouye, Senator Daniel K., U.S. Senator From Hawaii:
        Opening Statements of......................................123, 241
        Prepared Statements of.............................4, 225, 370, 488
        Questions Submitted by.......................................   58,
                           116, 119, 319, 336, 354, 360, 363, 366, 423, 538
        Statement of.................................................     4

    James, Lieutenant General Daniel, III, Director, Air National
      Guard, National Guard, Department of Defense...................   369
        Prepared Statement of........................................   373
    Johnson, Hansford T., Acting Secretary of the Navy, Department of
      the Navy, Department of Defense................................   123
        Prepared Statement of........................................   126
        Questions Submitted to.......................................   190
        Statement of.................................................   124
    Jumper, General John P., Air Force, Chief of Staff, Department of
      the Air Force, Department of Defense...........................    69
        Prepared Statement of........................................    79
        Questions Submitted to.......................................   118

    Kadish, Lieutenant General Ronald T., USAF, Director, Missile
      Defense Agency.................................................   195
        Prepared Statement of........................................   198
        Questions Submitted to.......................................   236
    Koonin, Steven Elliot, Ph.D., Provost and Professor of
      Theoretical Physics, California Institute of Technology; on
      behalf of the Association of American Universities and the
      National Association of State Universities and Land-Grant
      Colleges.......................................................   622
        Prepared Statement of........................................   623

    Leahy, Senator Patrick J., U.S. Senator From Vermont:
        Prepared Statement of........................................     3
        Questions Submitted by.......................................   539
        Statements of................................................3, 490
    Lescavage, Rear Admiral Nancy J., Nurse Corps, United States
      Navy, Director, Navy Nurse Corps, Medical Programs, Department
      of Defense.....................................................   290
        Prepared Statement of........................................   294
        Questions Submitted to.......................................   362
    Lester, Rodney C., CRNA, Ph.D., President, American Association
      of Nurse Anesthetists..........................................   650
        Prepared Statement of........................................   651

    McCarthy, Lieutenant General Dennis M., Chief, Marine Forces
      Reserve, Reserves, Department of Defense.......................   425
        Prepared Statement of........................................   441
        Questions Submitted to.......................................   478
    McConnell, Senator Mitch, U.S. Senator From Kentucky, Questions
      Submitted by...................................................   317
    McIntosh, Major General Robert, USAFR (Retired), Executive
      Director, Reserve Officers Association of the United States....   639
        Prepared Statement of........................................   640
    Morris, Robert V., Chief Executive Officer, Fort Des Moines
      Memorial Park, Inc.............................................   595
        Prepared Statement of........................................   596

    Ovarian Cancer National Alliance, Prepared Statement of..........   707

    Pace, General Peter, U.S. Army, Vice Chairman, Joint Chiefs of
      Staff, Office of the Secretary, Department of Defense..........   487
    Peake, Lieutenant General James B., Surgeon General, United
      States Army, Medical Programs, Department of Defense...........   241
        Prepared Statement of........................................   243
        Questions Submitted to.......................................   328
    Peluso, Karen, Executive Director, Neurofibromatosis, Inc., New
      England........................................................   592
        Prepared Statement of........................................   593
    Puzon, Captain Ike, U.S. Navy Reserve (Retired), Director of
      Legislation, The Naval Reserve Association.....................   551
        Prepared Statement of........................................   553

    Raezer, Joyce Wessel, Director, Government Relations, National
      Military Family Association....................................   614
        Prepared Statement of........................................   616
    Roche, Hon. James G., Secretary of the Air Force, Department of
      the Air Force, Department of Defense...........................    69
        Prepared Statement of........................................    79
        Questions Submitted to.......................................   115
    Rumsfeld, Hon. Donald, Secretary of Defense, Office of the
      Secretary, Department of Defense...............................   487
        Opening Statement............................................   490
        Prepared Statement of........................................   495

    Schultz, Lieutenant General Roger C., Director, Army National
      Guard, National Guard, Department of Defense...................   369
        Prepared Statement of........................................   373
        Questions Submitted to.......................................   422
    Sellman, Wayne S., Ph.D., Vice President and Director for Public
      Policy Issues, The Human Resources Research Organization; on
      behalf of the American Psychological Association...............   579
        Prepared Statement of........................................   580
    Shelby, Senator Richard C., U.S. Senator From Alabama:
        Questions Submitted by................................318, 335, 353
        Statements of................................................4, 489
    Sherrard, Lieutenant General James E., III, Chief, Air Force
      Reserve, Reserves, Department of Defense.......................   425
        Prepared Statement of........................................   449
        Questions Submitted to.......................................   481
    Shinseki, General Eric K., Chief of Staff, United States Army,
      Department of the Army, Department of Defense..................     1
        Prepared Statement of........................................     8
        Questions Submitted to.......................................    55
        Statement of.................................................    30
    Sommerer, John, Ph.D., Chief Technology Officer, Applied Physics
      Lab, Johns Hopkins University; on behalf of the Coalition for
      National Security Research.....................................   656
        Prepared Statement of........................................   658
    Specter, Senator Arlen, U.S. Senator From Pennsylvania:
        Opening Statement of.........................................     1
        Questions Submitted by......................................62, 422
    Stevens, Senator Ted, U.S. Senator From Alaska:
        Opening Statements of.............................69, 195, 369, 487
        Prepared Statements of.......................................2, 171
        Questions Submitted by.........55, 60, 309, 328, 344, 359, 362, 364

    Taylor, Lieutenant General Dr. George Peach, Jr., Air Force
      Surgeon General, Medical Programs, Department of Defense.......   262
        Prepared Statement of........................................   264
        Questions Submitted to.......................................   344
    Totushek, Vice Admiral John B., Chief, Naval Reserve, Reserves,
      Department of Defense..........................................   425
        Prepared Statement of........................................   435
        Questions Submitted to.......................................   473
        Statement of.................................................   434

    Visco, Fran, J.D., President, National Breast Cancer Coalition...   675
        Prepared Statement of........................................   676

    Washington, Robert, Sr., Fleet Reserve Association; Co-Chairman,
      The Military Coalition Health Care Committee...................   597
    Washington, Robert, Sr., Prepared Statement of...................   597
    Weaver, Cathy Lee................................................   634
    Weaver, Julia....................................................   634
    Weaver, Major General Paul A., Jr., USAF (Retired), on behalf of
      the Juvenile Diabetes Foundation International.................   634
        Prepared Statement of........................................   636
    West, Rear Admiral Richard D., U.S. Navy (Retired), President,
      Consortium for Oceanographic Research and Education............   583
        Prepared Statement of........................................   585
    White, Hon. Thomas E., Secretary of the Army, Department of the
      Army, Department of Defense....................................     1
        Prepared Statement of........................................     8
        Questions Submitted to.......................................    60
        Statement of.................................................     5

    Zakheim, Dov, Ph.D., Comptroller, Office of the Secretary,
      Department of Defense..........................................   487

                                 SUBJECT INDEX

                                  ----------

                             DEPARTMENT OF DEFENSE

                                Defense Agencies

                             MISSILE DEFENSE AGENCY

                                                                       Page
    Additional Committee Questions...................................   236
    Aggressive Testing Schedule......................................   236
    Airborne Laser (ABL)......................................225, 227, 228
    Availability of a Mature Effective BMDS..........................   236
    Boost Vehicle Testing............................................   228
    Booster Enhancements for Aegis...................................   237
    Evolutionary Capability-Base Acquisition Approach................   196
    Field Capability.................................................   198
    Ground Based Mid-Course Defense..................................   224
    Kodiak Targets Schedule..........................................   233
    Laser Funding....................................................   227
    MDA:
        National Team................................................   224
        Test Schedule................................................   236
        Testbed:
            Fort Greely..............................................   227
            Kodiak...................................................   233
    Medium Extended Air Defense System (MEADS).......................   232
    Miniature Kill Vehicle (MKV).....................................   223
    Missile Defense:
        Countermeasures..............................................   235
        Program......................................................   196
        Testbed......................................................   222
    Navy Integrating, AEGIS..........................................   227
    No Aegis Boost Phase Capability in Block 04......................   237
    Operational:
        Testbed......................................................   197
        Testing......................................................   216
    Patriot:
        Friendly Fire Incidents......................................   229
        System Performance...........................................   221
        Testing/Performance..........................................   229
    Sea Based X-Band Radar.........................................230, 231
    Space Tracking Surveillance System (STSS)........................   235
    Strategic Missile Defense Command................................   223
    Theater High Altitude Air Defense (THAAD)........................   234
    U.S. Navy Integration in Missile Defense.........................   222

                          Department of the Air Force

    A-10 and F-15 Aircraft...........................................    73
    Additional Committee Questions...................................   115
    Afghanistan......................................................    73
    Aging Aircraft...................................................    74
    Air:
        Expeditionary Force..........................................   118
        National Guard...............................................   113
        Power........................................................    71
        University...................................................   108
    Air Force:
        Academy.....................................................78, 101
            Investigation............................................    98
        Institute of Technology......................................   105
        Investment Budget............................................   117
    B-1..............................................................    73
    B-52 Bombers.....................................................   112
    Basic Military Training and Technical Training School............   115
    C-5..............................................................    73
        Aircraft.....................................................   109
    C-17........................................................77, 97, 108
    Combat Pay.......................................................   115
    CV-22............................................................   107
    Electronic Warfare...............................................   114
    Expeditionary Aerospace Force (EAF)..............................   120
    F/A-22...........................................................75, 77
        Raptor.......................................................   117
    Force Protection.................................................   116
    Global Hawk......................................................   109
    Guard and Reserve Financial Problems.............................   100
    Homeland Defense.................................................    72
    Iraq.............................................................    73
        War News Coverage............................................   112
    Iraqi Aircraft...................................................   100
    KC-135...........................................................    77
    Lackland Air Force Base..........................................    78
    Manpower.........................................................    74
    Medical Evacuation Mission.......................................   103
    Melrose Bombing Range............................................   106
    Mission Capable Rates............................................    76
    Next Horizon.....................................................    96
    Operation Iraqi Freedom..........................................    71
    Operation Noble Eagle............................................    77
    Personnel Transformation.........................................    99
    Predator.........................................................   106
        B............................................................   111
        Hellfire System..............................................   107
    Promotions.......................................................   104
    Range and Readiness Preservation Initiative......................   116
    Readiness........................................................    75
    Reserves.........................................................    99
    Russian SU-37....................................................    74
    767:
        Lease........................................................   114
        Tanker Lease.................................................    96
    Southwest Asia...................................................    78
    Space Programs...................................................   119
    Supplemental Appropriations......................................    76
    Tanker Fleet...................................................117, 119
    Transformation...................................................    72
    Unmanned Aerial Vehicle Pilots...................................   110
    What We Do.......................................................    81
    Where We're Going................................................    87
    Who We Are.......................................................    85

                             Department of the Army

    A Commitment to the Future.......................................    30
    Active Component (AC)/Reserve Component (RC) Mix.................    45
    Additional Committee Questions...................................    55
    Advanced Army Rapid Emplaced Bridge..............................    57
    Aging Helicopter Inventory.......................................    38
    Army:
        Heritage and Education Center................................    63
        Well-Being...................................................    13
    Aviation:
        Modernization................................................    53
        Training.....................................................    50
    Civilian Component...............................................    12
    Domestic and Foreign Bases.......................................    48
    End Strength.....................................................    34
    FCS:
        Fielding Schedule............................................    55
        Objective Force Role.........................................    55
        Vehicles.....................................................    62
    Fifth and Sixth Stryker Brigades.................................    32
    Force Protection.................................................    53
    Fresh Troops . . . Old Choppers..................................    38
    Future Requirements Costs........................................    43
    Global War on Terrorism..........................................    33
    Ground Services Industrial Enterprise (GSIE) Plan................    66
    High Mobility Trailers and Waste.................................    66
    Industrial Base..................................................    60
    Institutional Army...............................................    27
    Iowa Army Ammunition Plant.......................................    64
    Land Mines.......................................................    42
    Leader Development--Training Soldiers and Civilians, and Growing
      Lead-
      ers............................................................    14
    Legacy Force Modernization.......................................    55
    Logistics Transformation.........................................    51
    Oil Cleaning/Filtering Systems...................................    61
    Operational Army.................................................    21
    Operations in Iraq...............................................    54
    People--Our Most Valuable Resource...............................    11
    Readiness--Winning Our Nation's Wars.............................    15
    Realizing The Army Vision--People, Readiness, and Transformation.    11
    Reconstituting Deployed Forces...................................    56
    Recruiting.......................................................    35
    Reserve Component:
        Full-time Support (FTS)......................................    12
        Pay Consolidation............................................    57
        Recruiting...................................................    49
    Rock Island Arsenal..............................................    65
    Soldier:
        Deployment...................................................    35
        Equipment....................................................    41
    Space and Missile Defense Command................................    36
    Special Operations Command (SOCOM)...............................    46
    Status of Forces.................................................    53
    Strategic Environment--The Requirement to Transform..............    10
    Supplemental Appropriation.......................................    33
    The Army:
        At War and Transforming......................................     8
        Serving Today, Balancing Risk, Managing Transformation.......    10
    Training:
        Centers......................................................    48
        Ranges.......................................................    58
    U.S. Military Labors to Keep Aging Helicopters Airworthy; Hazards
      of Desert Landings.............................................    38
    Unmanned Aerial Vehicles.........................................    61
    White Sands:
        HELSTF.......................................................    58
        MTHEL........................................................    57
        Third Wave Outsourcing Plan..................................    64

                             Department of the Navy

    Additional Committee Questions...................................   190
    Building on Success..............................................   159
    Context for the Fiscal Year 2004 Budget Request: Succeeding in a
      Time of Great Consequence......................................   126
    Deployment Days..................................................   176
    Family Separation Allowance and Imminent Danger Pay..............   184
    Fiscal Year 2004 Budget: Building From a Solid Foundation........   127
    Fleet Size.......................................................   179
    Harrier..........................................................   179
    Homeporting......................................................   181
    HSV Plans........................................................   193
    Imminent Danger Pay and Family Separation Allowance..............   175
    Joint Strike Fighter (JSF).......................................   189
        (F-35) Program Progress......................................   191
    Lightweight 155 Howitzer Program.................................   184
    Littoral Combat Ship--Hull Form..................................   194
    Long-term HSV Plans..............................................   193
    Marine Corps Retention...........................................   178
    Mine Warfare Funding and Capability..............................   191
    Missile Defense..................................................   182
    Naval Forces--Southern Command...................................   190
    Naval Power 21: A Transformational Vision for the 21st Century...   134
    Navy:
        Programs in New Mexico.......................................   187
        Reserve......................................................   178
        Retention....................................................   177
    Navy-Marine Corps Team: National Seapower--Around the World,
      Around the Clock...............................................   126
    Operations and Maintenance.......................................   171
    Our Main Effort--Excellence in Warfighting.......................   165
    Patrol Coastal Craft.............................................   182
    Prior Year Shipbuilding Costs....................................   173
    Retiring Ships and Aircraft......................................   177
    Sea Basing.......................................................   172
    Shipbuilding.....................................................   179
    T-45 Cockpit 21..................................................   193
    Taking Care of Our Own...........................................   162
    The Way Ahead: Positioning Today's Navy and Marine Corps for
      Tomorrow's Challenges..........................................   137
    UAV Program......................................................   183
    V-22 Program...................................................172, 191

                                Medical Programs

    Additional Committee Questions...................................   308
    Air Medical Evacuation...........................................   300
    Best Health Care Business Practices..............................   297
    Combat Treatment in Iraq and Afghanistan..................312, 331, 347
    Critical Care Air Transport Teams................................   298
    Deployment of Medical Personnel......................309, 328, 331, 344
    Doctorate Program in Nursing..............................361, 363, 367
    DOD/VA Healthcare Resource Sharing...............................   351
    E-Health Technology..............................................   259
    Establishment of the Naval Medical Education and Training Command   256
    Expeditionary Medical Support Units..............................   262
    Family Centered Care.............................................   256
    Force Health Protection (FHP)........................250, 326, 341, 358
    Health Benefit...................................................   296
    Hospital Services Reduction......................................   307
    Improvement of Equipment for Combat Casualty Care................   332
    Increased Medical Costs..........................................   274
    Jesse Spiri Military Medical Coverage Act.................315, 334, 352
    Medical:
        Budget Shortfall.............................................   274
        Combat Technologies..........................................   279
        Research.....................................................   260
        Treatment Facilities...................319, 336, 354, 361, 363, 367
    Mental Health....................................................   281
    Military Family Access to Dental Care Act.................316, 335, 353
    Mobilized Reservists in Medical Specialties......................   309
    Monitoring the Health of Guard and Reserve Personnel......311, 329, 345
    Navy Medicine/DVA Resource Sharing...............................   258
    Number of Reservists:
        Not in Dental Class 1 or 2...................................   311
        With Medical Problems........................................   311
    Nurse Corps Grade Structure......................................   299
    Nurse Shortage...................................................   306
    Nursing Research..........................................361, 364, 367
    Operation Enduring Freedom.......................................   263
    Optimization..............................................327, 343, 358
    Our People.......................................................   253
    Patient Privacy (TRICARE)............................318, 335, 343, 353
    People...........................................................   295
    Percentage of Male Nurses........................................   308
    Personnel Readiness..............................................   252
    Population Health Programs.......................................   299
    Readiness........................................................   294
        Contingency Operations.......................................   250
    Recruiting.......................................................   300
        And Retention................264, 277, 314, 333, 350, 360, 363, 366
    Recruitment and Retention.................................359, 362, 364
    Remaining Medical and Dental Requirements........................   311
    Repercussions for Unfit Unit Members.............................   312
    Research on Composite Tissue Transplantation.....................   317
    Retention and Recruitment.................................320, 339, 356
    Specialized Training.............................................   307
    Student Loan Repayment...........................................   278
    T-Nex--Next Generation of TRICARE Contracts...............312, 332, 348
    TRICARE..........................................................   264
    Uniformed Services University of the Health Sciences.............   255
    War's Effect on the Nurse Corps Plan......................360, 362, 365

                                 National Guard

    Additional Committee Questions...................................   417
    Aging Aircraft...................................................   407
    Army National Guard 56th Stryker Brigade Combat Team.............   422
    Border Patrol....................................................   411
    C-17 Fleet at Jackson Air National Guard Facility................   411
    C-23 Sherpa Cargo Aircraft.......................................   423
    C-27J Spartan Tactical Aircraft..................................   424
    Call-ups of Guard Forces.........................................   415
    Chain of Command.................................................   420
    Communications...................................................   406
    Counterdrug Schools............................................421, 422
    Demobilization...................................................   406
    Employer Support.................................................   410
        Of the Guard and Reserve.....................................   421
    Force Protection.................................................   399
    Future Fixed Wing Aviation Requirements..........................   423
    Improved Efficiencies at NGB.....................................   419
    Improved WMD Response Capability.................................   418
    Limits on Deployment.............................................   402
    Merging Guard and Reserve Accounts...............................   401
    National Guard and Reserve Equipment.............................   415
    Operation Enduring Freedom.......................................   401
    Operation Iraqi Freedom..........................................   401
    Operation Noble Eagle............................................   401
    Overuse of Guard and Reserve.....................................   416
    Reducing Size of Guard and Reserve...............................   413
    Retention........................................................   408
    Seamless Environment.............................................   418
    Soldiers and Sailors Relief Act..................................   421
    Transformation Programs..........................................   420
    TRICARE Health Care Coverage.....................................   420

                            Office of the Secretary

    Additional Committee Questions...................................   534
    Applying Lessons Learned.........................................   491
    Assignment to Ambassador Bremer..................................   530
    Baghdad Anarchy Spurs Call For Help; Iraqis, U.S. Officials Want
      More Troops....................................................   512
    Balancing Risk.................................................493, 498
    Callup on Reserve Component Personnel............................   528
    Careful Targeting in Iraq........................................   524
    Commitments of Peacekeeping Forces...............................   516
    Defense Transformation Act.......................................   501
    Deployment of National Guard.....................................   538
    DOD-NASA Partnership.............................................   510
    F-22.............................................................   547
    Force Levels in Iraq Theater.....................................   529
    Forces Levels in Baghdad Area....................................   515
    High Alert Status Nuclear Weapons................................   545
    Improving Intelligence...........................................   510
    Improving Management.............................................   494
    Iowa Army Ammunition Plant (IAAP)................................   542
    Iraq.............................................................   539
    Looting in Iraq and Protecting Sites.............................   533
    LPD-17...........................................................   506
    Management Plans.................................................   539
    Missile Defense................................................518, 541
    Mr. Jay Garner...................................................   516
    National Oceanic and Atmospheric Administration..................   535
    932nd Airlift Wing...............................................   544
    Nuclear Capabilities in Iraq.....................................   532
    Passage of Defense Transformation Act............................   504
    Perchlorate......................................................   548
    Performance of Army Patriot PAC-3 System.........................   518
    Rebuilding Iraq..................................................   509
    Results..........................................................   500
    Robust Nuclear Earth Penetrator................................525, 546
    Ship Leasing and Defining Requirements...........................   519
    Situation in Iraq................................................   514
    Soliciting Information on Weapons of Mass Destruction............   528
    Stryker Brigades.................................................   505
    Sufficient Funding for Fiscal Year 2003..........................   504
    Testing..........................................................   547
    The Hurricane Hunters............................................   534
    Total Force Policy and TRICARE for Reservists....................   520
    Training Ranges and Facilities...................................   507
    Transforming to Meet Changing Threats............................   492
    U.S. Commitment and Command Arrangements.........................   523
    U.S. Hints at Boost in Forces Amid Iraqi Troubles................   531
    UAVs.............................................................   535
    Unmanned Vehicles................................................   511
    Utility of Robust Nuclear Earth Penetrator Class Weapons.........   546
    Visiting Troops in the Field and Tanker Leasing..................   502
    Weapons of Mass Destruction in Iraq............................521, 539

                                    Reserves

    Additional Committee Questions...................................   469
    AEF CY02--In Review..............................................   452
    Army Reserve Transformation......................................   469
    Army Reserve's Role in Rebuilding of Iraq........................   470
    Attrition........................................................   458
    Current Readiness................................................   444
    Demobilization...................................................   448
    Developing our Airmen............................................   449
    Equipment:
        Readiness....................................................   483
        Shortfalls...................................................   472
    F/A-18 Aircraft Upgrades.........................................   467
    Future Vector....................................................   456
    Highlights of 2002...............................................   449
    Hurricane Hunters................................................   466
    Impact of Mobilization on Budget Request.........................   475
    Infrastructure...................................................   445
    Integrating Operations...........................................   452
    Lessons Learned..................................................   478
        From Most Recent Mobilization................................   471
    Littoral Surveillance System (LSS).............................465, 474
    Marines and Their Families.......................................   442
    Mobilization.....................................................   447
        Of Fiscal Year 2004 Budget Request...........................   470
    Modernization....................................................   448
        And Sustainment Critical Shortfalls..........................   472
        And Transformation...........................................   445
    Naval Coastal Warfare Units Role in Homeland Security............   466
    Naval Reserve:
        Equipment List...............................................   474
        Retirement Data..............................................   463
    Operation Iraqi Freedom..........................................   481
        Mobilization.................................................   478
    Quality of Life Initiatives......................................   451
    Readiness........................................................   448
    Recapitalization of the Naval Reserve............................   473
    Reconstitution of Army Reserve Forces............................   470
    Recruiting.......................................................   450
        And Retention................................................   428
    Redesign of the Naval Reserve....................................   473
    Reserve:
        Employer Support.............................................   476
        Equipment Shortfalls.........................................   480
        Health Care................................................474, 476
        Mobilization Lessons Learned.................................   475
    Reservists.......................................................   483
    Retention......................................................450, 464
    Retirement.......................................................   460
        Policy.......................................................   457
    Support for Employers of Reservists..............................   480
    Supporting Employers of Reservists...............................   471
    Technology to the Warfighter.....................................   453
    The Big Picture..................................................   451
    Transformation...................................................   478
        Programs.....................................................   481
            In Fiscal Year 2004 Budget Request.......................   470
    TRICARE:
        Benefits Extension...........................................   480
        Health Care Coverage.......................................471, 482
    Your Marine Corps Reserve Today..................................   441