[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



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                                 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.

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

    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.

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

    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\
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    \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.
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    \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.
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    The DVHIP is a model program of efficient and effective 
collaboration between DOD and DVA.

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

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

Additional DVHIP Accomplishments and Ongoing Research Initiatives
    Provided successful rehabilitation and return to work and community 
re-entry for active duty military personnel and veterans.
    Established the War on Terrorism Brain Injury Registry to identify 
individuals with brain injury and examine clinically relevant issues in 
the management of brain injury sustained in theatre.
    Ongoing studies are being conducted with Army paratroopers and 
cadets and U.S. Marines at Fort Bragg, West Point, and Camp Pendleton. 
These studies are investigating brief evaluation instruments for use on 
the battlefield to determine which injured service members require 
immediate treatment and which can return to duty. The goal of these 
studies is to preserve our nation's fighting strength while conserving 
medical resources for those injured and requiring treatment.
    Completed enrolling patients in a research protocol on functional 
rehabilitation versus cognitive rehabilitation for severe brain injury.
    A randomized controlled study of sertraline for post concussive 
syndrome is being carried out in all DVHIP military and VA sites.
    Started new randomized controlled trial of valproate for brain 
injury related agitation at James A. Haley Veterans Hospital, Tampa, 
Florida.
    A new DVHIP website is currently under construction. The website 
will provide information to individuals with brain injury, their 
families and caregivers, as well as to clinicians, researchers and the 
general public.

Fiscal year 2004 Goals
    Expand clinical capacity to meet the need to care for an increasing 
number of injured military personnel and veterans.
    Improve rehabilitation and treatment program for active duty 
service members with mild cognitive impairment following possible 
chemical or biological exposure.
    Establish a multi-center trial to provide the first evidence on the 
effectiveness of cognitive rehabilitation and stimulant medication 
early in recovery from severe brain injury.
    Conduct the study of enhanced protection from parachute injury by 
field testing approved novel helmet configurations at Fort Bragg.
    Develop return to duty guidelines through analysis of data 
collected in the West Point sports concussion study and the Fort Bragg 
concussion study.
    Examine biomarkers in mild brain injury and injury recovery in 
collaboration with Ron Hayes, Ph.D. at the Evelyn F. and William L. 
McKnight Brain Institute at the University of Florida.
    Examine the utility of mobile transcranial Doppler ultrasonography 
to identify cerebral blood flow alterations in mild brain injury and 
recovery patterns.
    Report to the U.S. Army the findings from the War on Terrorism 
Brain Injury Registry regarding incidence of closed head injury and the 
impact of early wound closure in penetrating brain injury.
    Extend outcomes research through the evaluation of long-term work 
and duty status in DVHIP rehabilitation trial participants.
    Disseminate evidence based guidelines on pharmacological management 
of neurobehavioral consequences of brain injury.
    Expand the DVHIP Registry to include patients from additional DVA 
and DOD medical facilities. Broaden the spectrum of care for military 
personnel and veterans who have sustained brain injuries by using the 
DVHIP Registry to identify individuals in need of additional treatment 
and support.
    Expand the content and services of the DVBIC website. Future 
website applications will include enhanced educational materials and 
the capability to make referrals and gain access to care.
Conclusion
    As a part of the military health program, the DVHIP is in a unique 
position to help prevent, treat, and provide education regarding brain 
injury and to lead efforts to better the lives of active duty and 
retired military personnel affected by brain injury. The DVHIP stands 
ready to assist in the care of troops injured in any and all potential 
hostilities.
    I respectfully urge your support for $5 million for the DVHIP in 
the fiscal year 2004 Defense Appropriations bill in the DOD Health 
Affairs budget under Operation and Maintenance to continue this 
important program.

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

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

             Prepared Statement of Captain Marshall Hanson


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

                CURRENT AND FUTURE ISSUES FACING DEFENSE

    The Associations for America's Defense would like to thank this 
Committee for the stewardship that it has demonstrated on issues of 
Defense. Its pro-defense and non-partisan leadership sets the example.
    In keeping with this, A4AD would like to submit what its membership 
feel are the top equipment requirements for the Armed Forces. Over the 
last six months, A4AD has compiled this list to provide the committee 
with a consolidated listing which does not favor a particular service 
and is a compilation from numerous sources. Both Active and Reserve 
requirements are provided for the major four of the uniformed services. 
The services are not listed in priority order.

Top Equipment Requirements:
            Air Force Active:
    F/A-22's
    Tanker Modernization
    Space-Based Infrared System SBIRS
            Air Force Reserve:
    C-17's (replaces aging C-141)
    F-16 Upgrades; sensor, targeting pods, displays
    A-10 Targeting Pods
    C-40's Medivac (replaces aging C-9A)
            Air Guard:
    C-17's
    KC-135 Re-engine
    Litening II targeting pods
            Army Active:
    Recapitalize The M1A1 & M2 force
    AH-64 and CH-47 Aviation Upgrades
    Objective Force Future Combat Systems
            Army Reserve:
    Light Medium Tactical Vehicles (LMTV)
    Medium Tactical Vehicles (MTV)
    High Mobility Multi-Purpose Wheeled Vehicle (HMMWV)
    IHFR Radio
            Army Guard:
    UH-60 Black Hawks
    AH-64 Apaches
            Active Marine Corps:
    JSF Joint Strike Fighter
    V-22 Osprey Program
    AAAV Program
            Reserve Marine Corps (and Active):
    F/A-18 ECP-583 Upgrade
    CH-53E HNVS ``B'' Kits (Forward Looking Infrared)
    Initial Issue equipment
            Active Navy:
    Littoral Combat Ship
    F/A-18 E/F Procurement
    DD(X)
            Naval Reserve:
    C-40A's Airlift Aircraft (replace aging C-9B)
    LITTORAL SURVEILLANCE SYSTEM, LSS
    F/A-18 ECP-560 Upgrades
    Language delaying decommissioning of Navy's Coastal Patrol Craft 
(PCs) and Aviation Squadrons
    Equipment requirements on the above equipment list were purposely 
broken out by Active and Reserve requirements.
Maintaining the Reserve Equipment List
    Issue.--The Active Duty leadership has fallen short of fulfilling 
the Congressional mandate of responsibility for funding Reserve as well 
as Active Duty equipment through budgetary planning. The active 
solution seems to be suggesting that Reserve equipment should be 
returned to the Active Duty. This would be a mistake.
    Position.--The overwhelming majority of Reserve and Guard members 
join the RC to have hands-on experience with equipment. The training 
and personnel readiness of Guard and Reserve members depends on 
constant hands-on equipment exposure. Historical records show that 
Guard and Reserve units maintain hardware and equipment at or higher 
than average material readiness and often have better training 
readiness.
    In Operation Iraqi Freedom, Reserve and Guard units have proven 
their readiness. Current and future war fighting requirements will need 
these highly qualified units when the Combatant Commanders require 
fully ready units. The personnel readiness, retention, and training of 
Reserve and Guard members will depend on them having Reserve equipment 
that they can utilize, maintain, train on, and deploy with when called 
upon.
    Depending on Active Component hardware has never been successful 
for many functional reasons. History shows that this can only be 
accomplished through Reserve and Guard equipment, since the training 
cycles of Active Components are rarely, if ever, synchronized with the 
training or exercise times of Guard and Reserve units. The A4AD 
recommends strengthening the appropriations for Reserve and Guard 
equipment in order to maintain highly qualified trained Reserve and 
Guard personnel.
    We ask this committee to provide appropriations against unfunded 
equipment requirements. To appropriate funds to Reserve equipment would 
help emphasize to the Active Duty that it is exploring dead-ends by 
suggesting the transfer of Reserve equipment away from the Reservists.

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

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

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

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

                               CONCLUSION

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

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

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

                Prepared Statement of Steven L. Garrett

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

                 HEALTH CARE FOR MILITARY BENEFICIARIES

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

                     OTHER MILITARY RETIREE ISSUES

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

                               A CONCERN

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

                               CONCLUSION

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

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

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

                 Prepared Statement of Joseph L. Barnes

                              INTRODUCTION

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

                    FISCAL YEAR 2004 DEFENSE BUDGET

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

                        QUALITY OF LIFE PROGRAMS

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

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

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

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

Health Care

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

Education

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

Retirement

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

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

Military Construction

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

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

Other Issues

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

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

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

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

                               CONCLUSION

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

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

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

               Prepared Statement of Dr. James A. Fabunmi

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

                                SUMMARY

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

                   SHORTAGE OF AMERICAN S&T WORKFORCE

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

                 COMPONENTS OF TOP GRADE S&T EDUCATION

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

                         PROPOSED STWAS PROGRAM

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

                 THE AMERICAN HERITAGE DEFENSE ALLIANCE

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

                       RECOMMENDED APPROPRIATIONS

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

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

                     ADDITIONAL SUBMITTED STATEMENT

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

       Prepared Statement of the Ovarian Cancer National Alliance

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

         DEPARTMENT OF DEFENSE OVARIAN CANCER RESEARCH PROGRAM

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

         THE DOD OCRP HAS AN OUTSTANDING RECORD OF ACHIEVEMENTS

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

                ADDITIONAL INFORMATION ABOUT THE PROGRAM

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

                         CONCLUSION OF HEARING

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


       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

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