    [Senate Hearing 108-676]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 108-676

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 SECOND SESSION

                                       ON

                               H.R. 4613/S. 2559

      AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2005, AND FOR OTHER PURPOSES

                                   __________

                             Department of Defense
                           Nondepartmental witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

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

                        U.S. GOVERNMENT PRINTING OFFICE
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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
                                  Tom Hawkins
                                Robert J. Henke
                                  Lesley Kalan
                                Mazie R. Mattson
                                  Brian Potts
                                 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

                                  ----------

                             Monday, March 1, 2004

                                                                       Page

    Department of Defense............................................     1

                            Wednesday, March 3, 2004

    Department of Defense: Department of the Army....................    39

                           Wednesday, March 10, 2004

    Department of Defense: Department of the Navy....................    89

                           Wednesday, March 24, 2004

    Department of Defense: Department of the Air Force...............   167

                            Wednesday, April 7, 2004

    Department of Defense:
        National Guard...............................................   215
        Reserves.....................................................   275

                           Wednesday, April 21, 2004

    Department of Defense: Missile Defense Agency....................   315

                           Wednesday, April 28, 2004

    Department of Defense: Medical Programs..........................   347

                             Wednesday, May 5, 2004

    Nondepartmental witnesses........................................   429

                            Wednesday, May 12, 2004

    Department of Defense: Office of the Secretary...................   577

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                             MONDAY, MARCH 1, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:31 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Burns, Inouye, and Byrd.

                             DEPARTMENT OF DEFENSE

    STATEMENT OF HON. DOV S. ZAKHEIM, Ph.D., UNDER
                SECRETARY OF DEFENSE (COMPTROLLER)
    ACCOMPANIED BY LIEUTENANT GENERAL JAMES E. CARTWRIGHT, U.S. MARINE
                CORPS, J-8, JOINT CHIEFS OF STAFF

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning, Mr. Secretary. I take it we
    can assume from your presence that it was a friendlier dog than
    originally thought. Happy to have you back with us.
        Dr. Zakheim. Thank you, Mr. Chairman.
        Senator Stevens. As we meet today, our servicemen and women
    remain engaged in critical missions in Iraq, Afghanistan, and
    around the globe. They are the ones that are fighting and
    winning this global war, the war on terrorism. Since this time
    last year, we have removed a dangerous, brutal tyrant in Iraq.
    Sadly, more than 500 members of our armed services have lost
    their lives in this struggle. The families of those lost should
    know that their loved ones have changed history for the good,
    have liberated a nation of 25 million people, and made our
    Nation more secure.
        This is the first of 10 hearings this subcommittee will
    hold to review the Defense Department's budget request. We
    thank you for agreeing to change the date. We had a conflict
    before. The President's request includes $401.7 billion for the
    Department of Defense (DOD), a 7 percent increase over fiscal
    year 2004. That request reflects the President's commitment to
    prosecute the global war on terrorism. It balances the
    military's long-term needs for transformation and modernization
    with the need to conduct the current operations around the
    globe. The budget emphasizes readiness and training and
    provides for quality of life for our troops.
        The request continues several years of solid increases in
    the Defense Department budget. The cumulative growth in the
    Defense Department's budget over the last 3 years has been 33
    percent.
        Some say that this budget should include the fiscal year
    2005 contingency costs for terrorism because those costs are
    not known today. Another word for ``contingency'' is
    ``unpredictable.'' The situation is too dynamic, too
    unpredictable to build a reliable budget 18 months in advance.
    I will have some questions about that as we go forward, Dr.
    Zakheim.
        Before you make your full statement, which is a part of the
    committee's record automatically now, I would turn to my
    colleague and co-chairman from Hawaii for his opening remarks.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Thank you very much.
        This morning I want to join my chairman in welcoming you,
    Dr. Zakheim, as the first witness before the committee. It is a
    pleasure to join my colleague and friend Chairman Stevens as we
    begin this review.
        Incidentally, this is the 24th year that our chairman has
    presided over this subcommittee, and he and I have been
    together throughout this time and I for one think it has been a
    great partnership.
        As we turn our attention to the request of fiscal year
    2005, we see a regular defense appropriation request that will
    exceed $400 billion. Mr. Chairman, I probably do not need to
    remind you of this, but in your first year as chairman
    President Ronald Reagan offered a request for $200 billion to
    this subcommittee. So here we are almost 25 years later and the
    defense budget has just about doubled.
        Of course, this request that we are considering today does
    not include funding for our overseas commitments in Afghanistan
    and in Iraq, so unavoidably the total defense will exceed much
    more than $400 billion before the end of the fiscal year.
        Dr. Zakheim, since this administration established itself
    the defense appropriations request has increased by more than
    $100 billion or 35 percent, and that does not include the cost
    of terrorism. As a result, many of our colleagues wonder
    whether this year's increase of $25.5 billion on top of the
    estimated $50 billion supplemental that will likely be required
    to support our forces in Iraq is really necessary. I hope in
    your testimony today you can explain why the increase you are
    requesting is essential.
        In addition, my colleagues want to know how the
    administration intends to proceed with the many new benefit
    programs that have been established over the past few years,
    particularly health care for our Reserve families.
        Finally, I have been asked by my colleagues if we will be
    able to afford all the conventional weapon systems that are in
    development. They question this because your budget reserves
    most of the increases in investment programs for space and
    missile defense. So, Dr. Zakheim, I hope you will be able to
    address these issues today before the committee.
        Mr. Chairman, it is good to be back here with you again,
    sir.
        Senator Stevens. Thank you.
        Senator Byrd, do you have a statement, sir.

                      STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you, Mr. Chairman. I will not have a
    statement at this time except to welcome Dr. Zakheim and I look
    forward to his testimony. Thank you.
        Senator Stevens. General Cartwright, we are happy to have
    you also with us.
        Mr. Secretary, do you have a statement for us?
        Dr. Zakheim. Yes, I do, Mr. Chairman.
        Senator Stevens. Would you pull that mike up a little bit,
    please.
        Dr. Zakheim. Is that better, sir?
        Senator Stevens. Thank you.
        Dr. Zakheim. Mr. Chairman, Senator Inouye, Senator Byrd:
    First I want to apologize for sounding like sandpaper. I do
    have some kind of flu and maybe it is better that we are
    sitting as far apart as we are. Poor General Cartwright here is
    a little closer to me, but I hope he will not catch anything.
        I want to thank you for the opportunity to discuss
    President Bush's fiscal year 2005 Department of Defense budget
    with you. Because the committee and its staff have received
    considerable information in support of the budget request, I am
    going to limit my statement to key issues that are related to
    my direct responsibilities as Under Secretary of Defense,
    Comptroller.
        Last week, actually the week before, I visited Afghanistan
    and Iraq and I would like to report that our troops there
    continue to perform magnificently. They appreciate the
    steadfast support that is given to them by the Congress, and we
    continue to witness progress in both of those countries. We
    also enjoy the full cooperation of our allies and partners as
    we work with Iraqis and Afghans to provide for their security,
    stability, and prosperity.
        I especially want to note the success of our Provincial
    Reconstruction Teams, the so-called PRT's, in Afghanistan and
    the contribution of our allies to PRT's. I visited the North
    Atlantic Treaty Organization (NATO) German PRT in Kunduz. The
    German forces are doing a marvelous job and are well liked by
    the local townspeople. In Iraq, I visited the lead elements of
    the Japanese contingent in As-Samawah, the Spanish brigade in
    Ad-Diwaniyah, and the Polish multinational division
    headquarters in Al-Hillah.
        These units are having a major, positive impact on the
    local populace and are demonstrating that the international
    community shares America's desire to help Iraq emerge from 30
    years of dictatorial darkness.
        For the current fiscal year, our fiscal year 2004
    supplemental appropriations provided sufficient resources to
    enable the Department to finance its incremental costs for
    operations in Iraq, Afghanistan, and the global war on terror
    through the end of September. We will continue to provide
    service support and transportation for our allies who are
    contributing forces to coalition operations in Iraq, but who
    nevertheless need some financial assistance.
        We cannot yet determine the scope of the United States
    (U.S.) operations in Afghanistan and Iraq in fiscal year 2005.
    The President's request therefore does not reflect possible
    incremental costs of those operations. It is extremely
    difficult to estimate what demands we might have to meet later
    this year and next year, particularly after the election in
    Afghanistan and after sovereignty is transferred to the Iraqi
    people, roughly in the June-July timeframe. Depending on the
    circumstances, we could face the need for either more or fewer
    troops and more or less intensive operations.
        I should also note that there is a 3-month lag in the
    availability of our data for actual costs in Afghanistan and
    Iraq. As of today, we only have figures for the costs of
    operations in November. Thus we will not know until the fall
    what our actual costs were for the summer, when sovereignty
    will have reverted to the Iraqi people.
        The Department does not anticipate a further request for
    DOD supplemental appropriations during the rest of calendar
    year 2004. Therefore, for several months into fiscal year 2005
    the Department will need to cover its incremental costs by
    drawing down appropriated funds that were budgeted for
    expenditure later in that fiscal year. We have done that in the
    previous two fiscal years and we can do so again in fiscal year
    2005 as long as the Congress moves quickly to approve a
    supplemental early in the next calendar year.
        One of the most important ways in which the Congress can
    support the global war on terrorism is to support three special
    authorities we have requested. The first one is for $500
    million to train and equip military and security forces in
    Iraq, Afghanistan, and friendly nearby regional nations, to
    enhance their capability to combat terrorism and support U.S.
    operations in Iraq and Afghanistan. It is critical that this
    authority include security forces because the terrorism threat
    in Iraq is inside its borders. Security forces, not the New
    Iraqi Army, play the primary role in confronting this threat.
        The second authority is the Commander's Emergency Response
    Program (CERP) for $300 million to enable military leaders in
    Iraq and Afghanistan to respond to urgent humanitarian relief
    and reconstruction needs. This has been a remarkably successful
    program. With quick turnaround projects averaging about $7,000
    each, commanders not only help people in their operations area,
    but also gain their support in defeating terrorists and
    building themselves a better future. As we have already done in
    fiscal year 2004, we propose to expand the CERP to Afghanistan,
    as well as to continue the program in Iraq.
        Finally, we are requesting authorities for increased
    drawdown, $200 million, under the Afghan Freedom Support Act,
    which would provide additional help for the Afghan National
    Army (ANA). In the current pivotal year, this authority is
    critical for advancing democracy and stability in Afghanistan.
    During my visit there, everyone I met gave very high marks to
    the professionalism and competence of the ANA.
        The President's fiscal year 2005 budget does not request
    specific appropriations for these three authorities and
    therefore the Department would need to reprogram funding to use
    them. This underscores the importance of Congress increasing
    the Department's general transfer authority to $4 billion,
    which would still represent just 1 percent of total DOD
    funding.
        Higher general transfer authority would also give us a
    greater ability to shift funds from less pressing needs to fund
    must-pay bills and emerging requirements. As we have seen in
    the past 3 years, such requirements have become a constant
    feature of our military programs. And as was mentioned just
    before, it is not all that long ago that our budget was in the
    vicinity of $200 billion, and the general transfer authority
    that we now have essentially relates to that timeframe. So that
    if we are asked to be more responsible, and rightly asked to be
    more responsible, about managing our cash, we need to have the
    ability to do so in a reasonable way.
        One other authority would be especially helpful, given the
    uncertainty we face in the global war on terrorism. We need to
    convert operations and maintenance to a 2-year appropriation
    account. This would preclude wasteful end-of-fiscal-year
    scrambling, help us cover emerging requirements, and enhance
    our ability to derive the very best value from every
    appropriated dollar.
        The President's fiscal year 2005 budget reflects the
    administration's continuing commitment to our military men and
    women and their families. It requests a 3.5 percent base pay
    raise and completes the elimination of average out of pocket
    housing costs for military personnel living in private housing.
    Prior to fiscal year 2001, the average service member had to
    absorb over 18 percent of these housing costs.
        The budget also sustains the excellent health care benefits
    available to military members, retirees, and their families and
    keeps us on track to eliminate nearly all inadequate military
    family housing units by fiscal year 2007, with complete
    elimination in fiscal year 2009. Privatization is enabling the
    Department to multiply the benefits of its housing budgets and
    get more military families into top-quality accommodations much
    sooner than would otherwise be possible. As of February 2004,
    27 privatization projects have been awarded for a total of
    55,000 units. We hope to get up to 136,000 by the end of fiscal
    year 2005.
        Taking good care of the Department's people, both military
    and civilian, includes providing them quality facilities in
    which to work. To that end, the fiscal year 2005 request funds
    95 percent of the services' facilities sustainment requirements
    and continues to improve our facilities recapitalization rate.
    For the first time, the percentage that is being allotted
    toward sustainment applies equally to all services across the
    board.
        Providing our people quality facilities requires that we
    not expend money on redundant facilities and that our basing
    structure be geared closely to our global strategy and
    commitments. We need the 2005 Base Realignment and Closure
    Commission to decide how best to streamline and restructure DOD
    facilities so that we can make the most out of funding and
    optimally support our global strategy.
        The fiscal year 2005 request strongly supports force
    protection. Although we are on track to meet most Central
    Command requirements during the current fiscal year, I want to
    give you some highlights of our ongoing force protection
    program.
        Interceptor body armor. U.S. Central Command (CENTCOM)
    plans to have 175,000 of these body armor sets in theater by
    the end of March, the end of this month, which will fully
    support its requirements. But in addition, the 2005 budget
    requests $40 million to sustain production of body armor sets
    at 25,000 sets per month until the full Army requirement is
    met.
        We are also ramping up our up-armored high mobility
    multipurpose wheeled vehicle (HMMWV's). Production is going up
    to 220 per month by May. Production plus redistribution of
    these up-armored HMMWV's that are on hand will meet CENTCOM
    requirements by December, and we are asking for an additional
    $156 million in fiscal year 2005 to procure another 818 of
    these.
        There are various detection and jamming devices in theater
    already. Others will begin arriving in theater in March 2004,
    and these are to deal with improvised explosive devices (IED).
    Our fiscal year 2005 budget supports increased production and
    accelerated research and development of other means and the
    same means to deal with the IED's.
        Then there are the vehicle ballistic protection kits. The
    Army's plan for add-on armor kits is on track to meet CENTCOM
    requirements for HMMWV's by October of this year and for other
    critical vehicles by December 2004. We expect some 6,300 HMMWV
    add-on armor kits to be delivered by July of this year.
        I also want to highlight how the Department is transforming
    the way in which it conducts its business. Our primary
    initiative in this regard is the Business Management
    Modernization Program. This is a massive undertaking involving
    virtually all management functions and it will take several
    more years to complete. We are in the process of transitioning
    from more than 2,000 mostly incompatible management information
    systems to a much smaller number of fully compatible systems
    that will provide leaders everything needed for informed
    decisionmaking. We will streamline processes and integrate
    systems to enable DOD decisionmakers to get timely and accurate
    information to optimize the allocation of defense resources and
    people. The fiscal year 2005 budget requests about $100 million
    to continue the evolution and extension of our business
    enterprise architecture, which is guiding the overhaul. We
    still anticipate that the architecture will lead to a
    functional accounting system by fiscal year 2007. We have been
    making progress for a couple of years, and we still believe we
    are on track.
        Another initiative I want to highlight is military to
    civilian conversion. The Department has identified over 50,000
    positions currently filled by military personnel for conversion
    to positions supported by DOD civilians or contractors. The
    services have begun to convert 10,000 positions in this fiscal
    year. The fiscal year 2005 budget includes $572 million to
    achieve the conversion of another 10,070 positions.
        I would like to note that the Defense Finance and
    Accounting Service (DFAS), which is part of my organization,
    has already converted several hundred positions previously
    filled by Air Force personnel. The airmen are now available to
    the Air Force, which can retrain them to fulfil its
    requirements.
        In a similar vein, the Army has been retraining the
    soldiers formerly assigned to DFAS. Again, we are talking about
    several hundred personnel. In particular, many of these people
    are being retrained at Fort Leavenworth to serve as military
    police, a specialty which currently is in especially great
    demand. At the same time, DFAS, the Financing and Accounting
    Service, Finance and Accounting Service, does not need to hire
    as many civilians to replace their uniformed predecessors. So
    DFAS will be more efficient as well.

                               PREPARED STATEMENT

        These are a few of the highlights of the fiscal year 2005
    budget and related DOD activities. Together with General
    Cartwright, who is the head of the J-8, which is the Joint
    Staff's Programming and Analysis Division--and it is a much
    longer formal title, but I think that sums it up--we would be
    happy to address your questions on these or any other defense
    budget matters. Thank you.
        [The statement follows:]

               Prepared Statement of the Honorable Dov S. Zakheim

        Mr. Chairman, members of the Committee, thank you for this
    opportunity to discuss President Bush's fiscal year 2005 Department of
    Defense (DOD) budget. Because the Committee has received considerable
    information in support of the budget request, I will limit my statement
    to key issues that are related to my responsibilities as Under
    Secretary of Defense (Comptroller).

                      FUNDING THE GLOBAL WAR ON TERRORISM

        Two weeks ago I visited Afghanistan and Iraq, and so I will begin
    by reporting that our troops there continue to perform magnificently.
    They appreciate the steadfast support given them by this Congress. We
    continue to witness progress in both countries, and enjoy the full
    cooperation of our allies and partners as we work with Iraqis and
    Afghans to provide security, stability and prosperity to their
    respective countries. I especially want to note the success of our
    Provincial Reconstruction Teams (PRTs) in Afghanistan, and the
    contribution of our allies to PRTs. I visited the NATO/German PRT in
    Kunduz. They are doing a marvelous job and are well-liked by the local
    townspeople.
        In Iraq, I visited the lead elements of the Japanese contingent in
    As-Samawah, the Spanish brigade in Ad-Diwaniyah, and the Polish multi-
    national division headquarters in Al-Hillah. These units are having a
    major, positive impact on the local populace, and are demonstrating
    that the international community shares America's desire to help Iraq
    emerge from thirty years of dictatorial darkness.
        For the current fiscal year, our fiscal year 2004 supplemental
    appropriations provide sufficient resources to enable the Department to
    finance its incremental costs for operations in Iraq, Afghanistan, and
    the global war on terrorism through the end of September. We will
    continue to provide service support and transportation for allies who
    are contributing forces to coalition operations in Iraq, but who
    nevertheless need some financial assistance.
        We cannot yet determine the scope of U.S. operations in Afghanistan
    and Iraq in fiscal year 2005. The President's request therefore does
    not reflect possible incremental costs for those operations. It is
    extremely difficult to estimate what demands we might have to meet
    later this year and next year--particularly after the election in
    Afghanistan and after sovereignty is transferred to the Iraqi people.
    Depending on the circumstances, we could face the need for either more
    or fewer troops--and more or less intensive operations.
        I should note that there is a three-month lag in the availability
    of our data for actual costs in Afghanistan and Iraq. As of today, we
    only have figures for the costs of operations in November. Thus we will
    not know until the fall what our actual costs were for the summer, when
    sovereignty will have reverted to the Iraqi people.
        The Department does not anticipate a further request for DOD
    supplemental appropriations during the rest of calendar year 2004.
    Therefore, for several months into fiscal year 2005, the Department
    will need to cover its incremental costs by drawing down appropriated
    funds that were budgeted for expenditure later in that fiscal year. We
    have done this in the previous two fiscal years, and can do so again in
    fiscal year 2005, as long as the Congress moves quickly to approve a
    supplemental early in the next calendar year.

                          NEEDED ENHANCED AUTHORITIES

        One of the most important ways in which Congress can support the
    global war on terrorism is to support three special authorities we have
    requested:
        (1) $500 million to train and equip military and security forces in
    Iraq, Afghanistan, and friendly nearby regional nations to enhance
    their capability to combat terrorism and support U.S. operations in
    Iraq and Afghanistan. It is critical that this authority include
    security forces because the terrorism threat in Iraq is inside its
    borders. Security forces--not the New Iraqi Army--play the primary role
    in confronting this threat.
        (2) The Commanders Emergency Response Program ($300 million) to
    enable military leaders in Iraq and Afghanistan to respond to urgent
    humanitarian relief and reconstruction needs. This has been a
    remarkably successful program. With quick turnaround projects averaging
    about $7,000 each, commanders not only help people in their operations
    area, but also gain their support in defeating terrorists and building
    themselves a better future. As we have already done in fiscal year
    2004, we propose to expand CERP to Afghanistan, as well as to continue
    the program in Iraq.
        (3) Increased drawdown authority ($200 million) under the
    Afghanistan Freedom Support Act, to provide additional help for the
    Afghan National Army. During this pivotal year, this authority is
    critical for advancing democracy and stability in Afghanistan. During
    my visit to Afghanistan, everyone I met gave very high marks to the
    professionalism and competence of the ANA.
        The President's fiscal year 2005 budget does not request specific
    appropriations for these three authorities, and therefore the
    Department would need to reprogram funding to use them. This
    underscores the importance of Congress increasing the Department's
    General Transfer Authority (GTA) to $4 billion--which would still
    represent just one percent of total DOD funding. Higher GTA also would
    give us a greater ability to shift funds from less pressing needs to
    fund must-pay bills and emerging requirements. As we have seen in the
    past three years, such requirements have become a constant feature of
    our military programs.
        One other authority would be especially helpful, given the
    uncertainty we face in the global war on terrorism: we need to convert
    Operation and Maintenance (O&M) to a two-year appropriation account.
    This would preclude wasteful end-of-fiscal-year scrambling, help us
    cover emerging requirements, and enhance our ability to derive the very
    best value from every appropriated dollar.

                           DOING RIGHT BY OUR PEOPLE

        The President's fiscal year 2005 budget reflects the
    Administration's continuing commitment to our military men and women
    and their families. It requests a 3.5 percent base pay raise and
    completes the elimination of average out-of-pocket housing costs for
    military personnel living in private housing. Prior to fiscal year 2001
    the average service member had to absorb over 18 percent of these
    housing costs. The budget also sustains the excellent health care
    benefits available to military members, retirees and their families.
    And it keeps us on track to eliminate nearly all its inadequate
    military family housing units by fiscal year 2007, with complete
    elimination in fiscal year 2009.
        Taking good care of the Department's people, both military and
    civilian, includes providing them quality facilities in which to work.
    To that end, the fiscal year 2005 request funds 95 percent of the
    Services' facilities sustainment requirements and continues to improve
    our facilities recapitalization rate. For the first time, this
    percentage applies equally to all Services.
        Providing our people quality facilities requires that we not waste
    money on redundant facilities and that our basing structure be geared
    closely to our global strategy and commitments. We need the 2005 Base
    Realignment and Closure (BRAC) Commission to decide how best to
    streamline and restructure DOD facilities so that we can make the most
    out of our funding and optimally support our global strategy.

                                FORCE PROTECTION

        The fiscal year 2005 request strongly supports force protection,
    although we are on track to meet most Central Command (CENTCOM)
    requirements during the current fiscal year. Following are the
    highlights of our force protection program:
      --Interceptor Body Armor (IBA).--CENTCOM plans to have 175,000 IBA
            sets in theater by the end of March, which will fully support
            its requirements. The fiscal year 2005 budget requests $40
            million to sustain production of IBA at 25,000 sets per month
            until the full Army requirement is met.
      --Up armored HMMWV (UAHs).--Production will ramp up to 220 per month
            by May. Production, plus redistribution of UAHs on hand will
            meet CENTCOM requirements by December. The fiscal year 2005
            request is $156 million to procure 818 UAHs.
      --Improvised explosive device (IED) jamming/change detection
            technology.--Various detection/jamming devices are in theater.
            Others will begin arriving in theater in March 2004. Our fiscal
            year 2005 budget supports increased production and accelerated
            research and development.
      --Vehicle ballistic protection kits.--The Army's plan for add-on
            armor kits is on track to meet CENTCOM requirements for HMMWV
            by October 2004, and for other critical vehicles by December
            2004. Some 6,310 HMMWV add-on armor kits are expected to be
            delivered by July 2004.

                       TRANSFORMING HOW DOD DOES BUSINESS

        I also wish to highlight how the Department is transforming the way
    in which it conducts its business.
        Our primary initiative in this regard is the Business Management
    Modernization Program (BMMP). This is a massive undertaking involving
    virtually all DOD management functions, and it will take several more
    years to complete. We are in the process of transitioning from more
    than 2,000 mostly incompatible management information systems to a much
    smaller number of fully compatible systems that will provide leaders
    everything needed for informed decision-making. We will streamline
    processes and integrate systems to enable DOD decision-makers to get
    timely and accurate information to optimize the allocation of defense
    resources and people. The fiscal year 2005 budget requests about $122
    million to continue the evolution and extension of our Business
    Enterprise Architecture, which is guiding our overhaul. We anticipate
    that the architecture will lead to a functional accounting system by
    fiscal year 2007.
        Another initiative I want to highlight is military-to-civilian
    conversion. The Department has identified over 50,000 positions
    currently filled by military personnel for conversion to positions
    supported by DOD civilians or contractors. The Services have begun to
    convert 10,000 positions in fiscal year 2004. The fiscal year 2005
    budget includes $572 million to achieve the conversion of another
    10,070 positions. I should note that the Defense Finance and Accounting
    Service (DFAS), which is part of the Comptroller organization, has
    already converted several hundred positions previously filled by Air
    Force personnel. The airmen now are available to the Air Force, which
    can retrain them to fulfill its requirements. Similarly, the Army has
    been retraining the soldiers formerly assigned to DFAS. In particular,
    many of these personnel are being retrained at Fort Leavenworth to
    serve as military police, a specialty which currently is in especially
    great demand. At the same time, DFAS does not need to hire as many
    civilians to replace their uniformed predecessors. As a result, DFAS
    will be more efficient as well.

                                    CLOSING

        These, then, are a few highlights of President Bush's fiscal year
    2005 defense budget and related Department of Defense activities. I
    would be happy to address your questions on these or any other defense
    budget matters. Thank you.

        Senator Stevens. Thank you very much, doctor.
        Since there are only four of us here, would it be
    acceptable if we put a limit of 10 minutes on each one of us? I
    expect two more members. Is there any objection to a 10-minute
    limitation?
        [No response.]
        Senator Stevens. Dr. Zakheim, you have indicated a great
    many things concerning the current conflicts in Iraq and
    Afghanistan. As you have said, we will expect a supplemental
    some time after the beginning of the next calendar year, which
    means that the armed services will have to complete their work
    during this fiscal year, through the end of September, and
    beginning of October start using the funds that are in fiscal
    year 2005.
        I take it that it is your feeling that if there is a surge
    in expenditures in the first quarter of the next fiscal year
    you will use the food and forage concept and proceed with the
    idea that we will not be able to get a supplemental through to
    you probably until this time, some time around March 2005. Is
    that your plan?
        Dr. Zakheim. Obviously if there is a jump in expenditures
    we have to revisit what we would do. Right now it could go any
    of three ways. If things go wonderfully and more foreign troops
    are sent in, along the lines of the Japanese and the Koreans
    and so on--and with regard to those two countries in
    particular, I do not think anyone would have anticipated 8 or 9
    months ago that they would be in Iraq--then we could probably
    reduce our presence.
        If things go along the lines that we are talking about now,
    our presence will reduce marginally, by about 10,000 troops. If
    things go to hell in a handbasket--and there are those who
    predict that, though I do not think that is the case, certainly
    not what I have seen out there and certainly not in light of
    the constitution coming out the way it did, which clearly shows
    that the Iraqis themselves are determined to have a peaceful
    transition. Nevertheless, if things went bad, then there would
    be some kind of sharp increase and we would have to reevaluate.
        As things stand now, we can draw upon the experience of the
    last 2 years. As you know, we forward financed in excess of $30
    billion before we came for a supplemental last spring. That
    probably cut matters very close. The previous year we forward
    financed in the region of $13 billion. So if we were to come to
    you in January and request a supplemental then and the Congress
    turned it around, as it can do, within 1 month or so, I do not
    think we would face any difficulties.

                                     HMMWV

        Senator Stevens. I would like to shift over to the HMMWV's
    if we can. This has been a very, very serious issue for us on
    this committee. I have an equipment schedule here that shows
    that the HMMWV's, developed in the early 70's, began
    procurement in 1985. There are three models, I am told--no,
    four: A0 through A3; and that most of those that were deployed
    were the A0 and A1's.
        Now, some of them are less capable of supporting the
    armored packages. What are the ones that are being armored now?
    The up-armor, what models are being up-armored?
        Dr. Zakheim. I believe all of them are being up-armored. I
    have not heard that there is a difference between them. General
    Cartwright, do you have a different sense of that?
        General Cartwright. They can use any of the models to
    upgrade, but what essentially they do in the upgrade is they
    increase the engine and the transmission in order to take the
    additional weight. That is the key, so that when they go back
    and put the up-armor kit on it takes a larger engine and it
    also takes a transmission change. Which model they use does not
    matter.
        Senator Stevens. That was going to be my next question. Are
    you selecting any particular model for up-armoring or just what
    we can get a hold of? Are you bringing them back to up-armor
    them? Where are they being up-armored?
        General Cartwright. Some are new procurements, some are
    upgrade kits that are being done in the field, some are upgrade
    kits that are being done here in the United States. We are
    going to the quickest place that we can to create the
    capability out in the field. In some cases we have sent teams
    out to do it in the field to the extent that we can. But again,
    you are changing an engine and a transmission, which they can
    do in the field. Some of them we are building new at the
    factory.
        Senator Stevens. These are basically built in Indiana and
    Ohio?
        Dr. Zakheim. I believe that is correct.
        General Cartwright. I think that is right. Indiana is the
    key place that I recall.
        Senator Stevens. Are we procuring any new jeeps that are
    not up-armored?
        Dr. Zakheim. Not to my knowledge.
        General Cartwright. Not right now.
        Senator Stevens. We also heard that for the first time an
    Abrams tank was destroyed by artillery shells that were wired
    together and put into a road and set off, actually, by a cell
    phone. How prevalent is that now, General?
        General Cartwright. The enemy is certainly in using these
    explosive devices becoming more and more creative, and to the
    extent that they understand how to attack a particular target,
    whether it be a vehicle or a convoy, and how to inflict the
    damage, we have seen a steady progression in their
    sophistication of being able to do that.
        This often becomes an effort where our ability to armor or
    protect is then offset by a different capability on the part of
    the enemy, and we continually try to stay ahead of that game.
        Dr. Zakheim. Without getting into too much detail in an
    open forum, I think it is safe to say that basically there are
    two approaches to this, active measures and passive measures.
    We are pushing both and we have seen some success in both
    cases.
        Senator Stevens. What about this problem about
    predictability in terms of the costs of Iraq and Pakistan?
    Could you discuss that?
        Dr. Zakheim. Sure.
        Senator Stevens. My staff tells me that the situation is
    incredibly fluid and because of the difficulty to really
    predict what the costs will be over the next, what, 18 months,
    it is hard for us to conceive right now what the supplemental
    will look like. Is that correct?
        Dr. Zakheim. Yes, I think your staff is right on target
    there. Just to give you a concrete example, in November our
    monthly cost was something under $4 billion. In October I
    believe--I think it was October--the monthly cost was in the
    region of $7 billion.
        Senator Byrd. Monthly cost for what, please?
        Dr. Zakheim. For operating in Iraq. Excuse me, Senator.
        Senator Byrd. In Iraq?
        Dr. Zakheim. Yes, sir. Actually, I think it was September.
    There was a fluctuation. Now, we are still trying to understand
    the spike, but the basic point is that we do get spikes. Again,
    given that, and given the political uncertainties--and I think
    this is what your staff was getting at and they are absolutely
    right--given the political uncertainties, it is very, very
    difficult to predict, even with respect to Afghanistan, which
    has been fundamentally more stable, what exactly the costs will
    be. If we are talking about a supplemental, we are in March now
    and we are talking about moneys that would be expended
    initially about 8 months from now through about 20 months from
    now.
        That really is the key to our desire to wait a little
    longer and have a much better feel to the extent we can before
    we come in with a supplemental request.

                          TEMPORARY STRENGTH INCREASES

        Senator Stevens. Let me ask a related question. It is my
    understanding that the costs associated with the temporary
    strength increases are not in the fiscal year 2005 budget
    either. Now, these are people that have been taken on now and
    they have the additional cost of housing and various support
    costs. Why did the budget not include the amount for those that
    have already been brought on in temporary strength increases?
        Dr. Zakheim. Because those increases are under the
    emergency authorities and emergency authorities are funded by
    the supplemental. The fiscal year 2004 supplemental therefore
    funds those increases for fiscal year 2004. Again, when there
    is a fiscal year 2005 supplemental it will fund those
    increases. These are the emergency authorities over and above
    the authorized end strength.
        Senator Stevens. Well, there is an inconvenient gap there
    between October 1 and March 1 of next year. How are you going
    to fund them?
        Dr. Zakheim. Again, we will fund it the same way we would
    fund operations, that is to say forward financing. The issue is
    not really our ability to fund forward. The issue is how long
    we can continue to do it. Clearly, if it were to stretch on
    into the late part of the second quarter of the next fiscal
    year, we would have problems.
        Senator Stevens. What does ``temporary'' mean with regard
    to these employees?
        Dr. Zakheim. Essentially ``temporary'' simply means that
    you are going above the end strength, the authorized end
    strength, and it is part of the emergency authorities and so
    you do that until such time as you no longer have the
    emergency. That is my understanding of it. General, is yours
    different?
        General Cartwright. The same.
        Senator Stevens. Senator Inouye.
        Senator Inouye. I am glad you asked that question, Mr.
    Chairman, because there are many of us who would like to know
    what we have in mind when we say ``temporary.''
        Dr. Zakheim. Senator, as you know, the Secretary of Defense
    has said over and over again we do not want to stay in either
    Afghanistan or Iraq one day longer than is necessary. I think
    the general view is that we will be able to ramp down our
    forces over time. The question is what are the political
    circumstances that would permit such a ramp down. Those involve
    not just the internal situation in Iraq, but the degree to
    which Iraqi forces are able to pick up the burden--as you know,
    they actually are the largest force under arms in Iraq right
    now--and second, what the international contribution would be.
        There are a number of countries, as you know, that have sat
    on the fence for some time waiting to see developments, waiting
    to see a transfer of authority. So it is not at all
    inconceivable that once July comes around you will see far more
    contributions of forces than we have seen today.

                                     HAITI

        Senator Inouye. Dr. Zakheim, can I ask a few questions on
    Haiti? Yesterday the United Nations announced an international
    force will be going in, but apparently American forces would be
    the major unit. What is happening now?
        Dr. Zakheim. I do not know if the General has more insight
    than I do. But as far as I understand, we are sending some
    relatively small units out there. We are not going to be
    working on our own. And then there will be a handover to the
    United Nations (U.N.) peacekeeping force some months down the
    road.
        Clearly, one has to see. This is the day after President
    Aristide decided to catch the next plane to Africa, and how the
    situation persists at this stage, whether it quiets down,
    whether there is rioting or not, is something that at least I
    am not in a position to predict. But I do understand--and I
    would like General Cartwright to jump in here--that we are
    sending some small number of marines for at least 1 month or
    so, until the United Nations feels it is ready to send in the
    blue helmets.
        General Cartwright. I think that is exactly right. The
    unknowns in this situation are still pretty large. We are
    trying to understand what the situation is on the ground. We
    are trying to understand what it will take to be part of a
    national--or an international coalition if that is what is put
    together by the United Nations and what our role would be in
    it. These initial moves are just meant to establish our
    position there, first and foremost to protect our interests at
    the Embassy.

                         TRICARE FOR GUARD AND RESERVES

        Senator Inouye. Dr. Zakheim, last fiscal year we increased
    several personnel benefits. Among these was TRICARE for Guard
    and Reserves. But your fiscal year 2005 budget request provides
    for ending this at the end of the calendar year. What is your
    plan for the program?
        Dr. Zakheim. The law told us to carry it through to the end
    of the calendar year and we did, as you know, and we are asking
    $300 million for that. And yes, we have not funded beyond that.
        We are looking at how to deal with an issue that in our
    view is a little more complicated than simply providing TRICARE
    for Reserves. When the Reserves are on active duty they are
    already covered by TRICARE and for a brief time thereafter.
    Therefore the question is if someone is in the Reserves and not
    on active duty and has access to other health care as well,
    what do we do about that, since every dollar, quite honestly,
    that is spent in that direction could well come at the expense
    of other programs?
        You noted, Senator, somewhat earlier that the defense
    budget has increased significantly over the last few years.
    Well, $27 billion of that is purely health-related: $17 billion
    in the defense health program, $10 billion more in the accrual
    account for medical retirees. That is a lot of money, and these
    accounts grow of their own. We do not have any real control
    over them. They are nominally discretionary. In fact, they are
    entitlements.
        This one would likewise be, in practice, an entitlement. So
    we have to look very, very carefully before we extend these
    kinds of benefits beyond where they already are. The law told
    us this was to be in force until the end of the calendar year
    and so we funded it to the end of the calendar year.
        Senator Inouye. With all this, would you find that an
    active duty soldier fighting together with a Reserve soldier
    side by side, one getting full benefits, the other question
    mark, is not quite fair?
        Dr. Zakheim. It would not be fair if the Reserve were not
    entitled to TRICARE while the Reserve were fighting as an
    active. But in fact they are both entitled to the same benefits
    while they are both functioning in the same way. The real issue
    is as I see it--and maybe the General wants to expand--what do
    we talk about when we have someone who is on active service on
    the one hand and someone who is working at their regular job
    not in the military on the other?
        One could make the case that the unfairness, such as it is,
    would be against the active service person, who would find that
    they are still on the front lines somewhere, whereas the
    Reserve, who was going about their daily life with their family
    and their normal job in their normal town, is collecting the
    same benefit. Then one could say, is that particularly fair?
        General, do you want to add to that?
        General Cartwright. I think that hits the heart of the
    issue. We do not want to disadvantage the Reserve component
    when they are on active duty or in their transition to and from
    active duty. Clearly we want to take care of them, and I think
    that the measures that have been put forward do that. The
    question then becomes how long when they are not on active duty
    and to what extent this benefit extends, and I think we want to
    discuss that.

                                   EXIT PLAN

        Senator Inouye. The following two words are ones that we
    hear quite often in the political arena: ``exit plan.'' Now, we
    have planned for a temporary increase in troops. Does the
    administration have any exit plan for a time when we might be
    reducing these temporary forces?
        Dr. Zakheim. As I mentioned, Senator, the current plan
    envisions a reduction of about 10,000 this year alone. I am not
    in the policy chain, at least not this time around in my
    career, so it is probably a little bit out of bounds for me to
    discuss this, other than to say that naturally the
    circumstances will dictate our exit.
        The one thing that I think we can all agree on is we do not
    want a premature exit. Given the nature of the situation in
    Iraq or in Afghanistan, for that matter, a premature exit would
    create circumstances that probably could be so bad as to force
    us to come in, to come back in, within stronger numbers. That
    is what we all want to avoid.
        But it will be the circumstances on the ground that dictate
    just exactly when we go and at what pace.
        General, do you want to add?
        General Cartwright. Maybe I misunderstood the question. I
    thought you were focused more on when will the temporary end
    strength be drawn down versus when we will exit the conflict.
    Is that correct?
        In the thought process of the temporary end strength,
    clearly the forces, the services, are taking advantage of the
    opportunity to align themselves as quickly as they can to a
    configuration that allows them to both meet the threats that we
    have today and we envision having in the future and to get
    themselves to a position where they can sustain presence at the
    level that is necessary.
        The thought process right now with the Army, who has
    probably undertaken the greatest transformation of all the
    services, is that it will probably take them somewhere in the
    neighborhood of out through 2007 to accomplish this. They can
    meter the rate out. If the temporary authorities are reduced,
    they can stretch that out and stretch their transformation out.
    While they have the temporary authorities, they can accelerate
    that transformation, and that probably is to our benefit and
    theirs, to be able to get into a configuration that is more
    sustainable.
        So the thought process is that right now if they stay at
    the rate at which they are going that out in the 2007, 2008
    timeframe they will be reconfigured in a way that allows them
    to go back to that original strength level.
        Dr. Zakheim. Sorry I misunderstood, Senator, but the way
    the General outlined it is my understanding. We are talking
    about getting down in approximately 3 to 4 years.
        Senator Inouye. I have 30 seconds, sir. In my opening
    remarks I mentioned that we have increases in space and
    missiles, but decreases in the usual things like tanks, ships,
    and planes.

                                  SHIPBUILDING

        Dr. Zakheim. Senator, I do not think that is entirely the
    case. Yes, there are increases in space and yes, there are
    increases in missiles and missile defense. But let me give you
    one example of where the numbers might be a little misleading,
    and that is in shipbuilding. What we did this year was to
    finance the research and development portions of two ships, as
    opposed to fully finance those ships. That at least is what we
    are submitting to the Congress for approval, and we worked that
    out with the Office of Management and Budget (OMB).
        The impact of that is that had we fully financed those two,
    one being a DDX, the other the Littoral Combat Ship, the
    shipbuilding budget would be up about $2 billion. In practice,
    it has no differential impact on the work force on the ground
    and what goes on in the shipyards, but the numbers look a
    little bit different. As you well know, in shipbuilding in
    particular we only lay out about 4.5 to 5 percent of the total
    cost of a program in the first year.
        I think the same would apply to some of our other programs.
    It is true that we do not have a tank being funded, but we have
    not funded a tank in a number of years; and I would draw your
    attention to the Stryker program, which is moving along quite
    well.
        In terms of aircraft, we continue to fund the F-22, we are
    funding the F/A-18. Those have been our programs and they are
    moving on a steady pace. The research and development for the
    F-35, the Joint Strike Fighter, is moving ahead as well.
        Senator Inouye. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Stevens. Senator Byrd, you are recognized for 10
    minutes, sir.
        Senator Byrd. Thank you, Mr. Chairman.

                               FUNDING CONFLICTS

        Dr. Zakheim, why is the Department of Defense breaking with
    the modern tradition of how the United States has funded large-
    scale ongoing wars by absolutely refusing to include any costs
    of the war in its regular appropriations request?
        Dr. Zakheim. I do not know that it is a break with
    tradition. As I understand it, we funded 2 or 3 years of the
    Vietnam war in the baseline. I believe it was 1967 to 1970,
    fiscal years 1967 to 1970. It turned out that the estimates
    were way off and we went back to funding conflicts with
    supplementals.
        So we now have approximately 35 years of doing it this way.
    When this administration took office, we made clear that we did
    not want to use supplementals to fund shortfalls in operations
    and maintenance, for example, and we worked on changing the
    culture of the Pentagon so that we would not do that, so that
    people would not deliberately underfund budget requests and
    then come back to the Congress and say the sky was falling.
        What we did do was say to that in the event of a conflict--
    and of course, in early 2001 we did not know that 9/11 would
    come around--we said in the event of a conflict that would be
    different. That is what we have done. It is consistent with
    what has been done, as I say, Senator, I believe since 1970.
        Senator Byrd. At least until--since when?
        Dr. Zakheim. 1970, sir.
        Senator Byrd. Well, in 1970 the moneys for combat
    operations in Vietnam were included in the regular
    appropriation bill.
        Dr. Zakheim. That was the last time, I believe.
        Senator Byrd. No, not the last time. In 1971, the funds for
    combat operations in Vietnam were included in the regular bill,
    and that was not the last year. 1972, 1973. So that is not
    accurate, Dr. Zakheim, what you said.
        Dr. Zakheim. I may have made a mistake between 1967 and
    1970, as opposed to 1970 and 1973. But I believe that it was 3
    years only and then we did not fund combat operations after
    that.
        Senator Byrd. You funded 1967 the Vietnam war, regular
    bill, 1967. 1966, combat operations, at least partially, in the
    regular bill.
        Dr. Zakheim. Partially, yes.
        Senator Byrd. Well, now, wait a minute. You know, what
    years you said earlier does not square with the facts. So I
    just want you to know I have got a whole table of all of these
    dates and these wars and how they were funded. So that is the
    basis for my question: Why is the Department of Defense
    breaking the modern tradition of how the United States has
    funded large-scale ongoing wars by absolutely refusing to
    include any costs of war in its regular appropriations request?
        Now, we have seen that this administration does not fund
    operations in its regular bills in this war. There are two wars
    going on here: one in Afghanistan, under which we were
    attacked; and one in Iraq, in which we were the attackers. How
    can the American people ever be prepared to support running
    enormous deficits while spending scores of billions for a long-
    term occupation mission halfway around the world if the
    administration will not be open about its estimates for how
    much the war will cost, how long our troops will be sent
    abroad, or even what its exit strategy is for Iraq?
        How much are we spending per month in Afghanistan? How much
    are we spending per month in Iraq?
        Dr. Zakheim. We are spending on the average $4.2 billion a
    month in Iraq and on the average approximately $800 million a
    month in Afghanistan. The total cost of Enduring Freedom which
    exceeds just operations in Afghanistan is in excess of about--
    it is about $1 billion a month, or at least that is what we saw
    last year. It was about $12 billion for 12 months.
        On the dates, I apologize, but you have got the numbers in
    front of you, I do not. You have a better sense of history than
    I do, Senator.
        Senator Byrd. Well, thank you, Dr. Zakheim. You better
    answer these questions when you come before the people's
    representatives in the Department that controls the purse
    strings. We are going to be watching these figures closely.
        You and I have had good relations and we have worked
    together on things before. These questions may sound like there
    is a great deal of animus between you and me. There is none.
    That is not my purpose here. I thank you for the good work you
    do.
        But it is increasingly clear that the Bush administration
    has no idea of when to start to bring American soldiers home
    from Iraq. It is increasingly clear that the Bush
    administration intends to keep soldiers in Iraq for many, many
    months. But does the administration include costs for this
    mission in its budget? The answer is no, right?
        Dr. Zakheim. That is correct, sir.

                          COSTS OF OCCUPATION OF IRAQ

        Senator Byrd. Does the administration give the American
    people an understanding of the costs of this prolonged
    occupation of Iraq? The answer is no, right?
        Dr. Zakheim. That one I am not sure I can fully agree with
    you on, Senator.
        Senator Byrd. Well, let us have it, then.
        Dr. Zakheim. Well, as I said, certainly the American people
    know that the costs have been large. If we are talking about
    $4.2 billion a month, they can do their sums up to now and see
    that we have been talking about significant amounts of money.
    The difficulty for us, Senator, is that predicting the future,
    as I indicated, is much more dicey. We can certainly come up
    with the numbers that we have spent and no one is under any
    illusions that these are not large expenditures. But the
    prediction of the future is a completely different matter, and
    that is why we have been very reluctant to make any statements.

                             ESTIMATED COSTS OF WAR

        Secretary Rumsfeld has noted in a number of hearings that
    we had originally requested in the case of Afghanistan a $10
    billion estimate and the Congress decided not to go with that.
    I know there is a lot of discussion about why the Congress did
    not and so on. It turned out that estimate was reasonably
    accurate for the first year.
        Senator Byrd. Well, Dr. Zakheim, why does not the
    administration send up in its budget the estimated cost of the
    war in Afghanistan, the estimated cost of the war in Iraq, in
    its regular budget? That is the question.
        Dr. Zakheim. The answer is because we simply cannot predict
    them at this stage, sir.
        Senator Byrd. The White House plays hide and seek with the
    costs of the war, hiding them from the American public until
    after the November election. The country deserves an honest up-
    front approach from the President. Instead, we get gimmicks and
    games.
        I offered an amendment to the fiscal year 2004 defense
    appropriations bill that stated the sense of the Senate that
    the President should include in his fiscal year 2005 budget a
    request for ongoing military operations, including Iraq and
    Afghanistan. This amendment was passed with an overwhelming 81
    votes. But the costs of the war on terrorism and the war in
    Iraq are not included in this budget, the estimated costs. Of
    course, you cannot be absolutely sure down to the final dollar,
    but certainly this administration must have some estimates.
        Surely, the administration must talk about these things
    within the administration. I certainly would be totally
    surprised and shocked, astonished, if the truth were that the
    administration does not have any estimates of the costs of the
    wars, the two wars that are going on, the one in which we were
    attacked, the other in which we were the attacker. There must
    be some estimates.
        The American people are entitled to know what these
    estimates are, and that is what we are asking.
        On February 10, the military services told the Armed
    Services Committee that delaying a supplemental until next year
    would cause them real budgetary problems when they run out of
    money in early to mid-September. So, I remind you that the
    administration sent its request for $87 billion to Congress on
    September 17, 2003, and it was passed by Congress and signed
    into law by the President within 1\1/2\ months. If the
    Department can estimate the fiscal year 2004 costs of the war
    by September 2003, why can it not estimate the fiscal year 2005
    costs of the war by September 2004?
        Dr. Zakheim. Senator, again, yes, we have estimated the
    costs of 2004, but that is an estimate, it is true, and that is
    what we think we will spend through September 30 of this year.
    But we are reaching two watershed situations, both in Iraq and
    Afghanistan. That is to say, the transfer of authority in Iraq
    and the presidential election in Afghanistan. Both of those
    could be, will be, significant factors in what is the American
    military presence, posture, force level in fiscal year 2005.
        Senator Byrd. Dr. Zakheim, we are also approaching an
    election in this country, in November. The American people are
    entitled to know before the election, not after the election,
    what at least the estimated costs of these continuing wars are
    to the American people in dollars as well as in lives, as well
    as with regard to the length of the occupation.
        Mr. Chairman, I hope I have not overrun my time.
        Senator Stevens. Slightly, Senator.
        Senator Byrd. All right, I will wait until the next round.
    Thank you.
        Thank you, Dr. Zakheim.
        Dr. Zakheim. Thank you, Senator.
        Senator Stevens. Senator Burns. Ten minutes, Senator.

                   PREPARED STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. Thank you, Mr. Chairman. I have a statement
    I would like to submit for the record, with the consent of the
    committee.
        Senator Stevens. It will be printed in the record.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Thank you, Mr. Chairman. Mr. Zakheim, I would like to thank you for
    being here today to discuss the President's fiscal year 2005 Budget
    request for the Department of Defense (DOD). I have just a very short
    statement before we get going this morning.
        The President has proposed a $401.7 billion fiscal year 2005 budget
    for the Department of Defense. This number represents a seven percent
    increase over the fiscal year 2004 budget of $375.3 billion.
        I would like to start off by saying that for the most part, I think
    you have presented us with a good budget, one that funds core needs to
    allow troops currently engaged, to do so safely and to the best of
    their ability. This budget also prepares our military forces for future
    engagements, where battlefields will look much different than they have
    in years past. We must ensure our military transforms in such a way as
    to have the right military capabilities for any future engagement. An
    overall Research and Development (R&D) request of $68.9 billion and
    investment in Science and Technology, which has been included in this
    fiscal year 2005 budget at $10.5 billion, helps get us there.
        As you know, the men and women of our active, Guard and Reserve
    components have seen an increased operations tempo (OPTEMPO) over the
    past few years in particular. In my State of Montana, we'll soon see 40
    percent of the Guard's total force mobilized, including the 495th
    Transportation Battalion out of Kalispell, the 143rd Military Police
    Detachment out of Bozeman and the 1022nd Medical Company. While I know
    these men and women love what they do and love serving their country,
    this increased OPTEMPO does not, however, come without costs. I am
    pleased to see that the budget addresses this issue and looks at ways
    to rebalance our forces and reduce the need for involuntary reserve
    mobilization. I do think it is important to look at ways to add folks
    to areas where we currently have a shortage, such as military police,
    transportation and civilian affairs.
        Increased operations also wear and tear on much of our already
    aging equipment. This year's budget proposes $140.6 billion for the
    Operation and Maintenance (O&M) account, up from $127.6 billion in
    fiscal year 2004. The procurement account has been proposed at $74.9
    billion, down from the fiscal year 2004 level of $75.3 billion.
        The United States military would not be the best fighting force in
    the world without the great people who wear the uniform. It is
    important that we take care of our military men and women and ensure
    their quality of life is good. The Military Personnel account is funded
    at $104.8 billion in fiscal year 2005, while the Military Construction
    and Family Housing accounts request is a total of only $9.5 billion.
        Our military has performed nobly in their latest missions--
    especially in Afghanistan and continuing in Iraq. This country's
    fighting force is extremely skilled and capable. The United States
    military responds to various missions across this nation and across the
    world at a moment's notice, as we have recently witnessed in Haiti. We
    must ensure our brave military men and women have the tools and
    equipment needed to do their job and return home to their loved ones
    safely and as quickly as possible.
        I pledge to do what I can to make sure that our military has the
    support they need to get the job done.
        Again, thanks for coming before our subcommittee today. I look
    forward to the discussion this morning. Thank you.

        Senator Burns. We are all spending a lot of time at home
    now, so thank you for coming this morning. I have a couple of
    things I would like to ask.
        With regard to the Senator from West Virginia's questions,
    you know, I realize we are finally into a political season. I
    had this all confused. I did not know that. But I want to point
    out the Clinton administration never did provide advance
    estimate costs for Haiti, Southwest Asia, or Kosovo. I would
    just like to clear that for the record.
        Senator Byrd. That is an old herring, going back to the
    Clinton administration. What has that got to do with today?
        Senator Burns. Well, you know there is a lot of truth in
    that.
        Senator Byrd. Well, there may be and there may not be. But
    we have got to do the funding. That is our business, and we
    need estimates upon which to proceed.
        Senator Burns. That is exactly right. If it was an accepted
    practice then, those practices will usually be carried forward
    in Government, and you know how that is.

                              RETENTION OF TROOPS

        I want to use an old Marine term here. As I talk to the
    families of Guard and Reservists in the State, scuttlebutt has
    it that our retention of those troops once they come home--they
    have been deployed no less than 6 months, in some cases over 1
    year--retention is going to be a problem. We have not heard
    that because there are no figures for it yet.
        Has this been discussed at the highest levels of the
    Pentagon? Because, as you know, over 50 percent of our force
    structure has been moved into Guard and Reserves. Has this been
    discussed and is it a concern of the Pentagon?
        Dr. Zakheim. Well, the answer is yes and yes, sir. My
    colleague David Chu, the Under Secretary for Personnel, is
    fully on top of this issue. As I understand it, right now we
    are retaining Reserves at a historically high rate, about 5 to
    6 percent higher than is normally the case.
        There are some indicators that that retention rate will go
    down some, and it might just level off at the historical rate.
    Right now, like you, all we have are anecdotal pieces of
    evidence. It really depends almost on which Reserve you speak
    to. I have spoken to some who have voiced the concerns you just
    did. I have spoken to others who say that the families are
    supportive, the townspeople are supportive, they are all very
    proud that they are out there, and they have absolutely every
    intention of re-upping.
        So until we actually see the numbers we do not know. But
    yes, this is something that we are very cognizant of. I guess
    we are fortunate that going into this potential situation we
    actually have higher retention rates than is historically the
    norm.
        General, do you want to add to that?
        General Cartwright. I think the retention rates are
    something that is a quick look; you can kind of get a sense of
    how many people are coming in. The longer term, which does not
    come right away, certainly revolves around the satisfaction
    that the individual soldier, sailor, airman, marine feels for
    the duty that he is performing.
        Even longer term and more problematic and one that we are
    keeping a very close eye on is the satisfaction of the family.
    This is a hard stress on a family and over time the question is
    have we focused and provided the right incentives to keep the
    families engaged and do they feel like the contribution is
    meaningful.
        Dr. Chu has certainly undertaken a broad program that goes
    out and looks at the benefits that we associate both with the
    individual service member and the benefits associated with the
    family, making sure that we describe service when a Reservist
    comes on duty that equates to the service that we actually
    demand of them. This gets at the idea of if there is a certain
    amount of readiness that we associate with a particular
    soldier, let us say, in the Reserve or the Guard, i.e., that we
    expect him to be up and available for 1 year out of every 5 or
    6 years, or whether we expect him to come on service at a short
    notice, that that is understood right up front and that that is
    what they sign up for.
        So we are looking at a broad range of things that get at
    the issue of the continuum of service, not just at the
    recruiting piece, because you have got to look broader than
    just the recruiting piece.

                                FORCE STRUCTURE

        Senator Burns. Well, Senator Inouye brought up a very valid
    point, and correctly so, on benefits and this type thing. A lot
    of us, every Senator sitting here at this table, when the trend
    started of bringing down our force structure of people on
    active duty, our regular forces, and when those numbers were
    dropped and then more emphasis was put on our Reserve and Guard
    forces, we all went to work and started to redevelop, to take a
    look at the infrastructure under which those Guard and Reserves
    are trained, that they have to have facilities and a training
    procedure that makes them as good as those who train every day.
        I think most of us who did that under the leadership of
    this committee and the Armed Services Committee, understood
    that. I just wonder, because we have integrated forces. The Red
    Horse Brigade out of Mount Storm Air Force Base is integrated
    Reserve and active duty forces. In fact, their first commander
    was a Reservist. That will work pretty well as long as we
    integrate those troops along with communication and training
    that is at least equal to our citizen soldiers, sailors, and
    marines.
        I think we have to discuss that, because it becomes a vital
    part of our force structure.

                                 CACHES OF ARMS

        I was in Iraq last October and we were in the northern
    part, Mosul, where they were finding tremendously large caches
    of conventional arms that Saddam had stored and stashed away. I
    cannot help but think, as we see these bombs, these roadside
    bombs, that within those caches that we have found and those
    that we have not found is a supply of explosives that is much
    deadlier when used in a very creative way.
        Are we continuing to search for those caches and to destroy
    the ones that we have found?
        Dr. Zakheim. Please, let me start and I will then turn it
    over to the General.
        The answer is yes. We are also using Iraqis to do a lot of
    that. There are really two parts to this. One is to search for
    them; the other then is to guard them. Iraqis are providing a
    lot of the guard units for that. We do continue to search, and
    the more intelligence we get--and we are getting more
    intelligence, and the best sources are the Iraqis themselves--
    the more we are able to quickly find these ammunition storage
    facilities and to guard them and dispose of them.
        General?
        General Cartwright. Clearly, a very aggressive effort, both
    in Afghanistan and Iraq, to go after these caches, find them,
    dry up that source as quickly as we can. The good news is that
    both in Afghanistan and in Iraq, as the forces, the local
    indigenous forces, stand up, as we use the tools available to
    us to create a conduit of information back and forth between
    locals, that has become our richest source of finding these
    caches.
        So in the case of Iraq, it is the Iraqis who are actually
    helping us go find those, get them, get them into a safe place,
    get them destroyed or disposed of otherwise. But the key here
    is programs like--and we talked about it earlier--the CERP
    fund, where we establish a relationship in the community and
    then the information starts to flow, are so critical to the
    soldiers as they try to do this.
        Senator Burns. Mr. Chairman, it says ``stop'' here. You
    never say ``whoa'' in a horse race. Oh, we are doing okay yet?
        Senator Stevens. You still are.
        Senator Burns. Well, this thing makes funny noises and has
    funny colors to it.
        Along that same line, there are some technologies supplied
    by or are being developed in some of our colleges and
    universities, also in small businesses, and especially in my
    State, that would help us to find both weapons and personnel
    underground. Have we seen any acceleration of taking a look at
    these technologies and obtaining those technologies and then
    deploying them?
        Dr. Zakheim. The answer is yes. DARPA, our Defense Advanced
    Research Projects Agency, in fact has--and I cannot get into
    detail in an open forum, but they in fact have been
    accelerating a number of these technologies, precisely for the
    reasons you gave, in order to get them on the ground quickly.
    We have got some on the ground quickly, and we are certainly
    prepared to brief you in private as to what we have done.
        Generally speaking, I think DARPA is open to ideas and
    suggestions. Anything that will particularly help the forces is
    welcome.
        Senator Burns. Well, we established a program called the
    Experimental Program to Stimulate Competitive Research (EPSCoR)
    many years ago when I first came to this body and that allowed
    consortias of smaller colleges and universities to do research
    and development (R&D) on many projects. Montana State
    University, I think you probably know, have made significant
    improvements to laser technology and have developed a lot of
    the technology that you are working with now.
        But I hear that it is hard to get into the good old boy
    network every now and again, and we have got to watch that
    because there are some creative people outside the norm,
    because EPSCoR has allowed these people to do a lot of R&D work
    in areas where it traditionally had not been found. I would
    like to see a little more notice taken of some of the advances
    that have been made.
        Mr. Chairman, thank you very much.
        Dr. Zakheim. Senator, if you contact me about this I will
    forward whatever information you have to Ron Sega, who heads up
    that area in our Department. I do know that there is no old boy
    network functioning with regard to force protection. They are
    trying to get at whatever is out there.
        Senator Burns. That is good, but it is still alive up here.
        Thank you very much.
        Dr. Zakheim. Mr. Chairman, just to correct for the record a
    couple of things. First, Senator Byrd got it absolutely right.
    I had flipped my history. I told you, Senator, you have a
    better sense of history than I do. We used supplementals for
    Vietnam in the first several years, 1965, 1966, and then we
    went over to baseline budgets in the years you mentioned. Of
    course, by that time we had a better sense of where we were
    headed with that, I believe. But in any event, I had gotten the
    years completely reversed.
        I also had a question earlier about buying HMMWV's that
    were not up-armored and I am told by the Army that in fact we
    are buying some number that are not in 2005. We are buying a
    total of 2,431 HMMWV's; 818 of those are up-armored, the rest
    are not. So I wanted to be clear for the record on that, sir.
        Senator Stevens. Thank you very much.
        I assume you are marking those so they are not going to be
    sent over to a war zone accidentally?
        Dr. Zakheim. The intention is that everything that goes
    over there is up-armored.
        Senator Stevens. That is not what I asked. The ones we are
    procuring new that are not up-armored, are they clearly marked
    so they cannot be sent into war zones?
        Dr. Zakheim. That is my understanding, but I will look into
    it for the record.
        [The information follows:]

        Both standard and Up-Armored High Mobility Multipurpose
    Wheeled Vehicles (HMMWV) are being procured in fiscal year
    2005. HMMWVs which are not Up-Armored are visually
    identifiable. New, non-up-armored HMMWVs coming out of
    production are programmed to fill unit shortages according to
    Army priorities. Both standard and Up-Armored HMMWVs will
    continue to be available in the theater of operation for use as
    appropriate by the Combatant Commander. Production of Up-
    Armored HMMWVs is a Department priority and production is being
    increased to meet CENTCOM requirements.

        Senator Stevens. Thank you.
        I understand the Senator from West Virginia's point. I
    distinctly remember raising the question several times during
    Bosnia, Kosovo, all of those, even with the first President
    Bush in Somalia. We did not get budget estimates. We ran those
    wars on supplementals. That is not something this committee
    really believes in, but it has become a practice, whether we
    like it or not. But the Senator made about the same speech I
    did, as a matter of fact, in 1999 as we approached an election.
        But let me shift to something else. I am worried about this
    budget because I have before me your chart--I wish you had
    brought it in a big chart so everyone could see it. 1969, 8.9
    percent of our gross national product was dedicated to defense.
    And if you look at 1969, that was 43.4 percent of the national
    budget. Now we are looking at a budget that is 3.6 percent of
    the gross national product. In the year 2000 the budget request
    was 2.9 percent. We are looking at, instead of 43 percent of
    the Federal budget, we are looking at 17.9 percent of the
    Federal budget being committed to defense.
        As I look at our projections, there will be an increase
    over the next 5 years, not near enough to move us back up to
    the point where we traveled for the 10 years of the 1980's,
    somewhere in the vicinity of 20 percent of the Federal budget
    and in the vicinity of 6 percent of the gross domestic product.

                                    OUTLAYS

        Now, I want to ask this. These outlays, do they include the
    costs of the war?
        Dr. Zakheim. The outlays in the charts for 2004 do, yes,
    sir. Obviously, not for 2005. But they do include the costs of
    the war. Anything that is an actual outlay is included, sir.
        Senator Stevens. I am worried about the trend in terms of
    being able to maintain the kind of a military we need if we are
    going to not restore the concept of committing a sufficient
    amount to our defense. I remember traveling the world with
    Senator Jackson where we urged our allies to commit at least 3
    percent, and we in those days were between 6 and 8 percent of
    the gross national product.
        What are our allies doing now? How much are they committing
    to defense, do you know?
        Dr. Zakheim. Off the top of my head, sir, I believe that
    many of the allies that we tried to get to reach 3 percent in
    those days are still not at 3 percent today. In our case, of
    course, our gross national product is in the trillions and so
    3.6 percent of such a large amount of money is still very, very
    significant.
        But nevertheless, I think it is fair to say that in most
    cases our allies are not at the 3 percent of their gross
    domestic products, and I can get you the answer for the record.
        [The information follows:]

        Please see the attached information on allied defense
    spending from the 2003 Responsibility Sharing Report.

                                     BUDGET

        Senator Stevens. Well, I asked that other question that you
    have just implied of the staff. We have not gotten the answer
    back yet. But I think that the amount of your budget now, which
    is roughly, what, 400----
        Dr. Zakheim. 401 and change, yes.
        Senator Stevens [continuing]. As compared to the $200
    billion in 1981, the first budget that Senator Inouye and I
    handled in defense, I think it is less than it was in terms of
    real dollars, than it was in 1981.
        Dr. Zakheim. I do not believe it is less than in 1981.
    Certainly it is less than the 1985 real dollar number, which
    was the peak of President Reagan's years, and I was part of
    that administration. But you are absolutely right, you cannot
    just take the $400 billion and compare it to the $200 billion
    because there is an inflation factor and there are also much
    increased benefits that did not exist in 1981.
        Senator Stevens. Well, I am told in constant dollars what
    you have is an increase from $257 billion to $393 billion
    between 1981 and 2005.
        Dr. Zakheim. I thought it was a little higher, sir, yes.
        Senator Stevens. That to me is not an increase that
    recognizes our global responsibilities now as compared to then.
    I wonder how you can maintain a global war against terrorism
    without some additional modernization.

                           ARMY AVIATION PROCUREMENT

        Let me switch over to that if I may. We have not seen some
    of the details on the Comanche termination and what is going to
    happen there. Is our understanding correct that the money from
    the Comanche termination, the net will be shifted over to the
    Army aviation procurement accounts?
        Dr. Zakheim. That is correct. Basically there is really a
    change in the whole approach to Army aviation. What is
    happening to Comanche is only a part of it. I can give you some
    detail. We are going to modernize 1,400 aircraft and, because
    of the funds available from Comanche, an additional 284 Apache
    Block 3's and 19 Chinooks. We are going to acquire almost 800
    new aircraft, both for the active and for the Reserve, and that
    is more Chinooks, more Blackhawks, and a light utility
    helicopter.
        Senator Stevens. When will we see those modifications in
    the budget?
        Dr. Zakheim. We are going to be sending up an amendment
    very quickly, sir, and that will address both sides of the
    equation. That is to say, moving the money out of Comanche and
    moving the money into many of the programs that I have
    mentioned.
        Senator Stevens. Will that change in any way the requests
    that are before us for the Army for 2005?
        Dr. Zakheim. I would have to check on that. I think that
    basically it is pretty much in balance, but I would have to get
    you that for the record. I do not think it will be significant,
    no, sir.
        [The information follows:]

        The Army 2005 budget request does not change in total but
    there has been realignment of resources between accounts. Army
    Research and Development is reduced by nearly $1.2 billion. A
    majority of the resources, $828 million, will be reapplied to
    support Aircraft Procurement, acquiring high priority
    helicopter equipment and additional CH-47, UH-60 and TH-67
    aircraft. Another $155 million is reapplied to Procurement of
    Ammunition, principally to support acquisition of additional
    Hydra rockets, and Missile Procurement has been increased by
    $93 million for the purchase of additional Hellfire missiles.
    Smaller adjustments have been made in several other accounts
    and the precise details of all adjustments are included in the
    fiscal year 2005 Amended Budget Submission that the Department
    has forwarded.

        Senator Stevens. It is basically a shift from R&D to
    procurement?
        Dr. Zakheim. Yes, sir.
        Senator Stevens. We have, I understand, a 2004 shortfall on
    the global war against terrorism of $700 million, is that
    right?
        Dr. Zakheim. I would have to look at that, the basis for
    that number. I do not recognize that figure, sir.
        Senator Stevens. Well, we are talking about the defense
    health program. Is there a shortfall there?
        Dr. Zakheim. In the defense health program? I would have to
    look at that.
        Senator Stevens. Attributable to the global war on
    terrorism?
        Dr. Zakheim. I am told that in fact there is that shortfall
    and we are going to reprogram money to cover it. So we will be
    sending you a reprogramming action for that.

                                      IFF

        Senator Stevens. All right. Why are they not, those
    shortfalls, not being funded from the Iraqi Freedom Fund (IFF)?
        Dr. Zakheim. I have to look at where the sources will come
    from. We will clearly fund the shortfall from the most
    acceptable source, and of course we have to send those sources
    up to you.
        Senator Stevens. Well, can you answer me this. Is the Iraqi
    Freedom Fund, which we created for the fiscal year 2003
    budget--it was the supplemental really--has that been
    exhausted?
        Dr. Zakheim. Not entirely exhausted. We are still
    reprogramming money out of the IFF. We are coming close to
    exhausting it, yes.
        Senator Byrd. Mr. Chairman, how much money does remain in
    that fund?
        Senator Stevens. Well, I was just going to get to that. I
    do not like to see any of these funds left, have us get
    supplementals when there is money in technical funds we created
    in the past that is not being charged. Are you doing that, Mr.
    Zakheim?
        Dr. Zakheim. No, I do not think that is the case at all. We
    anticipate using it all up. Actually we are almost there. I am
    trying to get the numbers for you and I hope before this
    hearing is over I will be able to tell you exactly where we are
    with what remains of the IFF. But I do not think it is a
    situation of asking for more money over and above what we have
    because we have more money in the kitty. That is not the case
    at all.
        Senator Stevens. Well, you are the Comptroller. Do we have
    existing funds over there? These are 2003 funds now we are
    talking about.
        Dr. Zakheim. That is correct.
        Senator Stevens. I do not understand why those funds were
    not used.
        Dr. Zakheim. Out of the $1.9 billion IFF, the Iraqi Freedom
    Fund, we have already committed over $1.5 billion. So we are
    down to about $400 million in the Iraqi Freedom Fund. For
    example, that in and of itself would not cover the DHP, the
    defense health program. But in any event, the health program is
    not directly war related, so we would have to fund it out of
    something else. The IFF is for what is directly war related.
        As I said, we are down to $400 million, or less than 25
    percent, of the original IFF and that will be expended pretty
    soon.
        Senator Stevens. I would hope there would be a policy of
    charging some of those funds like that, these reprogrammings,
    so that we do not create additional demands.
        Dr. Zakheim. It is in fact the policy to do that, but we
    can only reprogram for things that are directly war related. So
    in the case of the DHP we could not do that.
        Senator Stevens. I am not going to comment on that. We have
    seen it done before, let us put it that way.
        Gentlemen, I am going to have to leave here in a minute. We
    have got a 10-minute rule here, so I presume each member would
    want another 10 minutes. I will leave the gavel with the co-
    chairman and thank you very much, Mr. Zakheim.
        Dr. Zakheim. Before you go, sir, I was passed a note
    without the right numbers. IFF is completely committed for
    2003, which is what you were asking me about. The $400 million
    that is left is in the IFF of 2004. So here we are in the
    second quarter of 2004, we have committed $1.5 billion out of
    $1.9 billion, and the 2003 is completely committed.
        Senator Stevens. Senator Inouye.
        Senator Inouye [presiding]. Thank you.
        I am glad that the chairman brought up the matter of
    shortfalls in military medicine and health care because in all
    the studies that we have looked at men and women in uniform are
    more concerned about health care than pay.
        That being the case, I have been also monitoring some of
    the assignments we have made of military personnel in medicine.
    I note, for example, that from Walter Reed we have been sending
    doctors to Iraq who are specialists. One just sent there is a
    specialist in knee replacements, which is a highly specialized
    area.
        Senator Stevens. Senator, would you yield to me just 1
    minute? I apologize.
        Senator Inouye. Certainly.
        Senator Stevens. When the subcommittee closes out today,
    our next hearing will be at 10 a.m. in this room for a hearing
    on the Army's fiscal year 2005 budget request.
        Thank you, Senator.
        Senator Inouye. Thank you.
        As I was saying this doctor is being sent to Iraq for 6
    months. He wants to go there to do his part, but in 6 months he
    is not going to do one knee replacement, he is not going to do
    any one of those highly skilled specialties, and when he gets
    back he will have to go back to school again.
        Why do you not have a policy that would, say, limit these
    people to 3 months?
        Dr. Zakheim. I would have to refer that to Dr. Winkenwerder
    and Dr. Chu.
        Senator Inouye. I am not a doctor, but it just does not
    make sense. You send someone out there and you are going to
    lose all his skills.
        Dr. Zakheim. On its face the question is an excellent one.
    I am sure there is an answer and a response. I do not know if
    General Cartwright is into that, but I claim no particular
    expertise. I would have to get you an answer for the record
    based on what Dr. Chu and Dr. Winkenwerder were to tell me.
        General Cartwright. We need to go back and look at the case
    for you, Senator.
        Senator Inouye. I would appreciate that, sir.
        [The information follows:]

        Surgeons are chosen for deployment based on the skill
    qualifications requested by the combatant commander.
        Once a requirement for a certain specialty is validated (in
    this case, orthopedics), the skill set requirement is matched
    to the skill level of the surgeons available to meet the
    requirement. Each Service has a system for coordinating these
    requests, utilizing its specialty consultants, medical manpower
    experts, and others familiar with the necessary skill
    qualifications. While orthopedists may have a subspecialty (in
    this case joint replacement) they are trained in (and typically
    treat) the full range of cases that may present. Indeed, well-
    trained orthopedists are critical to caring for the wounds
    occurring in Iraq.
        Moreover, this rotation will help maintain excellence in
    the Military Health System's graduate medical education
    programs. Even the most highly trained subspecialists need
    operational/deployment military medicine expertise in order to
    be fully competent and credible role models and teachers for
    military physicians in training.
        This six-month period for the rotation balances the needs
    for the combatant commander with prudent use of highly trained
    medical staff.

        Senator Inouye. Senator Byrd.

                               ROTATION OF FORCES

        Senator Byrd. Thank you, Mr. Chairman, my esteemed friend.
        References have been made to a rotation of forces. The
    administration is in the midst of a massive rotation of forces
    in Iraq. Is the cost of rotating these forces reflected in the
    average monthly cost of $4.2 billion for operations in Iraq?
        Dr. Zakheim. To the extent--remember, Senator, that the
    monthly costs we have up to now only reflect what we have up to
    November. But the answer is yes, sir, those rotation costs will
    be reflected in the monthly costs. So that here we are in
    March; I do not expect to see any actuals until probably the
    June timeframe.
        Senator Byrd. Recent news reports indicate that the
    Pentagon and the Central Intelligence Agency (CIA) are stepping
    up the intensity of the hunt for Osama bin Laden. Is that
    increased effort requiring any corresponding increase in the
    average monthly cost of operations in Afghanistan or in the
    number of military personnel in Afghanistan?
        Dr. Zakheim. At this stage I simply do not know. Should
    there be an increase, it will be reflected. But again, that is
    not something I will be able to address in any detail for the
    next couple of months.
        Senator Byrd. Do you have any idea, any indications as to
    whether or not the effort is requiring any corresponding
    increase in the average monthly cost of operations in
    Afghanistan?
        Dr. Zakheim. General, do you want to?
        General Cartwright. The only thing I would say, Senator--
    and it would be reflected--is that as the weather gets better
    the opportunity to do more will be there and we will try to
    take advantage of that. To the extent that that is a delta
    between what we are doing in the winter versus what we are
    doing in the spring and the summer would be the difference.
        Senator Byrd. General, does the Department anticipate any
    substantial drawdown of U.S. forces from Afghanistan at any
    point in the near future, keeping in mind the increase, the
    stepping up of the intensity of the hunt for bin Laden?
        General Cartwright. The program for 2004 is laid out and is
    relatively stable and includes the efforts that we have to
    chase after various targets. The longer range look, as I said
    earlier, our intent is to move out of there as quickly as the
    country is ready to take over. So that remains a little bit
    cloudy and ambiguous right now.
        Senator Byrd. Is there anything you can tell us about this
    hunt for Osama bin Laden? We have been reading a good bit about
    it. There are some reports that he has already been caught--I
    heard that report 2 or 3 days ago--and that the administration
    is waiting, waiting until a more opportune time to make the
    announcement. I did not give a great deal of credence to that,
    but I am not surprised at anything these days.
        Dr. Zakheim. Senator, you are right not to give much
    credence to that, particularly, as you know, the Middle East is
    a place where rumors start circulating and grow with the
    passage of days and hours.
        Senator Byrd. Just in the Middle East?
        Dr. Zakheim. That is the area we were addressing just now,
    sir.
        Senator Byrd. But you are making a rather broad statement
    when you say that in the Middle East rumors----
        Dr. Zakheim. There have been a lot of studies to that
    effect, about the impact of rumors on perceptions in the Middle
    East. That is why I referred to that one, sir.
        Senator Byrd. All right. Let me get back to my earlier
    subject of contention perhaps. The Department of Defense has
    adopted an all or nothing approach, sending Congress an
    ultimatum: Either give the Pentagon a blank check for $10
    billion, as was requested 2 years ago, or the administration
    will wait until untold billions have already been spent before
    asking for a supplemental appropriations bill. And we have done
    both. We have advanced that slush fund, as you might call it,
    of $10 billion, a blank check, and then at the same time we are
    still depending upon supplemental appropriations bills.
        This is an unnecessarily confrontational and shortsighted
    posture. So I have to continue to express my disappointment in
    this method of approach. Now, you can go back to preceding
    administrations, if you can find it to be a fact in each case,
    and talk about the war in Vietnam, the war on Bosnia, the war
    in Korea, or whatever. We are here to appropriate moneys today
    and we need to know, we are entitled to know, what the facts
    are.
        The American people, and we are here to represent them, are
    entitled to know what the costs of this war are and what the
    estimate of the future costs are going to be. There is an
    election coming up and there is a pretty well-founded
    suspicion, it appears, that these figures are going to be
    withheld from the people's elected representatives in Congress
    before the election, but that after the election, then the
    costs will be sprung upon us.
        I think it is a poor way to legislate. I am in my 46th year
    here on this committee and my 51st year on the Hill, in
    Congress. And we have not seen it done like that before, and
    this administration continues, it seems, to proceed in this
    manner.

                          IRAQ RECONSTRUCTION FUNDING

        Now, let us talk about the supplemental Iraq reconstruction
    funding. The OMB Director, Josh Bolten, stated that he
    estimates that the administration's supplemental appropriation
    request, whenever it may be submitted, could be in the
    neighborhood of $50 billion. Dr. Zakheim, does that estimate
    include any additional funds for reconstruction projects in
    Iraq?
        Dr. Zakheim. To my knowledge it does not.
        Senator Byrd. Can you give a ballpark estimate of what
    additional reconstruction funds the administration might
    request for Iraq on top of the $18.4 billion that was
    appropriated last fall?
        Dr. Zakheim. I cannot, and permit me to explain why I
    cannot. The $18.4 billion was not really a 1-year request. It
    was a request for essentially front-loading what would be an
    international effort to reconstruct Iraq. I was personally
    involved in organizing the Madrid conference. There we got
    commitments of up to $17 billion for reconstruction from the
    international community. Just this past weekend there was a
    meeting in Abu Dhabi where the United Nations and the World
    Bank trust funds announced they were open for business and
    countries started to commit money to those trust funds.
        In addition, there are the revenues that are coming from
    Iraqi oil. If you add all of those--our commitment, Iraqi oil,
    other revenues that are still coming in from frozen assets and
    Oil for Food contracts that were not implemented, as well as
    the international contributions--you are in the vicinity of
    about $50 billion.
        So that it is not at all clear at this stage just how much
    more we as the United States might have to contribute. I think
    the general sense is that, should we feel there is a further
    need for reconstruction funds, it would not be packaged as a
    supplemental, but instead be part of our total foreign
    assistance budget and sent up to the Congress that way.
        Senator Byrd. Just before the White House sent Congress its
    draft of an Iraq war resolution in September 2002, some
    proponents of confrontation with Iraq said that Members of
    Congress should explain to the American people their position
    on Iraq before the midterm elections. Now the administration
    wants to delay until after the upcoming Presidential election
    sending Congress the bill for keeping our troops in Iraq for
    another year.
        Dr. Zakheim, since the administration was so keen on
    getting the authority to go to war right before an election,
    does not the administration have the responsibility to let the
    American people know how much this war will cost? We are almost
    on the verge of getting into another election, and I think the
    American people are entitled to know this. What do you think?
        Dr. Zakheim. Well, sir, I certainly agree with you that
    there is another election coming. I think people can disagree
    about this. As we see it, we do not really have a good
    estimate. And I would not share your characterization of this
    as a slush fund. I want to make that clear. That is not how I
    would look at it. We do provide to the Congress monthly reports
    on our obligations. We do not have immediate monthly reports.
    We always run 3 months late.
        I believe, just as an analyst that to estimate the costs of
    fiscal year 2005 prior to the changes that are going to take
    place in Iraq and Afghanistan is probably to misestimate those
    costs, probably to put the wrong dollars in the wrong accounts,
    and therefore create problems thereafter.
        Senator Byrd. Why can you not say, though, doctor: this is
    the way we see it today. Now, there may be changes. Perhaps
    this will happen, perhaps that will happen, something else may
    happen. But, Members of Congress, this is the way we see it
    today; and on this basis, we would estimate thus and so.
        Now, if the administration would be up front like that,
    then we would have confidence in the administration, what it
    says. The American people would have some idea, knowing that it
    is not the final figure, of course, have some idea of what they
    are going to be asked to pay and over what period, how long a
    period. This would be, it seems to me, the fair way of
    proceeding, rather than do as the administration is doing:
    spend the money, present the Congress then with an ultimatum,
    give us the check, and Congress in the meantime has had no
    opportunity to conduct oversight as it is its responsibility,
    constitutional responsibility, to do.
        I see my time is up. Mr. Chairman, may the witness answer
    my question first?
        Senator Inouye. Yes.
        Senator Byrd. Thank you.
        Dr. Zakheim. Certainly, Senator. First of all, as you know,
    we do have expenditures that will be going out to September 30.
    So that is already spoken for and we will have to justify those
    and we will report those. The real issue is what do we do about
    the period between October 1 and roughly January-February
    timeframe, whenever the next supplemental would be available.
        Clearly, it is very difficult to estimate those costs at
    this time, for the reason I have given you. I do not think this
    is a deliberate effort to mislead. After all is said and done
    we know what the monthly costs are right now, $4.2 billion. We
    anticipate what the monthly costs will be through the end of
    September. But beyond that, I do not want to sound like a
    broken record, but beyond that we just do not know what the
    impact of this summer's events is going to be like.
        The Congress clearly will not have any kind of ultimatum,
    for the simple reason that if we go to the Congress next
    January with a request for the entire fiscal year, the entire
    fiscal year will not have happened by then and the Congress can
    choose how much and to what degree it wishes to support that
    supplemental.
        Senator Byrd. Mr. Chairman, I do not want to prolong this,
    but this makes it impossible for the Congress to conduct its
    constitutional oversight. The money is already spent, then we
    get the bill. In the meantime, we have no opportunity to delve
    into the facts which justify x number of dollars. That is
    number one.
        Number two, the President can go before the American people
    and say that he is going to cut, reduce the budget deficit by
    half, in 5 years, and he presents the Congress and the people
    with a budget for this year, and that is what we are working
    on. That is what these hearings are about. But in the meantime,
    these moneys that we will be spending in Iraq and Afghanistan
    do not show. Those are hidden figures.
        So the administration has the advantage, the political
    advantage, of saying, well, this is our budget for this year.
    The administration is not counting the costs of the wars in
    Iraq and in Afghanistan. These costs are on the side, you see.
    This is a gimmick that this administration is using, I must
    say, and the American people are being kept in the dark.
        This is what I am complaining about, and I hope that we
    will continue to press the administration to shed some light on
    this budget. The American people are entitled to have that
    light because they are footing the bill, and Congress is
    entitled to have that light. I have never seen it done like
    this. It is a practice here, it is a pattern, and it is
    calculated. Everybody ought to be able to see that.
        Mr. Chairman, thank you for your patience. Thank you, Dr.
    Zakheim. You have got a tough job to do. You have a hard job. I
    know you have to pursue the company line, as we used to say
    back in the coal mining camps in southern West Virginia, the
    company line. You have to do that, I know that. Thank you.
        Senator Inouye. Thank you very much.
        Senator Burns.

                        PROVINCIAL RECONSTRUCTION TEAMS

        Senator Burns. I think I have only one more question and
    that will wrap it up for me. We met with some of the folks over
    in Iraq, and in your statement you referred to it this morning
    on the PRT's. Would you elaborate on the plan to expand those
    Provincial Reconstruction Teams in Afghanistan and the cost?
    Have you got an estimated cost for that?
        I know we have one German-led PRT there currently. Are the
    Germans contributing to the cost of those PRT's? Would you sort
    of give us some sort of an idea of what is going on?
        Dr. Zakheim. Sure. The cost, because that is an answer I
    cannot give you offhand, I will get you for the record. We had
    eight. We are up to, I believe, 12 PRT's, of which one is a
    NATO/German one. That is the one in Kunduz. That is the one I
    was at. The British are running one in Mazar-e Sharif. The New
    Zealanders are running another one.
        [The information follows:]

        There are currently 17 PRTs. 14 are coalition-run (13 by
    United States and 1 by New Zealand) and 3 are NATO-run, 1 by
    Germany and 2 by the United Kingdom.
        Each PRT was estimated to cost $5 million to setup. The
    cost of supporting a PRT has been roughly estimated at $39,000
    to $98,000 per month. However, the size and composition of each
    PRT varies. Some have more military personnel, some have more
    USAID staff. In addition, frequent troop rotations from the
    U.S. military units supporting the PRTs lead to cost
    fluctuations. U.S. military units are supporting PRTs are
    funded with O&M funds.
        DOD has provided just under $30 million in Overseas
    Humanitarian Disaster and Civic Aid funds for PRT and civil
    affairs assistance projects combined in Afghanistan to date.

        Senator Burns. I think we ran into ours at Kandahar.
        Dr. Zakheim. We have a bunch of them now.
        There is a push for NATO--and not just NATO; for instance,
    the Swedes are going to be contributing and they are not in
    NATO--to start four more. In fact, your question about footing
    the bill goes to the heart of our position regarding these
    four. We are telling NATO that of course we support four more.
    We think it is a great idea. We think PRT's work. But NATO
    needs to provide the support.
        The Germans are contributing, although some of the support,
    the helicopter support, is what we are providing. We have made
    it clear that was a once-only exception. We are not going to do
    that. If countries want to contribute to PRT's, and we
    encourage them to, then they need to cover the costs.
        So we hope that eventually a significant number of these
    PRT's will be supported by the international community. There
    is talk of a Nordic one. There is talk of a second British one,
    and so on. There is a lot of interest around the world to
    contributing to them, because of what they do--and you have
    seen them. They are unique. There is a mix of troops, of
    civilians, of representatives of the central Afghan government.
    They work very well with international nongovernmental
    organizations. Actually, it is fascinating to see the
    evolution.
        A lot of these organizations were very suspicious of the
    military and therefore thought PRT's were just a stalking horse
    for the military. Now it is quite different, and you see people
    from institutions that you would not dream of having anything
    to do with the military speaking positively about it. It really
    is a terrific development, because what it does is enable the
    central government to demonstrate its reach throughout the
    country.
        Still, if countries want to be involved, they have got to
    foot the bill.

                              OPERATIONAL SUPPORT

        Senator Burns. Also, I ask about--and I think whenever we
    talk about technology, and this thing, I will just throw this
    as a question out there that I would like an answer to and we
    can do that in a private conversation also. We had four very
    good friends during the Afghanistan operation: Pakistan,
    Kazakhistan, Kyrgistan, and Jordan. I am wondering, are we
    doing anything in those countries to relieve some of the
    financial pressure off of those four countries?
        Dr. Zakheim. The answer is yes. Congress allowed us,
    actually with this committee's help, to reimburse a number of
    countries for the operational support they provide, and
    Pakistan is by far the biggest recipient. That continues. We
    are reimbursing Jordan as well. In fact, those two countries
    were specified in the legislation. But we are reimbursing
    others, too.
        Senator Burns. Well, we had tremendous support under the
    circumstances from Kazakhistan and Kyrgistan. I am going to
    Kazakhistan. I want to be met on friendly terms there when I
    get there.
        Dr. Zakheim. I think you will be.
        Senator Burns. Also, I made a couple trips out at Walter
    Reed to see some of the troops from Montana that were out
    there, which is a very rewarding situation. You know, we have
    got one young man out there who is afraid that they are not
    going to let him stay in the Guard and he wants to stay. He
    took quite a beating over there.
        With regard to that, I am told by--you know, the American
    people I do not think understand really fully, in the medical
    communities like Walter Reed and our research people on
    diseases we run into different kinds of challenges whenever we
    send our troops to foreign soil. I noticed a little bit in this
    last one that you cut back a little bit on R&D as far as
    research on the different kind of diseases. You know, we are
    going through a severe acute respiratory syndrome (SARS) thing
    now on the Pacific Rim and in China. These people are exposed
    to these things.
        I would question cutting back on your research because I
    think it is vitally important that the research moves forward
    in our medical communities, such as Walter Reed, Bethesda, the
    naval hospital, and that this work continue.
        Dr. Zakheim. Well, I will get for the record a breakdown of
    what has been, to the extent it has been reduced. I think Dr.
    Chu and Dr. Winkenwerder would be best in a position to give
    you that answer. I can say, however, that the level of research
    is still significantly high and it is precisely for the reasons
    you gave. When we send our troops to different parts of the
    world, they encounter diseases that have either been eradicated
    here or never existed here at all.
        I know there is a lot of research, not just within the Army
    medical community; the Army Medical Command manages research in
    universities, including international universities. Very often
    you will find that universities in the regions in which these
    diseases are found have a comparative advantage in terms of
    dealing with those diseases. That funding continues.
        But I will get you for the record details of that.
        [The information follows:]

        The military infectious disease research program continues
    to address countermeasures against the same number of different
    kinds of infectious diseases of military importance. Diseases
    such as malaria, bacterial diseases responsible for diarrhea,
    viral diseases (e.g. dengue fever and hanta virus), meningitis,
    viral encephalitis, scrubtyphus, leishmaniasis, hemorrhagic
    fever, and HIV are all part of the military infectious disease
    research program. This research is funded with core dollars out
    of the Medical Research and Materiel Command's budget. This
    means that the funds are programmed and budgeted for through
    the President's Budget process. From fiscal year 2002 to fiscal
    year 2004, there have been shifts in programs and changes in
    accounting for indirect laboratory costs. Overall there was a
    4.6 percent reduction in the core program between fiscal year
    2003 and fiscal year 2004 as priorities changed and other
    programs emerged in importance.

        Senator Burns. It is a different kind of research than we
    find in our traditional National Institutes of Health (NIH) or
    anything else, on infectious diseases.
        Dr. Zakheim. Absolutely, that is right.
        Senator Burns. And that has concerned most of us.
        Thank you, Mr. Chairman. That is all that I have.
        Senator Inouye. Thank you very much.
        Pursuant to the direction of Chairman Stevens----
        Senator Byrd. Mr. Chairman, might I ask another question?
        Senator Inouye. Please do.
        Senator Byrd. Thank you, Mr. Chairman. Thank you. I thank
    the acting chairman, and I thank you, Dr. Zakheim, and you,
    General Cartwright.

                       OPERATIONAL POST-HANDOVER NUMBERS

        Let me repeat my question earlier. The President sent his
    $87 billion fiscal year 2004 supplemental to Congress on
    September 17, 2003. Roughly 6 weeks later, that request was
    enacted and signed into law. Now, if the supplemental could be
    submitted in September in that instance, why can it not be
    presented in September this year, rather than wait until, was
    it January I believe you said?
        Dr. Zakheim. It is a function of the fact that in the first
    place we are, unlike September of that year where we were not
    funded at all, we are funded through the end of September, so
    that we have operations that will be covered.
        Second, we do not feel that it would pose particular
    difficulties for us to cash flow for about 3 months. Again, as
    I mentioned earlier, the Congress has its discretion, as you
    well know, Senator; it can choose whatever it wants to do for
    the remaining part of fiscal year 2005 in a supplemental or
    indeed how it wants to treat what we have requested for that
    first part of fiscal year 2005 in a supplemental.
        So the discretion is clearly there. We believe we can
    effectively cash flow those funds for the first few months. As
    I said, by September we will not have as yet a sense of the
    costs after the handover. If the handover is in the beginning
    of July, we will not have any numbers, any operational post-
    handover numbers, with which to work in September. It is as
    simple as that.
        We simply cannot come with any credible number. I mean,
    there will be such a massive----
        Senator Byrd. The way you are operating, it is not
    credible. It is not credible at all. What is the magic about
    January?
        Dr. Zakheim. Again, Senator, as I said, we need a couple of
    months experience subsequent to the handover in Iraq. That
    brings us to November-December timeframe. We need a month to
    put a supplemental together and that brings us to January.
        Senator Byrd. Mr. Chairman, just this final. At Secretary
    Rumsfeld's confirmation hearing, I asked what he was going to
    do about the Pentagon's broken accounting systems. Three years
    later, the Department of Defense is still nowhere close to
    passing an audit of its books. Congress has appropriated more
    than $200 million to develop a blueprint for a new computerized
    accounting system, but work on that plan, which was supposed to
    be completed in April 2003, is still not yet done.
        Meanwhile, DOD will spend $19 billion this year on those
    computers, on top of the $18 billion spent in 2003 on those
    faulty systems. You, Dr. Zakheim, and Secretary Rumsfeld have
    recognized the seriousness of these accounting problems. But
    how can you justify spending tens of billions of dollars on
    these computerized accounting systems when you do not even know
    how to fix what is wrong with those systems that we are pouring
    money into?
        How much more time and money is it going to take before the
    Pentagon can pass an audit of its books?
        Dr. Zakheim. Senator, as I have said for the last 2 years
    and as you and I have discussed, there are a number of steps
    necessary if we are going to get this right. We did in fact
    complete the enterprise architecture to which you refer on time
    and under budget in April 2003. We still have to test it with
    various pilot programs.
        The game plan was always to try to get a clean audit by
    2007. Now, we are not just waiting for the next 4 years to make
    that happen. Huge amounts of assets and liabilities have been
    added to--and are now showing on our books. Our fund balance
    with the Treasury has improved significantly. We have cut back
    on problem disbursements by, I believe, approximately two-
    thirds. I can get you all those numbers for the record.
        [The information follows:]

        In January 2001, the Department's problem disbursements stood at
    $4.163 billion. As of January 2004, we have reduced those problem
    disbursements by 65 percent to $1.437 billion.

        Dr. Zakheim. Frankly, I thank you for your encouragement in
    this regard. It has made a difference. We are trying to change
    the culture and the culture is changing. We review, I
    personally review, financial statements four times a year
    together with OMB, the Inspector General, and the General
    Accounting Office, sitting in my office reviewing these
    statements.
        We have cleaned those up. We have improved the footnotes,
    which nobody ever used to bother to read.
        Senator Byrd. I hope you are getting overtime pay.
        Dr. Zakheim. Well, I have not gotten it yet, sir.
        But I guess my long answer to your good question is we are
    on schedule to have clean audits by 2007. We are doing a lot of
    different things, and I will get you a fuller answer for the
    record.
        [The information follows:]

        But I guess that my long answer to your good question is we
    are on schedule to have clean audits by 2007. We are doing two
    major things in this unprecedented effort. First, I have
    directed fund holders within Defense to develop financial
    improvement plans which detail how the fund holder will
    overcome its deficiencies which prevent it from obtaining an
    unqualified audit opinion. Plans identify deficiencies,
    corrective actions by financial statement line item, and
    prepare the entity for audit. Lastly, I have established an
    executive steering committee (ESC) to oversee execution of the
    initiative. Committee members include the Deputy Chief
    Financial Officer, the Deputy Comptroller, Program/Budget, the
    Director of the Defense Finance and Accounting Service, and the
    Inspector General, DOD. In accordance with Section 1008, the
    ESC reviews the plans and prioritizes assessments and audits of
    entities when they assert audit readiness.

        Senator Inouye. If there are any additional committee
    questions, they will be submitted to you for your response.

                              SUBCOMMITTEE RECESS

        Senator Byrd. Thank you. Thank you, Dr. Zakheim.
        Thank you, Senator.
        Senator Inouye. Thank you very much.
        Pursuant to the direction of Chairman Stevens, the hearing
    is recessed.
        [Whereupon, at 12:20 p.m., Monday, March 1, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    March 3.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            WEDNESDAY, MARCH 3, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:11 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Shelby, Hutchison,
    Burns, Inouye, Leahy, and Dorgan.

                             DEPARTMENT OF DEFENSE

                             Department of the Army

    STATEMENT OF HON. LES BROWNLEE, ACTING SECRETARY OF THE
                ARMY
    ACCOMPANIED BY GENERAL PETER T. SCHOOMAKER, CHIEF OF STAFF, UNITED
                STATES ARMY

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning, ladies and gentlemen. I
    apologize for being late. I was presiding over the Senate. We
    have all got too many things scheduled these days.
        Today we are going to receive the testimony from the Acting
    Secretary of the Army and the Chief of Staff on the Army's
    fiscal year 2005 budget request. Secretary Brownlee, we welcome
    you for your first time before our committee. We look forward
    to hearing your plans to modernize the Army. You are no
    stranger to this Senate or to the committee, even though you
    were on the other committee. We are pleased to welcome you back
    as a friend and a colleague.
        General Schoomaker, we welcome you to our committee. We
    look forward to working with you in the coming years, and I
    thank you again for making the trip, the long trip to Alaska
    for the military appreciation dinner there. It is very
    important to our people.
        The Army is now well on its way towards the future with its
    transformation plans. We are at war and this transformation to
    our future force is continuing. It is a huge undertaking to do
    both at the same time. We are also conducting a global war on
    terrorism, the war in Iraq, the war, ongoing activities in
    Afghanistan, and now Haiti. We are constantly reminded of the
    need for a strong, modern, prepared Army, and it is as
    important today as it ever was, more important probably, to
    have a military which has the resources it needs and the
    support of the President and the entire country.
        Today you are deployed all over the globe. We have 320,000
    soldiers deployed or stationed forward, as I am informed. The
    Guard and Reserve are also sharing this burden, with more than
    100,000 reservists and guardsmen mobilized and on active duty.
    The total force is a reality now.
        There are many important issues facing the Army. One of the
    most critical decisions Congress will make this year is how to
    help the Army reorganize and equip itself for future threats.
        I believe you have demonstrated to the Congress and the
    country that the transformation concept is not simply a new
    weapons platform, but a new doctrine, a new organizational
    concept for the Army, and it is a whole new way for the Army to
    fight and win wars. We appreciate your combined commitment to
    the Army and your willingness to serve to ensure that the Army
    remains on the right course.
        It is the intention of this committee to give you the
    support you need to achieve your goal of modernization.
        My distinguished friend from Hawaii is not here this
    morning because he is chairing another committee. He will be
    here soon. We do have other Senators. Do any of you have an
    opening statement to make before we listen to the General and
    the Secretary? Senator Shelby.
        Senator Shelby. Mr. Chairman, I look forward to the
    testimony.
        Senator Stevens. Senator Hutchison.

                   STATEMENT OF SENATOR KAY BAILEY HUTCHISON

        Senator Hutchison. Mr. Chairman, I will make mine a part of
    the record. But I agree with what you have said. We do have
    boots on the ground in two very dangerous places and our own
    homeland is also now a focus for attack. So the Army is the one
    that is out there, obviously Guard and Reserve. I will be
    interested in hearing how you are going to handle the fatigue
    of the Guard and Reserve and ramp up our active duty forces,
    which you have already addressed publicly, but we hope to hear
    more about, and how you would finance that.
        So you have a huge job and we are here to support you in
    every way. Thank you.
        [The statement follows:]

               Prepared Statement of Senator Kay Bailey Hutchison

        As a member of this committee, I have been privileged to
    visit with our soldiers who are fighting to free Iraqis and
    Afghans who for decades lived perilously under the oppressive
    regimes of Saddam Hussein and the Taliban. These same soldiers
    are proudly working to create an environment where people no
    longer fear the government under which they live and work. They
    are helping to rebuild and secure societies in which freedom is
    a right and not a quantity to be metered out by the few in
    positions of power.
        Unfortunately, as I sit before you today, men and women of
    our Armed Forces are still deployed in harms way. And if
    statistics hold true, some will be either wounded or killed.
    With this in mind, I think it is appropriate and indeed
    necessary for us to ask difficult questions. Knowing how the
    Army is successfully confronting an adversary which does not
    wage open battle against the United States, but seeks less
    direct methods and means for achieving their objectives is
    important. Indeed, the threats to our security have transformed
    themselves into a decidedly unconventional threat. Our enemies
    pursue asymmetrical approaches to warfare, including
    nontraditional threats to the homeland, the use of weapons of
    mass destruction, and modern forms of irregular warfare. Army
    transformation therefore must not only be designed to confront
    the enemy which the Stryker brigades are best suited for, but
    also an unconventional enemy utilizing asymmetric means and
    methods both abroad and at home.
        The greatest challenge for the Army, including the Reserve
    and National Guard, may be organizing, equipping and training
    the force to serve in a more relevant role in Homeland Defense
    and Security. Ironically, the United States is less likely to
    enjoy the kind of sanctuary status from attack in the future
    than in the past. The global transportation network has made
    intercontinental travel more routine. Our borders are porous to
    both the illegal immigrant and the international terrorist
    alike. We now face an implacable enemy willing and able to
    attack the homeland. The increased focus on homeland defense
    and the growing requirement for the Army to divert resources
    away from the more traditional roles and missions of an
    expeditionary Army raise a very important question: How does
    the Army and the DOD intend to fund an on-going global war on
    terrorism, while reorganizing, equipping, and developing
    missions for the active, reserve, and National Guard to best
    defend the homeland against another attack the likes of 9/11?
        While there is no shortage of challenges, I look forward to
    hearing how the Army will continue to overcome them. It is with
    deep gratitude and the utmost respect for the soldiers
    currently serving to defend this great country that I thank you
    for your service and look forward to our discussion on how best
    to prepare for the future.

        Senator Stevens. I apologize. Senator Dorgan, do you have
    any opening statement?
        Senator Dorgan. No, Mr. Chairman.
        Senator Stevens. Senator Cochran, do you have any opening
    statement?
        Senator Cochran. Mr. Chairman, I do not.
        Senator Stevens. Gentlemen, we are prepared to listen to
    your testimony and welcome you here. We all have an enormous
    task to assure that you have the funds and the authority you
    need to keep this modernization going. So, Senator Brownlee--
    Secretary Brownlee.
        Mr. Brownlee. Mr. Chairman and distinguished members of
    this committee: Thank you very much for the opportunity to
    appear before you today along with my good friend and fellow
    graduate of the University of Wyoming Reserve Officer Training
    Corps (ROTC) program, the Chief of Staff of the United States
    Army, General Pete Schoomaker.
        General Schoomaker and his family made a very difficult
    decision last summer to leave quite a comfortable and lucrative
    retirement to come back and rejoin the Army. The Army is
    benefiting in an enormous way from his marvelous leadership. I
    am especially honored to appear alongside this great soldier
    today and I am honored to work alongside him every day. I could
    not measure what he has brought to the Army. He has brought a
    new meaning to the word ``transformation'' and he has
    revitalized the spirit of our soldiers with his emphasis on the
    Soldier's Creed and the Warrior Ethos. So it is a great honor
    for me to be here before the committee representing the
    magnificent soldiers of our Army along with the Chief of Staff.
        We have a prepared posture statement, Mr. Chairman, and
    with your permission we would like to submit that statement for
    the record.
        Senator Stevens. We automatically submit all statements for
    the record in this committee.
        Mr. Brownlee. Let me begin by expressing my gratitude for
    the tremendous support to our soldiers who are serving our
    country around the world, as well as to their families at home.
    This support comes from the members as well as from your
    dedicated professional and personal staffs. Your interest and
    involvement in the Army's activities has made a significant
    difference in our soldiers' welfare and their mission
    accomplishment. So to the members and staff of this very
    distinguished committee, on behalf of the United States Army,
    thank you all for what you have done.
        I know that you are deeply interested in the great work our
    soldiers are doing, their training, and their morale and how we
    are equipping them. In the last 9 months I have visited our
    troops in Iraq three times and those in Afghanistan twice and
    traveled to our posts in Germany, South Korea, and here in the
    United States. I am grateful to have the opportunity to share
    what I have learned with you.
        Underlying everything we are doing and planning to do is
    the most important point I want to make here today, and that is
    that we are an Army at war, serving a Nation at war.
        To better cope with the demands of this war, we have
    proposed to grow the Army temporarily by 30,000 soldiers over
    the next several years, using the authority provided in Title
    10 and to be paid for from supplemental appropriations. We will
    plan to use these resources to stand up at least 10 new combat
    brigades over the next several years and ask for your support
    in this endeavor. We are also restructuring our Active and
    Reserve forces to meet the challenges of today and to more
    effectively use the resources the Congress and the American
    people have entrusted to us. This is an ongoing process and we
    will keep the Congress fully informed.
        Let me comment on a matter of grave importance to the
    senior leadership of the Army, sexual assaults on soldiers by
    fellow soldiers. Such attacks not only weaken unit cohesion and
    lessen combat power; they are wrong, they will not be
    overlooked, and they will not be tolerated. The Army is
    committed to identifying and holding accountable those who
    commit such actions as well as committed to providing proper
    care for the victims of such attacks.
        We are dedicated to creating an environment and a command
    climate where these young women feel free to report these
    incidents through multiple venues: the chain of command,
    medical channels, chaplains, and their peers. We will properly
    care for those who have been assaulted and investigate and take
    appropriate action against those perpetrating these crimes. It
    is the right thing to do and we are going to do it.
        Many of you have asked about the measures we are taking to
    protect our forces in Iraq. I would like to address two in
    particular. First, the number of up-armored high mobility
    multipurpose wheeled vehicles (HMMWV's) in the U.S. Central
    Command (CENTCOM) area of responsibility is now over 2,000,
    compared to about 500 last spring. When General Schoomaker and
    I testified before the Senate Armed Services Committee in
    November, we estimated then that we would be unable to satisfy
    the CJTF-7 requirement of 3,000 up-armored HMMWV's until May
    2005. This was unacceptable. We have worked with industry to
    steadily increase production of these vehicles and we will now
    reach a production level of over 4,000 vehicles by August 2004.
        We will ramp up from 185 vehicles this month to 220 by May
    and continue to increase until we reach our requirement. I have
    talked to the chief executive officers (CEO's) of the companies
    that build these up-armored HMMWV's and visited their
    production lines. They are committed to and capable of
    increasing production rates to up to 450 per month to help us
    fill our requirement even faster. While this will require
    additional resources, we are working within the Army budget and
    with the Office of the Secretary of Defense (OSD) so that we
    can achieve this accelerated production level as quickly as
    possible.
        Second, there has been concern about every soldier having
    the best available protection against bullets and explosive
    fragments. To provide this protection, we increased the
    production of Interceptor body armor last year and are
    currently producing and shipping 25,000 sets monthly to the
    theater of operations. There are now sufficient stocks of
    Interceptor body armor to equip every soldier and Department of
    Defense (DOD) civilian in Iraq and Afghanistan, and we will
    fill our requirement for the remainder of the soldiers and DOD
    civilians in theater by the end of this month.
        In summary, we are producing enough body armor so all
    soldiers now rotating into theater will be issued a set of body
    armor either before they deploy into Iraq or immediately after
    arrival in Afghanistan.
        The Army provides relevant and ready campaign-quality land
    power to combatant commanders as a part of a joint force. To
    better do this, we are transforming the Army itself in response
    to lessons learned and experiences gained by the Army's recent
    2\1/2\ years of combat in the global war on terrorism, as well
    as the operational environments envisioned in the foreseeable
    future.
        Last Monday General Schoomaker and I announced the
    termination of the Comanche helicopter program as part of a
    major restructuring and revitalization of Army aviation. In
    lieu of completing development and procuring 121 Comanche
    helicopters in the fiscal year 2005 through fiscal year 2011
    future years defense plan (FYDP), we will propose to reallocate
    these resources to procure almost 800 new aircraft for the
    Active and Reserve components.
        As a part of our total program over the FYDP, we will also
    enhance, upgrade, and modernize over 1,400 aircraft in our
    existing aviation fleet. This program to revitalize Army
    aviation reflects the changed operational environment and will
    provide the modularity and flexibility we must have to achieve
    the joint and expeditionary capabilities that are so essential
    to the Army's role now and in the future.
        The fiscal year 2005 President's budget we have submitted,
    when amended to reflect the termination of Comanche, represents
    a balanced consideration of both our current and long-term
    requirements and provides our Army with the resources we need,
    excluding war-related costs. The tempo of our current
    operations is high and has human and material costs. We
    appreciate the assistance of the Congress in addressing these
    issues as we work to restore our units and equipment to the
    high levels of readiness necessary to continue to meet our
    obligations to the Nation.
        In all that the Army has accomplished and all that it will
    be called upon to do, the American soldier remains the single
    most important factor in our success. Today our soldiers are
    present in over 120 countries around the world, representing
    the American people and American values with courage and
    compassion. I want to express my appreciation for the service
    and the enormous sacrifices made by our soldiers, especially
    those who have given the last full measure, and their families
    as we meet the challenges and risks posed by the war on terror.
        Our deepest thanks go to the members of our Active and
    Reserve component units, as well as to the thousands of
    Department of the Army civilians who are deployed overseas in
    harm's way. Regardless of where our soldiers serve, they
    perform as the professionals they are with skill, courage,
    compassion, and dedication. They embody the values of our Army
    and our Nation, serving selflessly and seeking only to do what
    must be done before returning home.
        Despite remarkable successes, our fight is far from over.
    It will take time to win the war on terror. Our enemies are
    resolute, but hard-line al-Qaeda operatives in Iraq recognize
    they cannot dislodge our forces by fear or intimidation. Our
    commitment to prevail in Iraq and elsewhere is unshakable. I
    have seen the resolution in our soldiers' eyes and heard the
    determination in their voices.
        We must do our part to ensure they have all they need to do
    the job we have set before them. When the American people and
    our leaders stand behind them, they can do any task on Earth.
        We are transforming the Army while retaining the values
    critical to the Army's achievements of the past 228 years. The
    fiscal year 2004 defense legislation and supplemental
    appropriations have enabled the Army to do that which it has
    been asked to do and I look forward to discussing with you how
    the fiscal year 2005 budget request will permit us to continue
    meeting our obligations now and in the years to come.
        Mr. Chairman, in closing I would like to thank you and the
    members of this distinguished committee for your continuing
    support of the men and women in our Army, an Army at war, and a
    full member of the joint team, deployed and fighting terror
    around the world.

                               PREPARED STATEMENT

        I appreciate this opportunity to appear before you today
    and I look forward to answering your questions.
        Senator Stevens. Thank you very much.
        [The statement follows:]

      Prepared Statement of Honorable R.L. Brownlee and General Peter J.
                                   Schoomaker
                                                      February 5, 2004.

        Our Nation is at war. The security of our homeland, the Global War
    on Terror, and sustained engagement around the world define today's
    complex and uncertain strategic environment. The future will be no less
    ambiguous.
        We must prepare now to meet the challenges of tomorrow. Rather than
    focusing on a single, well-defined threat or a geographic region, we
    must develop a range of complementary and interdependent capabilities
    that will enable future joint force commanders to dominate any
    adversary or situation. A capabilities-based approach to concept and
    force development, as articulated in the 2001 Quadrennial Defense
    Review, is the major focus of defense transformation.
        Over the past year our Army has met the demands of the Global War
    on Terror, with more than 325,000 troops deployed around the world in
    over 120 countries. The Army was instrumental in the defeat of Saddam
    Hussein and the Taliban and the subsequent liberation of more than 46
    million people from oppression and despair. The Army remains a central
    and critical participant in Operation Iraqi Freedom and Operation
    Enduring Freedom. Although these and other operations have stressed the
    force, our Soldiers have responded magnificently.
        Our Army's commitment to the Nation remains absolute. While we
    execute the Global War on Terror, our Army simultaneously continues its
    organizational and intellectual transformation to meet the challenges
    of the 21st Century. In support of the National Security Strategy and
    the National Military Strategy we are improving our warfighting
    readiness and ability to win decisively. We also remain dedicated to
    the well-being of our Soldiers, their families and our civilian
    workforce.
        The United States Army is the most powerful land force on earth.
    With this power comes a great responsibility. American Soldiers show by
    their daily actions that they understand this, and are fully worthy of
    the trust the American people have placed in them.
        For 228 years the Army has never failed the Nation, and it never
    will.

                                           Peter J. Schoomaker,
                                    General, U.S. Army, Chief of Staff.
                                                 R.L. Brownlee,
                                          Acting Secretary of the Army.

                        PURPOSE OF THE POSTURE STATEMENT

        The Army Posture Statement provides an overview of today's Army.
    Focusing on the Soldier, the centerpiece of the force, it explains the
    current and future strategic environments that provide our mandate for
    transformation. Our core competencies and how we intend to meet our
    current demands and future challenges are outlined. It describes what
    we must become in order to provide more ready and relevant forces and
    capabilities to the Joint Team.

                 2004 ARMY POSTURE STATEMENT EXECUTIVE SUMMARY

    Our Nation At War
        Our Nation, and our Army, are at war. It is a different kind of
    war, fought against a global terrorist network and not likely to end in
    the foreseeable future. In the days following the attacks on September
    11, 2001, President Bush spoke candidly to the Nation. ``These
    terrorists kill not merely to end lives, but to disrupt and end a way
    of life.'' He added: ``The only way to defeat terrorism as a threat to
    our way of life is to stop it, eliminate it and destroy it where it
    grows.''
        Our Army exists to fight and win our Nation's wars. We are an
    integral member of the Joint Team committed to winning in fulfillment
    of our responsibilities to national security. We are fighting to
    preserve the American way of life and to safeguard the many freedoms
    our citizens enjoy. Our Soldiers and their families have not forgotten
    the events of September 11, which launched us to action in Afghanistan
    and Iraq. They are reminded daily of the ongoing conflict through
    separation, concern for forward-deployed loved ones and, most
    regrettably, news of casualties. Our Army continues the mission and
    remains committed to defeating our enemy.

    Our Army's Core Competencies
        As our Army fights the current war and remains dedicated to
    transforming, we are focused on our two core competencies: (1) Training
    and equipping Soldiers and growing leaders; (2) Providing relevant and
    ready land power to Combatant Commanders as part of the Joint Force.
        Our Army must be an agile and capable force with a Joint and
    Expeditionary Mindset. This mindset is the lens through which we view
    our service. We must be mobile, strategically deployable and prepared
    for decisive operations whenever and wherever required. We must be
    lethal and fully interoperable with other components and our allies, as
    well as flexible, informed, proactive, responsive and totally
    integrated into the joint, interagency and multinational context. Our
    management and support processes must reflect and support these same
    characteristics.

    Strategic Environment--Our Mandate for Transformation
        At the end of the Cold War, the United States had no peer
    competitor. Our Army was much larger and was built around heavy,
    mechanized and armored formations. Because America stood as the lone
    superpower during this time of global realignment, we were able to
    downsize our force structure. Today, the future is uncertain and
    presents many challenges. The emerging challenges manifest themselves
    as new adaptive threats, employing a mix of new and old technologies
    that necessitate changes to the ways in which the elements of our
    national power are applied.
        The 21st century security environment is marked by new actors and a
    noteworthy proliferation of dangerous weapons, technologies and
    military capabilities. While threats from potentially hostile regional
    powers remain, increasingly non-state actors, operating autonomously or
    with state-sponsorship, also are able to endanger regional and global
    security. These forces--insurgents, paramilitaries, terrorists, narco-
    traffickers and organized crime--are a growing concern. They often are
    networked and enabled by the same tools and information systems used by
    state actors. Our adversaries will rely more frequently on indirect and
    asymmetric methods, such as anti-access and area-denial strategies,
    unrestricted warfare and terrorism, to mitigate their relative
    disadvantage. The most dangerous of these threats are the development
    and proliferation of weapons of mass destruction (WMD)--including
    biological or chemical agents, or radiological ``dirty bombs''--to
    attack the United States. This security environment requires that the
    Army have the capability to dominate throughout the spectrum of
    conflict and to plan for multiple future contingencies.
        As a result of this adaptive enemy and our worldwide commitments,
    current organizations, systems and facilities are and will continue to
    be stressed. We now rely on our Reserve Component to support our
    operations to a degree not seen since World War II. As of January 14,
    2004, there were more than 164,000 Reserve Component Soldiers mobilized
    with over 139,000 of them serving overseas. The institutional Army is
    being asked to do more, applying lessons learned from current
    operations. These lessons are critical to our organizations and
    individual Soldiers as they prepare for worldwide missions. Therefore,
    the current and future strategic environments require the Army to have
    the capability to dominate throughout the spectrum of conflict and to
    plan for multiple contingencies. These new security challenges, coupled
    with the current war on terrorism, require a different approach.

    Army Focus Areas
        Last summer, Army leaders identified immediate focus areas
    instrumental to adapting Army organizations and processes that will
    help us to better meet the Nation's security requirements. All of our
    focus areas should be viewed in the context of our ongoing efforts to
    retain the campaign qualities of our Army while simultaneously
    developing a Joint and Expeditionary Mindset. Of these focus areas, a
    critical enabler is the redesign of our resource processes to be more
    flexible, responsive, and timely. Our goal is to be a better Army every
    day--better able to execute our core competencies as members of the
    Joint Team.

    Adapting Resource and Acquisition Processes
        The resource process is at the core of our Army's mission success.
    Our Nation faces a cunning and adaptive enemy, predictable only in his
    zeal and intent. We are just as cunning and our Soldiers are constantly
    changing tactics and techniques in order to disrupt the enemy's plans.
    In the same way, our resource and acquisition processes must become
    more flexible, responsive and timely in order to take immediate
    advantage of technological improvements and to sustain the quality of
    the force over time.

    Resetting Our Force
        Quickly resetting our forces upon their redeployment from current
    operations is a strategic imperative. The reset program incorporates
    lessons learned from Operation Iraqi Freedom (OIF) and Operation
    Enduring Freedom (OEF), retrains essential tasks, adjusts pre-
    positioned stocks of equipment and ammunition, and brings unit
    equipment readiness back to standard. Units must recover quickly in
    order to provide the Combatant Commanders with land-power capabilities
    for future requirements. We will face challenges as we rotate troops
    from deployment to home station, while simultaneously maintaining
    vigilance and readiness.
        Continued congressional support and adequate resources are needed
    to accomplish our reset tasks and to mitigate the risk we have incurred
    to our Current and Future Forces. The fiscal year 2004 defense
    legislation and supplemental appropriation delivered substantial
    assistance toward covering the cost of current operations and
    initiating the reset process. We fully appreciate the exceptional
    support Members and their staffs have provided this year. But, the job
    is not complete. In fact, it has only just begun.

    Mitigating Strategic Risk Through Increased Land Power Capability
        Today our Army is executing operations in defense of the homeland
    (Operation Noble Eagle); stability and support operations in the
    Balkans (Stabilization Force/Kosovo Force); peacekeeping in the Sinai
    as part of the Multinational Force and Observers (MFO) and combat
    operations in Iraq and Afghanistan (Operation Enduring Freedom/
    Operation Iraqi Freedom). We are also forward stationed in Korea and
    elsewhere. Approximately two-thirds of our active and reserve combat
    formations were deployed in fiscal year 2003 and will be deployed in
    fiscal year 2004.
        These deployments, coupled with planned future rotation of units
    into OIF and OEF, the largest movement of Army troops since World War
    II, have highlighted already existing stress to our force. To mitigate
    risk, the Army is embarking on a series of initiatives. The first
    initiative is resetting forces returning from OIF and OEF to a standard
    higher than before their deployment. A second establishes force
    stabilization measures to reduce turbulence amongst Soldiers, units and
    their families. Thirdly, the Army is internally rebalancing Active and
    Reserve Component forces to better posture our existing force structure
    to meet global commitments. And lastly, we are beginning to increase
    the number of available combat brigades through improved force
    management and modular reorganization. This increase allows the Army to
    improve strategic flexibility, sustain a predictable rotation cycle,
    and permits the Reserve Component to reset.
        To facilitate this end state, the Army will seek to maintain, or
    even to increase temporarily, its current level of manning. These
    measures, when resourced, will mitigate risk and ultimately provide
    increased capability to Combatant Commanders.

    Conclusion
        Our Nation is at war and our Army is at war; we remain ever
    relevant and ready to meet today's challenges. Yet there is much more
    to do. We are prioritizing wartime requirements, incorporating next-
    generation capabilities into current systems where appropriate, and
    preserving essential investments in the Future Force. We also are
    becoming more joint and expeditionary. We do not move forward alone,
    but as part of the Joint Team. We need the support of the American
    people and the U.S. Congress. With this backing, we will continue to
    carry the fight to our enemies to provide security here at home.

                               CORE COMPETENCIES

        Our Army has two core competencies, supported by a set of essential
    and enduring capabilities. These core competencies are: (1) training
    and equipping Soldiers and growing leaders; and (2) providing relevant
    and ready land-power capability to the Combatant Commanders as part of
    the Joint Force. Additionally, our Army's senior leadership has
    established immediate focus areas and issued specific guidance for
    planning, preparation and execution of actions aimed at rapidly
    effecting necessary transformation in support of these core
    competencies. See Addendum I (available at www.Army.mil) for more
    information on the Army's focus areas.

    Train and Equip Soldiers and Grow Leaders
        Our Army prepares every Soldier to be a warrior. Our training
    replicates the stark realities of the battlefield in order to condition
    Soldiers to react instinctively in combat. Such training is essential
    to building Soldiers' confidence in themselves, their equipment, their
    leaders, and their fellow Soldiers. Constant training in weaponry and
    field craft, and a continuous immersion in the warrior culture, give
    Soldiers the skills they need to succeed on the battlefield. Mental and
    physical toughness are paramount to the development of the warrior
    ethos and apply to all Soldiers from private to general. Every Soldier
    is called upon to be a leader.

                The Soldier
        The American Soldier remains the centerpiece of our combat systems
    and formations and is indispensable to the Joint Team. Adaptive,
    confident and competent Soldiers, infused with the Army's values and
    warrior culture, fight wars and win the peace. As a warrior, every
    Soldier must be prepared to engage the enemy in close combat; the
    modern battlefield has no safe areas. Our Army trains our Soldiers to
    that standard, without regard to their specialty or unit. The Soldier--
    fierce, disciplined, well-trained, well-led and well-equipped--
    ultimately represents and enables the capabilities our Army provides to
    the Joint Force and the Nation.
        Our Soldiers are bright, honest, dedicated and totally committed to
    the mission. All share common values, a creed and a warrior ethos. Our
    Army defines selfless service as putting the welfare of our Nation,
    Army and subordinates before your own. Soldiers join the Army to serve.
    Most Americans do not fully realize the personal sacrifices these
    Soldiers and their families endure. However, our Soldiers know that
    they have done their part to secure our Nation's freedoms and to
    maintain the American way of life.
        Our Soldiers' Creed captures the warrior ethos and outlines the
    professional attitudes and beliefs that characterize our American
    Soldier. The warrior ethos is about the refusal to accept failure and
    the conviction that military service is much more than just another
    job. It defines who Soldiers are and what Soldiers do. It is linked to
    our long-standing Army Values, and determination to do what is right
    and do it with pride.

                Recruiting and Retaining a High-Quality Volunteer Force
        All of our Soldiers are warriors whose actions have strategic
    impact. Because we are at war and will be for the foreseeable future,
    we must recruit Soldiers who have the warrior ethos already ingrained
    in their character, who seek to serve our Nation, and who will have the
    endurance and commitment to stay the course of the conflict. We must
    recruit and retain Soldiers who are confident, adaptive and competent
    to handle the full complexity of 21st century warfare.
        We will continue to bring the highest quality Soldier into the
    force. All newly enlisted Soldiers are high school graduates (diploma
    or equivalent) and 24 percent have some college. These young Americans,
    who believe service to our Nation is paramount, make our success
    possible. They display a willingness to stand up and make a difference.
        Our recruiting and retention efforts continue to be successful. The
    active Army met its recruiting and retention goals in fiscal year 2003.
    The Army National Guard exceeded its retention goals for fiscal year
    2003 and simultaneously met its end strength objectives. The Army
    Reserve met its recruiting goals and all but one retention target in
    fiscal year 2003. Most importantly, all components sustained their end-
    strength requirements.
        We do not know yet the effect the high operational pace of recent
    months will have on our recruiting and retention in fiscal year 2004
    and future years. We must carefully monitor recruiting and retention
    trends and adequately resource our successful recruiting and retention
    initiatives. Incentives such as the Enlistment Bonus Program, The Army
    College Fund and the Loan Repayment Program, have successfully enabled
    the Army to execute precision recruiting in fiscal year 2003. Our
    Special Forces Candidate ``Off the Street'' initiative continues to
    attract highly motivated and qualified warriors. Significantly,
    Selective Reenlistment Bonuses, such as the Present Duty Assignment
    Bonus and the Theater Selective Reenlistment Bonus, which are intended
    to enhance unit stability, have helped us realize our retention
    successes. For more information on recruiting, see Addendum C.

                Civilian Component Enhances Our Capabilities
        Army civilians are an integral and vital part of our Army team.
    They are essential to the readiness of our Army at war and our ability
    to sustain operations. Our civilian employees share our Army values.
    They are smart, resourceful and totally committed to supporting our
    Soldiers and our Army to do whatever it takes to meet the challenges
    that come our way. These dedicated civilians perform critical, mission-
    essential duties in support of every functional facet of combat support
    and combat service support, both at home and abroad. Army civilians
    serve alongside Soldiers to provide the critical skills necessary to
    sustain combat systems and weaponry. They work in 54 countries in more
    than 550 different occupations. In fiscal year 2003, nearly 2,000 Army
    civilians deployed to Southwest Asia in support of Operation Iraqi
    Freedom, Operation Enduring Freedom, and the Global War on Terrorism
    (GWOT). They have the education, skills and experience to accomplish
    the mission while ensuring continuity of operations for all commanders.

                Realistic Training--Essential to Mission Success
        Tough, realistic training ensures that our Soldiers and units
    maintain readiness and relevance as critical members of the Joint
    Force. Our Army's combined-arms training strategy, including an
    appropriate mix of live, virtual, and constructive training, determines
    the resource requirements to maintain the combat readiness of our
    troops. We revised our training ammunition standards to allow Combat
    Support and Combat Service Support units to conduct live fire exercises
    under conditions similar to those they might encounter in combat.
        The Army's OPTEMPO budget is among its top priorities. Our
    leadership is committed to fully executing the Active and Reserve
    Component ground and air OPTEMPO training strategies, which include
    actual miles driven and hours flown, as well as virtual miles
    associated with using simulators. The flying hour program is funded to
    achieve a historic execution level of live flying hours per aircrew per
    month. If units exceed the historic execution level, our Army will
    increase their funding. Thus far this year, OPTEMPO execution reports
    show units exceeding their programmed miles driven and hours flown.
    These are the units that are aggressively preparing for deployments to
    OIF and OEF, as well as the units who recently have returned and are
    preparing for future operations. Our combined arms training strategy is
    working and sustaining our warfighting readiness. We see the results
    every day in Afghanistan and Iraq.

                Joint and Expeditionary
        Our Army is the dominant ground component of the Joint Team and
    provides the Joint Force Commander a campaign quality force with unique
    and complementary capabilities. We are vital and indispensable members
    of the Joint Team first and are a Service second. We must remain aware
    that our Army always conducts operations--offensive, defensive,
    stability and support--in a joint and expeditionary context. Acting in
    concert with air and naval power, decisive land power creates a synergy
    that produces a Joint Force with abilities far exceeding the sum of the
    individual service components. Our Army can: support civil authorities
    at home and abroad; provide expeditionary forces at the right time and
    the right place; reassure our allies and multinational partners; deter
    adversaries and, should deterrence fail, decisively defeat the enemy;
    and win the peace through post-conflict operations, in concert with
    interagency and multinational efforts. Our Army must continually
    examine the capabilities resident in and required by the Joint Force.
    We will concentrate our energies and resources on those attributes
    which our Army is best suited to provide to the Joint Force. Our Army
    will arrive on the battlefield as a campaign-quality force fulfilling
    the requirements of the Joint Force Commander--lethal, agile, mobile,
    strategically responsive, and fully interoperable with other components
    within the interagency and multinational context.

                Train and Educate Army Members of the Joint Force
        Our Army is taking action across a broad front to make jointness an
    integral part of our culture by including this concept in our education
    and training programs. We have always produced leaders with the right
    mix of unit experience, training, and education. As we look to the
    future, we know that, to meet our current and future leadership
    requirements and those of the Joint Force, we must redesign aspects of
    our Army's training and leader development programs to include lessons
    learned from current operations. Our objectives are to increase our
    ability to think and act jointly and to provide our Soldiers with the
    latest and most relevant techniques, procedures and equipment that will
    make them successful on the battlefield. Additionally, the changes
    acknowledge the current and projected pace of operations and
    deployments. As a result, we will be better prepared for the current
    and future strategic environments.
        Maintaining a ready Current Force today and achieving a transformed
    Future Force tomorrow requires a shift in the way units train for joint
    operations. Our Army's Training Transformation Initiative (TTI), which
    supports the June 2003 Defense Department Training Transformation
    Implementation Plan, provides dynamic, capabilities-based training and
    mission rehearsal in a joint context.

                Leader Development--Train For Certainty, Educate For
                        Uncertainty
        Leader development is an essential part of our Army's core
    competencies and the lifeblood of our profession. It is the deliberate,
    progressive and continuous process that develops our Soldiers and
    civilians into competent, confident, self-aware, adaptive and decisive
    leaders. They emerge prepared for the challenges of 21st century
    combined arms, joint, multinational and interagency operations.
        Army leaders at all levels bear responsibility for America's
    Soldiers and accomplishing the mission, whatever it may be. The range
    of missions and their complexity continue to grow, presenting our
    leaders with even greater challenges than previously experienced. The
    evolving strategic environment, the gravity of our strategic
    responsibilities, and the broad range of tasks that the Army performs
    require us to review, and periodically to refocus, the way we educate,
    train and grow professional warfighters.
        We have a training and leader development system that is unrivaled
    in the world. Our professional military education prepared our officers
    and noncommissioned officers to fight and win in Iraq and Afghanistan.
    We will continue to develop our leaders with the right mix of
    operational assignments and training and education opportunities that
    meet the current and future requirements of the Army and Joint Force.
    Our leader training focuses on how to think, not what to think. We will
    maintain our investment in the future by sustaining the highest quality
    leader training and education for our Army.

                Combat Training Centers (CTC)/Battle Command Training
                        Program (BCTP)
        The CTC program is a primary culture driver for our Army.
    Additionally, our CTCs are a primary enabler of, and full participant
    in, the Joint National Training Capability. The CTCs develop self-aware
    and adaptive leaders and Soldiers and ready units for full spectrum,
    joint, interagency and multinational operations. CTCs continuously
    integrate operational lessons learned into the training. Our Army
    enhances the training experience offered by our CTCs (National Training
    Center in California, Joint Readiness Training Center in Louisiana,
    Combat Maneuver Training Center in Germany and Battle Command Training
    Program based in Kansas) by increasing the focus on development of
    capabilities essential to joint operations. Leader training and
    development during CTC exercises hone the Joint and Expeditionary
    Mindset and promote our Army's warrior culture.

    Provide Relevant and Ready Land Power Capabilities to the Combatant
            Commander and the Joint Team
        To meet global commitments across the full spectrum of military
    operations, our Army has mobilized more than 164,000 Reserve Component
    Soldiers. More than 325,000 American Soldiers are serving overseas and
    more than 23,000 Soldiers are supporting operations within the United
    States. This high operating tempo is no longer an exception. Sustained
    operations and deployments will be the norm for our Army forces
    supporting multiple and simultaneous shaping and stability operations
    around the globe. At the same time, we will continue to contribute to
    Joint Force execution of major combat operations, homeland security
    missions and strategic deterrence.

                Army Global Commitments
        Our Army is engaged in more than 120 countries throughout the
    world. To highlight our Army's commitment, a review of the major
    warfighting formations of the Active and Reserve Component serves as a
    measurable benchmark. Over 24 of the Army's 33 Active Component Brigade
    Combat Teams (BCTs), and five of our 15 Reserve Component Enhanced
    Separate Brigades (ESB) were deployed in fiscal year 2003. This trend
    will continue in fiscal year 2004, with 26 of 33 Active Component BCTs
    and six of our 15 Reserve Component ESB brigades projected for
    deployment.
        The majority of these combat formations are deployed in the U.S.
    Central Command area of responsibility (AOR), effectively executing
    stability and support operations. More than 153,000 Soldiers are
    supporting CENTCOM operations in Iraq, Afghanistan, Kuwait and the Horn
    of Africa. We are currently in the middle of the largest movement of
    troops since WWII, as we rotate more than eight-and-a-half divisions
    and two ESBs to or from the theater. The approximate ratio of Active to
    Reserve Component forces today is currently 63 to 37 percent,
    respectively. Once our current rotation is complete, the ratio will
    change to approximately 54 to 46 percent, Active to Reserve Component.
    Since September 11, we have mobilized almost half of the Reserve
    Component. They are trained, professional, and ready to execute any
    task.
        Army support to other Combatant Commanders remains high. U.S.
    Northern Command's Army component, U.S. Army Forces Command, provides
    more than 23,000 Active and Reserve Component Soldiers for duty in the
    defense of our homeland. These troops are available for missions
    including Military Assistance to Civil Authorities (MACA), emergency
    preparedness, and anti-terrorist operations. The Army Reserve provides
    to NORTHCOM significant voice and data connectivity necessary to
    execute real-time operations. U.S. European Command provides forces,
    such as V U.S. Corps, to CENTCOM; and to Stability Force (SFOR) and
    Kosovo Force (KFOR) in the Balkans. U.S. Pacific Command supports
    ongoing operations in the Philippines, as part of the Global War on
    Terrorism, in addition to maintaining more than 31,000 Soldiers on the
    Korean Peninsula. U.S. Southern Command is fully engaged as the
    headquarters for 1,500 Soldiers executing detainee operations at
    Guantanamo Bay, Cuba; has deployed 740 Soldiers to Joint Task Force--
    Bravo at Soto Cano Airbase, Honduras; and is assisting the government
    of Colombia in its war on narco-terrorism. U.S. Special Operations
    Command's Army component provides professional, dedicated, and
    specially trained Soldiers to each Combatant Commander. These Soldiers,
    working closely with conventional forces, have been instrumental to our
    success in the Global War on Terrorism.
        In addition to federal missions, our Army National Guard (ARNG)
    plays an important domestic role, routinely responding to state
    emergencies. In fiscal year 2003, there were 280 requests for emergency
    support, ranging from basic human needs to engineering support during
    natural disasters. Our ARNG has fielded 32 Weapons of Mass Destruction
    (WMD) Civil Support Teams (CST), which assist first responders in the
    event of an incident. Another 12 CSTs are due to be activated within 18
    months. To date, these teams have responded to 74 different requests
    for support. Also, more than 8,000 ARNG Soldiers have executed critical
    force protection duties at 148 Air Force installations in CONUS.

                Resetting the Force
        The extraordinary demands major combat and stability operations in
    Afghanistan and Iraq are placing on our equipment and personnel require
    that our Army quickly reset returning units for future national
    security needs. The reset program will incorporate lessons learned from
    OIF and OEF, retrain essential tasks, adjust pre-positioned stocks of
    equipment and ammunition, and bring unit equipment readiness back to
    standard. The objective is to ensure our Army forces are ready to
    respond to near-term emerging threats and contingencies. However, reset
    cannot be viewed as a one-time event. Reset will continue to be key to
    our future readiness as our military executes our National Security
    missions.
        Through reset, all returning active duty and Army Reserve units
    will achieve a sufficient level of combat readiness within six to eight
    months of their arrival at home station. The Army National Guard will
    take longer to achieve the desired level of readiness. The goal for
    these units is to reestablish pre-deployment readiness within one year.
    Our Army also will take advantage of reset as an opportunity to
    reorganize units into modular designs that are more responsive to
    regional Combatant Commanders' needs; that better employ joint
    capabilities; that reduce deployment time; and that fight as self-
    contained units in non-linear, non-contiguous battlespaces. This effort
    began with the 3rd Infantry Division and will soon be expanded to
    include the 101st Airborne Division (Air Assault).
        In addition to investing in new equipment to replace items that
    were destroyed or worn out during combat and stability operations, the
    reset program will repair major items used in OIF and OEF. Repair
    requirements have been determined for all OIF1 units and the workload
    for this comprehensive effort is immense: about 1,000 aviation systems;
    124,400 communications and electronics systems; 5,700 combat/tracked
    vehicles; 45,700 wheeled vehicles; 1,400 missile systems; nine Patriot
    battalions; and approximately 232,200 items from various other systems.
    This effort represents a significant expansion of normal maintenance
    activities, requiring the increased use of CONUS and OCONUS based
    depot, installation and commercial repair facilities.
        Reconfiguring existing Army pre-positioned stocks for global
    coverage of potential missions is a major component of the reset
    process. The intent is for each stock to have sufficient combat power
    to meet the immediate threat, as well as enough materials to render
    relief in other contingencies.
        Congressional support, in the form of supplemental appropriations,
    has been invaluable in beginning the reset effort. Our readiness
    depends directly on the successful execution of the reset program, and
    it will remain an ongoing priority for the foreseeable future.
    Continued resourcing will be needed to ensure that our Army can fight
    the current war and posture itself for future missions.

                Transformation: Moving From the Current to the Future Force
        The goals of Army Transformation are to provide relevant and ready
    forces that are organized, trained and equipped for full-spectrum
    joint, interagency and multi-national operations and to support Future
    Force development. Army Transformation occurs within the larger context
    of changes to the entire U.S. military. To support our Army staff in
    the execution of transformation, the Army leadership directed the
    establishment of an Army Training and Doctrine Command (TRADOC) Futures
    Center, operational as of October 2003.
        Our Current Force is organized, trained and equipped to conduct
    operations as part of the Joint Force. It provides the requisite
    decisive land power capabilities that the Joint Force commander needs
    across the range of military operations: support to civil authorities
    at home and abroad; expeditionary forces; the ability to reassure
    friends, allies and multinational partners; dissuading and deterring
    adversaries; decisively defeating adversaries should deterrence fail;
    and winning the peace as part of an integrated, inter-agency, post-
    conflict effort.
        Our Future Force is the operational force the Army continuously
    seeks to become. Informed by National Security and Department of
    Defense guidance, it is a strategically responsive, networked,
    precision capabilities-based maneuver force that is dominant across the
    range of military operations envisioned for the future global security
    environment.
        As our Army develops the Future Force, it simultaneously is
    accelerating select future doctrine, organization, training, materiel,
    leadership, personnel, and facilities (DOTMLPF) capabilities into our
    Current Force. This process will be fundamental to our success in
    enhancing the relevance and readiness of our Army and prosecuting the
    Global War on Terrorism. Similarly, the operational experience of our
    Current Force directly informs the pursuit of Future Force
    capabilities.

                Balancing Current and Future Readiness
        Balancing risk between current and future readiness remains a
    critical part of our Army's transformation process and one that
    requires continual assessment to ensure that plans and programs are
    aligned with overall requirements. Without question, the issue of
    current operational readiness is our Army's highest priority. During
    the past several years, our Army made a conscious decision to accept a
    reasonable degree of risk to the readiness of our Current Force in
    order to permit investment in capabilities for our Future Force. This
    risk came in the form of reductions in and limitations to modernization
    and recapitalization programs. As part of the past four budget
    submissions, our Army made difficult choices to cancel and restructure
    programs, shifting resources to the development of transformational
    capabilities. Some of these investments have already produced results:
    for example, the new Stryker Brigade Combat Team formations now being
    fielded, the first of which is currently deployed on the battlefield in
    Iraq. Others are helping to develop emerging technologies and
    capabilities that will be applied to our force throughout the coming
    decade.
        Besides the ongoing efforts related to equipping the Current Force,
    our Army also has begun other major initiatives that will improve our
    readiness and relevance in the future. These include an effort to
    realign Active and Reserve Component units and capabilities, in order
    to make our Army more readily deployable and available to Joint Force
    Commanders; home-basing and Unit Focused Stability, which will improve
    readiness and reduce personnel turbulence; and the reorganization of
    Army units into more modular and capability-based organizations.
        While the previous decisions to accept reasonable risk in our
    Current Force were considered prudent at the time, the strategic and
    operational environment has significantly changed in light of the
    large-scale engagement of Army forces in Operation Iraqi Freedom and
    other expeditionary operations. Ever-changing demands on our force,
    coupled with our commitment to mitigating risk to our Soldiers, have
    necessitated re-examination and transformation of our Army's resource
    process and business practices (see Addendum H at www.Army.mil).

                Making the Resource Process More Responsive
        The resource process is our Army's center of gravity. Without the
    right people, the proper equipment, top-notch installations and
    adequate dollars to support all appropriately, our Army would not be
    able to fulfill its duty to our Nation.
        In order to maintain our premier warfighting capability, Army
    resource processes must be flexible, dynamic, transparent and
    responsive to both our requirements and those of the Joint Force. This
    is especially true in today's environment. We are at war against
    conventional and unconventional enemies, and simultaneously pursuing
    transformation. Our resource process must be transformed to allow us to
    keep pace with changes brought on by the enemy. Though we anticipate
    the battle against terrorism will last for years, possibly decades, we
    cannot program and budget in advance for that war. Our Army obviously
    cannot ignore our country's current security needs, yet it would be
    equally imprudent to deviate from the development and fielding of our
    Future Force. Balancing these requirements will be one of our toughest
    tasks.
        The GWOT requires a host of radical paradigm shifts in the way we
    view the face and nature of our global operating environment, as well
    as in the way that we conduct operations. Responsible yet creative
    stewardship of our resources will remain absolutely necessary. Internal
    controls must be tightened and waste eliminated; outsourcing non-core
    functions is still an important option. Risk will continue to be a
    factor and our resourcing decisions must take this into account.
        We must transform our resource processes and adjust our priorities
    to meet the challenge of the current strategic environment. Because we
    cannot mass-produce a volunteer Army, the retention of the right
    volunteer force is an imperative. This force is essential to the combat
    effectiveness of an increasingly complex and technologically
    sophisticated Army. We must refine and streamline the resource,
    acquisition, and fielding processes for equipment and supplies as we
    cannot make up for lost time in a crisis.

                Accelerated Acquisition and Fielding
        We have adapted and continue to improve our acquisition and
    fielding processes. In 2002, as Soldiers reported equipment shortages
    in Afghanistan and elsewhere, we implemented the Rapid Fielding
    Initiative (RFI) to ensure that all of our troops deploy with the
    latest available equipment. Equipment fielding schedules were revised
    to support unit rotation plans, and procurement and fielding cycles
    were radically compressed.
        In coordination with field commanders and our Soldiers, a list of
    more than 40 mission-essential items, including the Advanced Combat
    Helmet, close-combat optics, Global Positioning System receivers,
    Soldier intercoms and hydration systems, was identified for rapid
    fielding. Laying the foundation for acquisition transformation, RFI
    already has equipped nine brigade combat teams (BCTs). In fiscal year
    2004, RFI will upgrade a minimum of 18 BCTs and eight enhanced Separate
    Brigades, serving in OIF and OEF. Additionally, we are accelerating
    fielding of select future capabilities to our Current Force. These
    items include thermal weapon sights, enhanced night vision goggles,
    improved body armor, the Future Combat Rifle, and a new sniper rifle.
    Congressional support for regular budget and supplemental spending
    requests enables our Army to put this improved equipment in the hands
    of our Soldiers.
        With this support, our Army also has instituted a Rapid Equipping
    Force (REF) that works directly with operational commanders to find
    solutions to operational requirements. These solutions may be off-the-
    shelf or near-term developmental items that can be made quickly
    available. For example, the REF established a coordinated effort to
    supply U.S. Forces with immediate solutions to counter improvised
    explosive device (IED) threats. Currently, IED teams are on location
    providing expertise and material solutions, to safeguard our Soldiers.
    We are acting aggressively to improve the armor protection of our
    armored and light-skinned vehicles. Other recent examples of REF
    products are the Well-Cam and PackBots. The Well-Cam is a camera,
    attached to an Ethernet cable and a laptop, that enabled Soldiers in
    Afghanistan to search wells for weapons caches. PackBots are
    operational robots used to clear caves, buildings, and compounds so
    Soldiers are not unnecessarily put in harm's way.
        RFI and REF provide timely support to our relevant and ready forces
    and to the Combatant Commanders, and facilitate Army Transformation.

                Balancing Our Active and Reserve Component Force Structure
        Currently, neither our Active nor Reserve Component is optimized
    for today's rapid deployability requirements. We will continue ongoing
    efforts to restructure our forces in order to mitigate stress; to align
    better with the current and projected security environments; and to
    offer campaign-quality land power capabilities to the Combatant
    Commanders. By doing so, we will ensure that our Army provides the
    responsiveness and depth required to achieve strategic and operational
    objectives, while simultaneously defending our homeland.
        Our Army is restructuring and rebalancing more than 100,000
    positions in our Active and Reserve Component force structure. These
    conversions increase the Active Component capabilities available to
    support the first 30 days of a rapid response operation. In response to
    Secretary of Defense guidance, we have already completed approximately
    10,000 positions. For example, the Army National Guard provisionally
    organized 18 additional military police (MP) companies. Between fiscal
    year 2004 and fiscal year 2009, our Army will divest approximately
    19,500 positions of less frequently used Active and Reserve Component
    force structure to further resource critical high demand units such as
    military police, civil affairs, and special operations forces. We
    project that future rebalancing efforts will convert an additional
    80,000 positions of lower-priority force structure. Despite these
    changes, our Army will remain stressed to meet anticipated
    requirements. To ensure that our Army can fulfill its commitment to our
    Nation, we should have the force capability level required to
    facilitate rebalancing, resetting, restructuring, and transforming of
    the Army.
        Military-to-civilian conversions are another way to improve
    manpower efficiency. More military personnel will fill the operational
    force if they are moved out of positions that can be prudently
    performed by civilians. To improve the Army's ability to better support
    worldwide commitments, it is essential to start this process now.
        Our Reserve Component relies heavily on Full-Time-Support (FTS)
    personnel to sustain support of current contingencies while
    restructuring the force. FTS personnel perform the vital, day-to-day
    organizational, administrative, training and maintenance activities
    that ensure the highest level of Soldier and unit readiness. To
    guarantee that our Army's Reserve Component will continue to fulfill
    ever-increasing demands with trained and ready units, our Army plans to
    raise FTS authorizations by 15 percent, from the current level of
    71,928 to 85,840, by fiscal year 2012. In 2003, the Army Reserve began
    implementation of the Federal Reserve Restructuring Initiative. The
    goal is to better meet contingency requirements and to improve unit
    readiness.

                Achieving Greater Combat Capability With Modular,
                        Capabilities-based Unit Designs
        Modular units are interchangeable, scalable, and tailorable
    formations, which provide the Joint Force Commander with a
    strategically responsive force that greatly increases his ability to
    defeat any adversary. Modularity enables us to tailor our capabilities
    to the requirements of the situation and delivered at the right time
    and the right place. Modularity permits the Combatant Commander to
    optimize his warfighting tool set.
        Moving toward independent, echelon-above-brigade headquarters will
    enhance modularity. In accordance with our Unit of Employment (UE)
    construct, a UE will provide the command-and-control structure into
    which modular, capabilities-based Units of Action (UA) are organized to
    meet Combatant Commander requirements. These UAs will incorporate
    essential maintenance, intelligence, and communications functions
    previously provided by higher level organizations. Our UE headquarters,
    while able to accept joint capabilities such as a Standing Joint Force
    Headquarters element, will have an organic capability, depending on the
    contingency, to function as a Joint Task Force or Joint Force Land
    Component Command headquarters like we have already done in Afghanistan
    and Iraq.

                Force Stabilization
        The great demands placed on our Army have forced us to re-examine
    many of our long-standing personnel and basing practices. As a result,
    our Army is transitioning to an improved manning system, designed to
    augment unit readiness by increasing stability and predictability for
    commanders, Soldiers and families. Force Stabilization will allow
    Reserve Component Soldiers to plan for their deployments while
    supporting their civilian jobs and their community commitments. It
    places greater emphasis on building and sustaining cohesive,
    deployable, combat-ready forces for Combatant Commanders.
        The home-basing initiative keeps our Soldiers in their assignments
    at specific installations longer, thus reducing unit turbulence and
    increasing unit cohesion. Unit Focused Stability synchronizes our
    Soldiers' assignments to their units' operational cycle, providing a
    more capable, deployable and prepared unit.

                Installations as Our Flagships
        Our installations are an essential component in maintaining the
    premier Army in the world. For the warfighter, installations are the
    platforms from which we project military power. Our installations
    perform the following key missions: (1) provide effective training
    facilities; (2) rapidly mobilize and deploy the force; (3) provide
    reachback capabilities; (4) sustain and reconstitute the force; and (5)
    care for our families. As power projection platforms, our installations
    must be equipped with a robust information infrastructure that gives
    the deployed commander quick and efficient reach-back capabilities. All
    of these missions help to maintain our Army's deployability and
    fighting edge.
        Historically, we have accepted risk in our infrastructure and
    installation services in order to maintain our current readiness. The
    cumulative effect on our installations is that commanders rate more
    than 50 percent of our facilities as ``adversely affecting mission and
    training requirements.'' We have adjusted our management processes to
    be more effective stewards of our resources. In 2002, we established
    the Installation Management Agency (IMA) to create a corporate-focused
    structure that provides efficient installation management worldwide.
    The IMA uses creative management programs to sustain quality
    installations and maintain the well-being of the entire Army family.
        The Installation Information Infrastructure Modernization Program
    (I\3\MP) enhances the installation's role in power projection and
    provides the architecture to address the essential reach-back
    requirement. Additionally, our Installation Sustainability Plan
    addresses ways to fulfill environmental requirements without impacting
    current or future training. Other important progress include
    modernization of barracks and housing; a Residential Communities
    Initiative; and divestiture of redundant facilities infrastructure and
    non-core utility systems through privatization.
        In the past few years, the administration and Congress have helped
    us to begin addressing our infrastructure challenges. We requested 94
    percent of funding required for sustainment of installations in fiscal
    year 2004. We have made progress in improving our installations by
    adjusting existing programs and developing new management strategies.
    However, there is much still left to do in order to upgrade our
    installations to better support the mission, Soldiers, and our
    families.

                Army Families and Well Being
        People are the heart and soul of the Army--Soldiers, civilians,
    family members, and retirees. Our readiness is inextricably linked to
    the well being of our people. The Army Family, for both the Active and
    Reserve Component, is a force multiplier and provides the foundation to
    sustain our warrior culture. We have placed significant emphasis on our
    Reserve Component this year in recognition of their contributions to
    the Global War on Terrorism. With the help of the administration and
    Congress, many improvements have been made including the retention and
    increase of Imminent Danger Pay, Family Separation Allowance, and a
    sizable pay raise. Other key well-being initiatives include the Spousal
    Employment Partnership, new TRICARE policies for the reserve
    components, and improvements in barracks and family housing. For more
    information on other Army well-being initiatives, see Addendum D
    (available at www.Army.mil)

                Introducing New Capabilities Into Current Force
        While at war, the urgency to accelerate the development and
    fielding of new and enhanced capabilities to our fighting forces in the
    field has never been greater. Our Army is making significant strides in
    this regard with the employment of a new brigade combat team
    organization, equipped with the latest available technology, to provide
    the Combatant Commander with enhanced warfighting capabilities. The
    rapid fielding of the Stryker vehicle demonstrates our Army's ability
    to use the acquisition and resource processes to meet a Combatant
    Commander's urgent needs.

                    Stryker Brigade Combat Team (SBCT)
        In 2003, our Army deployed our first SBCT, the 3rd Brigade, 2nd
    Infantry Division, to Operation Iraqi Freedom, delivering its enhanced
    capability to the Joint Force in record time: four years from broad
    concept to deployment. Exceptional support from Congress and the Office
    of the Secretary of Defense, along with close collaboration between the
    Army and industry, made this achievement possible.
        Stryker brigades are our Army's first truly network-centric force,
    filling the capability gap between light- and heavy-force units with an
    infantry-rich, mobile force that is strategically responsive,
    tactically agile, and more lethal. Improved battlespace awareness and
    battle-command technologies embedded in our SBCTs enhance combat
    effectiveness and survivability by integrating data from manned and
    unmanned air and ground-based sensors and providing real-time,
    continuous situational understanding. Planned enhancements will
    incorporate still-developing technologies. Significantly, our SBCTs
    will improve our Army's understanding of Future Force processes,
    helping us to formulate an advanced warfighting doctrine that will
    serve as an important bridge to the development of our Unit of Action,
    the structural foundation of our Future Force.
        This spring, our second SBCT at Fort Lewis, Washington, will become
    operational. Our third SBCT, in Alaska, will be available in 2005.
    Continued OSD and congressional support will ensure that subsequent
    brigades in Hawaii, Louisiana, and Pennsylvania, are fielded between
    2004 and 2008.

                    Future Capabilities
        Our Army plans to field a number of systems this decade that will
    provide a foundation for informing the transformation of our Current
    Force capabilities into those needed by our Future Force. Once fielded,
    these systems will perform as interdependent systems of systems and
    will greatly enhance joint warfighting capabilities. Our future
    capabilities programs are designed to enhance the campaign-quality
    land-power capabilities that we provide to the Combatant Commanders.
    Our programs undergo continuous reviews to ensure they meet the
    capability requirements of the Joint Force. When required, we
    restructure programs, revise requirements and reprogram resources. The
    following are just a few of the key transformational systems our Army
    will begin to field during the next six years:
        The Network.--Our Future Force situational dominance will depend
    upon a comprehensive, ubiquitous, and joint-interoperable Command,
    Control, Communications, Computers, Intelligence, Surveillance, and
    Reconnaissance (C\4\ISR) architecture (the Network) that enables the
    Joint Force Commander to conduct fully interdependent and network-
    centric warfare. The Network will provide the backbone of our Future
    Force and the future Joint Force, enabling the maneuver commander to
    effectively coordinate battlefield effects. Some of the more important
    systems within our Network include:
      --Warfighter Information Network--Tactical (WIN-T).--WIN-T will be
            the communications network of our Future Force, optimized for
            offensive and joint operations, while providing the Combatant
            Commander the capability to perform multiple missions
            simultaneously.
      --Joint Tactical Radio System (JTRS).--JTRS is a family of common,
            software-defined, programmable radios that will become our
            Army's primary tactical radio for mobile communications.
      --Distributed Common Ground System--Army (DCGS-A).--DCGS-A is a
            single, integrated, ground-based, ISR processing system
            composed of joint, common hardware and software components and
            is part of the DOD DCGS family of systems.
      --Aerial Common Sensor (ACS).--This ISR system and platform will use
            robust sensor-to-shooter and reach links, (such as DCGS-A
            ground stations), to provide commanders at every echelon the
            tailored, multi-sensor intelligence required for joint
            operations.
        Future Combat Systems (FCS).--By extending the network capabilities
    into the Unit of Action, the FCS provide a system of systems capability
    that was not previously available to Soldiers and commanders in joint
    operations. The core of our Future Force's maneuver Unit of Action is
    the Future Combat Systems, comprised of 18 manned and unmanned
    platforms that are centered around the Soldier and integrated within a
    C\4\ISR network. FCS will provide our Soldiers greatly enhanced
    situational awareness, enabling them to see first, understand first,
    act first and finish decisively. Our FCS platforms will offer the Joint
    Force networked, lethal direct fire; indirect fire; air defense;
    complementary non-lethal fires and effects; and troop transport
    capability. In May 2003, FCS moved, on schedule, into the System
    Development and Demonstration phase. Our Army is aggressively managing
    our FCS development effort and intends to achieve initial operational
    capability by the end of the decade.

                    Army Science and Technology
        The Army Science and Technology (S&T) Program provides our Army
    superiority in both human and materiel systems arenas--preventing
    technological surprise. The Army S&T program retains a dynamic
    portfolio of investments that are responsive to warfighter needs today
    and into the future. The priority for Army S&T is to pursue paradigm-
    shifting technologies that can alter the nature of the military
    competition to our advantage in the future and, where feasible, to
    exploit opportunities to accelerate the transition of proven
    technologies to our Current Force.
        The Army S&T program exploits technology developments from the
    other services, defense agencies and commercial industry as well as
    international communities. The S&T program focuses on technology
    relevant to our Army and joint capabilities. It synchronizes
    operational concepts development and acquisition programs through
    transformational business practices that speed technology fielding to
    the Soldier. The Army's S&T program is balanced to satisfy the high
    payoff needs of the future force while seeking rapid transitions for
    critical capabilities to our Current Force.

                Joint Operational Concepts (JOPSC)
        The Joint Force has transitioned from independent, de-conflicted
    operations to sustained interoperability. It must now shift rapidly to
    joint interdependence. To that end, we are reviewing training
    requirements, traditional relationships and developmental and
    institutional programs. This process includes ensuring that our
    operational concepts are nested inside those employed by the Joint
    Force. The concepts and initiatives listed below discuss particular
    Army emphasis areas; these areas are not all-inclusive. Functional
    concepts and other Army initiatives that support the JOpsC are
    discussed in detail in Addendum J (available at www.Army.mil).

                    Actionable Intelligence
        Our Army also is focused on attaining actionable intelligence--
    intelligence that provides situational understanding to commanders and
    Soldiers with the speed, accuracy and confidence necessary to influence
    favorably current and future operations. Actionable intelligence
    achieves its intended purpose of empowering greater individual
    initiative and self-synchronization among tactical units by fusing
    information across organizations and echelons--accelerating the speed
    of decision-making and the agility of operations.

                    Focused Logistics
        Our Army's current actions around the world in support of the
    Global War on Terrorism present a view of future military operations
    and provide valuable insights as we transform our logistics systems
    from the Current to the Future Force. The successes enjoyed during OIF
    were the result of the integrated logistics team of Soldiers, civilians
    and contractors, all of whom developed innovative solutions to a range
    of challenges caused by four major capability gaps in the current
    logistics system. To sustain combat power, our Army must have the
    ability to ``see the requirements'' on-demand through a logistics data
    network. We require a responsive distribution system, enabled by in-
    transit and total-asset visibility and managed by a single owner who
    has positive end-to-end control in the theater. Our Army needs a
    robust, modular, force-reception capability--a dedicated and trained
    organization able to quickly open a theater and support continuous
    sustainment throughout the joint operations area. Lastly, we need an
    integrated supply chain that has a single proponent, who can reach
    across the breadth and depth of resources in a joint, interagency and
    multinational theater. As we move from the Current Force to the Future
    Force, we will build confidence in the minds of the Combatant
    Commanders by delivering sustainment on time, every time.

                           A COMMITMENT TO OUR NATION

        Our Nation and our Army are engaged in a Global War on Terrorism--a
    war of survival against an insidious and cruel enemy that threatens our
    civilization and our way of life. This enemy is actively targeting the
    interests of America and our allies, both within our own country and
    abroad.
        Defeating this enemy requires the continued, strong support of our
    Nation. The steadfastness of our Nation in this effort is readily
    apparent. Ordinary Americans are doing their part and will continue to
    do so. Congressional support for our troops has been critical to our
    success. The industrial base also has responded, accelerating
    production of items essential to our Soldiers' protection and
    warfighting ability.
        Our Army, too, remains committed to its heritage of preserving
    freedom. American Soldiers display unrelenting tenacity, steadfast
    purpose, quiet confidence and selfless heroism. For America to survive
    and flourish throughout the 21st Century, our Army must defeat
    decisively the threats that challenge us today. To accomplish this
    essential task, we must recognize some important truths.
      --The fight against terror will be a long one.
      --Our Army must simultaneously deter aggression, defeat the forces of
            international terrorism, and maintain our campaign qualities.
      --We must continue to modernize to meet the challenges of our future.
      --Our operational tempo is high and will remain so.
      --Sustained operations and deployments will be the norm for our
            Soldiers--NOT the exception.
      --Old rules and operational methods may no longer apply; we will not
            achieve victory with a business-as-usual approach.
        Congressional backing for reset, our continued transformation to
    the Future Force, our rebalancing and restructuring of the Active and
    Reserve Component, and improvements to our installation infrastructure
    is essential to continued mission readiness. We fully appreciate the
    exceptional support Members and their staffs provided this past year.
    The support of the American people and their elected representatives in
    the United States Congress is essential.
        Our Army's commitment to the future is certain. We will continue to
    provide our Nation, the President, the Secretary of Defense and the
    Combatant Commanders a unique set of core competencies and
    capabilities. We remain dedicated to training and equipping our
    Soldiers and growing leaders. We will continue to deliver relevant and
    ready land power to the Combatant Commanders and the Joint Force. We
    will protect our country and our way of life as we have for 228 years.
    It is our privilege, our duty, and our honor to do so.

        Senator Stevens. Our co-chairman has arrived. Senator
    Inouye, do you have an opening statement?

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Thank you very much, Mr. Chairman. I do,
    and I ask that my full statement be made part of the record.
    But before I do, I would like to join you in welcoming General
    Schoomaker and the Secretary of the Army, because this is their
    first time before us. I can assure you that it will be--I will
    not say a happy time, but we are good people.
        I would like to join my chairman in expressing our
    admiration and our gratitude to the men and women who have
    stood in harm's way in our behalf since 9/11. I commend
    everyone who has played an important role in these operations.
    Time and time again, the extraordinary ability of our men and
    women in uniform and all the people who work to support them
    has been demonstrated. I can speak for everyone here: We are
    extremely proud of our fellow Americans.
        Thank you very much, sir.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Secretary Brownlee and General Peter J. Schoomaker, I would
    like to welcome you both for your first appearance before this
    subcommittee. It is an honor to have you here and I look
    forward to your testimony.
        It has been over two years since the United States
    responded to the 9/11 attack with the Global War on Terrorism.
    I commend everyone that has played a role in these operations.
    Time and time again, the extraordinary ability of our men and
    women in uniform and all the people that work to support them
    has been demonstrated.
        However, these ongoing operations have strained our troops.
    Numerous concerns such as recruiting and retention, and force
    structure requirements have been raised in Congress and by our
    military forces in the field.
        I suspect that these concerns will again be the subject of
    debate in Congress, as they are continually brought up by
    service members, their families, and the public. With ongoing
    operations for the Global War on Terrorism and our struggling
    effort to fund domestic priorities as well, this Committee has
    a very difficult road ahead.
        I am pleased that the Army is responding to the stress of
    overseas deployments by temporarily increasing end strength by
    30,000. Last year during the fiscal year 2004 Army budget
    hearing, this subcommittee raised the subject of Army end
    strength. General Shinseki testified that the requirements of
    the Army demanded a change in right-sizing and right-mixing the
    Army between Active and Reserve components. General Schoomaker,
    I commend you for responding to this issue.
        I look forward to discussing the details of this plan, its
    funding and what you see as the long term future of Army force
    structure.
        I would also be interested to learn how you plan to ramp up
    and then decrease the force within a few short years.
        Part of the strain on our forces has led to our concern
    over recruiting and retention, especially for the Guard and
    Reserve. Ongoing deployments and the use of stop loss have
    placed enormous demands on our military personnel and their
    families.
        I understand the Army is currently meeting goals for the
    active component but is slightly short on the reserve
    component. I would like to know your plan to address these
    concerns this year and in fiscal year 2005.
        The Army faces an unknown future, largely depending on how
    things progress in Afghanistan and Iraq. Your task is to plan
    for a schedule that is as yet undetermined, while working to
    reset the force for another contingency.
        To complicate this further, this will take place within the
    constraints of a difficult fiscal year and with supplemental
    funds coming later than you might hope.
        Gentlemen, I must say the challenges facing you are great,
    but I have every confidence in your ability to succeed.
    Secretary Brownlee, General Peter J. Schoomaker, I look forward
    to exploring these issues today and hearing your responses.

        Senator Stevens. Thank you, Senator.
        General Schoomaker, do you have a comment to make?
        General Schoomaker. Sir, I would like to make just a few
    brief comments if I might. Chairman Stevens, Senator Inouye:
    thank you very much for the opportunity to join Secretary
    Brownlee before you today and talk about our great Army.
        I would like to reciprocate and recognize the great service
    of Secretary Brownlee as Acting Secretary of the Army. He had a
    very distinguished military career of his own--two tours in
    Vietnam, wounded, recognized and awarded for valor on the
    battlefield, and of course you are all aware that he also
    served with distinction here as a staffer in this body, in the
    Senate. He certainly is a great partner as we go forward with
    the great challenges that we have before us, as we transform
    the Army while we are engaged in the global war on terrorism
    and engaged all over the world.
        I would also like to recognize Lieutenant General Ron
    Helmly with us today from the--he heads the U.S. Army Reserve;
    and Lieutenant General Roger Schultz, to my left rear, who
    heads the Army National Guard. We are one, we are a total Army,
    we are together. There is no daylight between us in what we are
    trying to achieve here, and I think you will see as we talk
    about what we are doing that we are approaching this as a
    unified body moving forward to the 21st century.
        I would also like to recognize the great pride I have in
    being able to serve once again in uniform with the men and
    women of the United States Army, and this includes their
    families, it includes the great civilians that we have, that do
    so much to support our Army at war.
        Finally, I would like to reinforce something that Secretary
    Brownlee has said, and that is that we are moving out with a
    great deal of vigor and momentum and we are trying to take
    advantage of the silver lining in this cloud of worldwide
    operations and being at war. We are trying to transform the
    Army using the momentum of the Army as we reset for continuous
    operations, that we do not reset it to the Army it was before,
    but we reset it to the Army of the future.
        We see this as an extraordinary window of opportunity, to
    take advantage not only of the great resources that this
    Congress and this committee has provided to our Army, but also
    take advantage of the motion that the Army is in. It is a
    narrow window of opportunity and perhaps one of my greatest
    fears is that we do not take full opportunity here of this
    window and allow ourselves to come to rest and not complete the
    transformation that we feel is so necessary.
        We have taken some extraordinary steps and one of them, of
    course, is as we looked at Army aviation we found a solution in
    the fact of terminating Comanche. I can assure you we did not
    start out with an attitude to terminate Comanche, but it made
    such sense from a business position as being a fiscally
    responsible thing to do, and also that the operational traits
    made so much sense.
        I would ask your support for these kinds of initiatives to
    ensure that the commitment that we were able to obtain from the
    Secretary of Defense, from the White House, and from the Office
    of Management and Budget (OMB) that these resources would be
    committed to fixing Army aviation as we do it. I would tell you
    that in this particular case it is not just the extraordinary
    number of helicopters we are going to buy and the amount of
    upgrades and modernization that we are going to do with our
    existing fleet, but it also includes the military construction
    (MILCON), it includes fixing the ammunition like rockets and
    the Hellfire issue, which is a great concern to me, the
    simulators, the training base, the unmanned aerial vehicles
    (UAV's), and the future tech base for a future joint rotorcraft
    solution for 2020-2025.
        So it is a far-reaching approach that we are taking, and I
    would very much appreciate your support with this, because I
    know that there is a great deal of interest in how we are going
    to accomplish all of this.
        Having said that, sir, I stand with the Secretary of the
    Army here in his statement and we have submitted our posture
    statement for the record, and I look forward to your questions.
    Thank you.
        Senator Stevens. Well, thank you very much.
        We anticipate approximately 10 members coming to join in
    this hearing, so unless there is objection we will limit the
    original round to 5 minutes apiece.
        I want to start off by congratulating the two of you for
    the Comanche decision. This committee had to make a decision
    once before, a similar decision on the Sergeant York. You have
    made the decision I think clearly and with a succinct
    statement, so from my point of view I intend to support your
    efforts and will honor the commitments that have been made that
    the funds that will be redirected from the Comanche will stay
    within Army aviation, where the need is very great.
        But can you tell us, is there going to be a gap now in Army
    helicopter procurement because of this?
        General Schoomaker. Sir, the answer is no. In fact, as you
    know, we were not going to achieve delivery of Comanche until
    later within this future years defense program. There were 121
    Comanches in the program at the time. The counterbalance is
    that we are going to be significantly upgrading the current
    fleet, bringing for instance Apache up to Block 3, which gives
    us the same capability, with the exception of low
    observability, as Comanche Block 1 was going to provide us.
        What in effect we are doing, I believe we will achieve a
    greater industrial base capacity that in effect is going to
    give us very positive results on our readiness in the aviation
    fleet. So we see this as a win-win situation all the way across
    and I think it will give us immediate assistance here in
    maintaining the readiness of our aviation.
        Senator Stevens. Well, I am going to ask your cooperation
    by having a classified session on the total subject of the
    helicopter transition at a later date, because I think some of
    the questions might not be appropriate in an open session.

                               ARMY END STRENGTH

        We discussed informally the question of what is going to
    happen to the increased strength you have now and your plans
    for forming separate brigades from those and transitioning them
    into the regular Army as you downsize other units. Could you
    explain that for us here this morning?
        Mr. Brownlee. Sir, I might let Pete start out with what we
    need to do and then I could pick up and explain some of the how
    for that.
        Senator Stevens. Yes, please.
        General Schoomaker. Sir, thank you very much. This is a
    total Army switch to modularity, and what we are talking about
    doing is maintaining 10 divisions on the Active Force and 8
    divisions in the National Guard, for a total of 18 division
    battle command headquarters. We then want to expand the number
    of brigades. On the Active Army side we want to go from 33
    active brigades that we currently have to a minimum of 43. That
    is an increase of 30 percent, with the possibility of going to
    48. We have an off-ramp at 2006 to make that decision, to see
    how we are doing and what the affordability is.
        But we believe that by going from 33 to 43 brigades, which
    is the equivalent of almost 3 divisions of fighting strength
    within the 10-division formation, that it will help us greatly.
        At the same time, we are going to be transforming the Army
    National Guard under its 8 division headquarters to 34 brigade-
    sized units. This in effect gives us an Army of somewhere
    between 77 and 82 brigade combat teams, which is in fact the
    answer to relieving the stress to the force. This gives us a
    broader base, that we get greater dwell time between
    deployments and rotations. We believe that we can do this
    within the current authorized statutory end strength numbers.
        We have asked for a temporary growth, not in statutory end
    strength, but a temporary growth in the Army under the
    authorities that the President has in Title 10, that the law
    gives him, for us not to use stop-loss, stop-move to grow the
    Army, but to actually be able to recruit, train, and organize
    through the pipeline on a temporary basis this additional
    30,000 soldiers to create these brigades.
        Simultaneously, we believe that we can find efficiencies
    through some of the global force reposturing, military to
    civilian conversions, and other efficiencies that we have had
    that will offset that temporary growth so that we can let the
    air out of the tires and come back down to our end strength,
    retaining the brigades that we form.
        I will let Secretary Brownlee discuss the specifics of
    that.
        Mr. Brownlee. Sir, I know there has been some discussion
    over here about how we had proposed this. When we look
    carefully at what we need to do and the authority to do it,
    there clearly is an authority that the Congress intended for
    peacetime, which was authorized end strength. There is another
    authority in Title 10 that allows the President to waive the
    requirements of the end strength and grow the force to whatever
    is necessary to deal with the emergency.
        Since the President had declared an emergency, we looked
    and we were already some 20,000 people over our authorized end
    strength under this Title 10 authority. We then asked
    ourselves: Well, how are we paying for that additional end
    strength? We were in fact paying for it with the supplemental
    appropriations provided by the Congress for those purposes.
        So what we have proposed is to allow us, as Pete described,
    to grow by up to 30,000 over the next several years and to use
    this to create these new brigades. It gives us additional head
    space to do some of the efficiencies that will be very
    difficult or impossible to do if we did not have this extra
    growth and flexibility.
        During this period of time our strategy is to find within
    the Army these 30,000 spaces. So at the end of the conflict,
    whenever that is, and as Pete says when the conflict comes down
    and we let the air out of the tires, we can keep those
    brigades, but at the authorized end strength we currently have.
    That is our plan, that is our strategy.
        As we looked at this, it was clearly better for us because
    if we had to put this in our budget request and ask you to
    increase our authorized end strength by 30,000 people, it is
    about $1.2 billion per 10,000, so that is about $3.6 billion we
    would have to put in our budget and knock out other programs to
    pay for it. We then have to go through our future years defense
    plan and knock it out every year in there also. So we would be
    taking that out of programs that we are very interested in and
    you have helped us greatly with to modernize the Army.
        In fact, I know because I worked here and deal with some of
    the same problems you do, if it were done over here, if you had
    to go into the budget and find $3.5 billion of military
    personnel money, that money pays out at a one for one rate over
    90 percent and most of the other accounts that you would
    actually be using as a source for funds pay out at a much lower
    rate. So you would have to take a much larger proportion out of
    those accounts to pay for these military personnel costs. You
    might have to find as much as $7 to $10 billion or even more
    out of these other accounts to pay for it.
        So as we looked at this, we thought it was clearly better
    for us and hopefully you would see it as better for the
    Congress in dealing with this situation.
        Senator Burns. Secretary Brownlee, can you turn your
    microphone on?
        Mr. Brownlee. I am sorry. I apologize, sir. I hope that
    came across.
        Senator Stevens. I just thought my ears were acting up
    again.
        Senator Burns. I thought I had gone deaf.
        Mr. Brownlee. Sir, as one with very bad ones I should know
    better. I apologize.
        Senator Stevens. Well, I appreciate that. I do hope we can
    keep the responses a little more succinct so that we can have
    more than one question per Senator.
        But one thing I failed to do--would you identify for the
    record the general officers that have come with you, General
    Schoomaker? I think sometimes we fail to recognize they are
    here for your support. So I would like to have in the record
    who is here.
        General Schoomaker. Sir, I recognized Lieutenant General
    Ron Helmly from the Army Reserve and Lieutenant General Roger
    Schultz on the far left from the Army National Guard. General
    Helmly is sitting right here in the middle. Lieutenant General
    Jerry Sinn, who is out of our budget office. He is our counsel
    on money, a very good one. And I think you know General Guy
    Swan behind us, who is our legislative liaison.
        Senator Stevens. Thank you very much.
        Senator Inouye.
        Senator Inouye. If I may follow up on the chairman's
    question, are the new brigades going to be a permanent part of
    the force?
        General Schoomaker. Yes, sir.
        Senator Inouye. I recall Dr. Zakheim indicated that these
    new brigades will be phased out after the war in Iraq. Is that
    correct?
        General Schoomaker. No, sir. The 30,000 temporary end
    strength will be phased out after the emergency and they will
    be offset by the efficiencies we find within our current
    statutory end strength during the period that we are doing this
    transformation.
        Senator Inouye. But not the new brigades?
        General Schoomaker. No, sir. They stay, they remain.

                            RECRUITING AND RETENTION

        Senator Inouye. Secretary and General, with the strain of
    our deployed forces there is some concern among many about
    recruiting and retaining, and I suppose that should be a
    concern of all of us. Are you confident that you can meet your
    goals without changing any standards in recruiting or
    retention?
        General Schoomaker. Yes, sir.
        Mr. Brownlee. Right now, sir, I would describe as
    cautiously optimistic where we are on all of this. We certainly
    are concerned within the Army because we do have a very high
    OPTEMPO. The Army is very busy. This impacts on soldiers and
    their families. Right now with respect to recruiting, we are
    confident that we are going to make our goals. We are running a
    little below the line in some of them, but for most of them it
    looks like we are going to make all our fiscal year 2004
    requirements.
        We have some concerns in retention in some spots, but in
    other areas we are doing very well. So we are going to
    concentrate on those. We have a lot of authority that has been
    provided by the Congress to take certain measures to allow us
    to provide incentives, which we will do when it appears time to
    do that. We have already used some of them on reenlistment
    bonuses and other authorities that have been provided for those
    things.
        General Schoomaker. Sir, I would like to add very briefly.
    We were extraordinarily successful last year in meeting over
    100 percent of our retention and recruiting goals across all
    components. This year it looks like we are on track right now
    to exceed 100 percent in recruiting across the components. We
    do have a few retention challenges, but everybody is very
    confident that we will make it.

                            BRIGADE UNITS OF ACTION

        But I would like to make a very strong comment here that we
    must relieve the stress on this force, and we believe our plan
    is designed to do that, because we cannot rely on this
    extraordinary level of commitment, sacrifice, and patriotism to
    carry us at the level that we are currently operating. That is
    why I feel it is so important that we use this extraordinary
    window of opportunity to transform this Army to a broader
    brigade base, to be able to achieve the kind of dwell time.
        We anticipate we will be able to create a force that will
    be able to sustain this level of effort we have today with an
    Active Force rotation scheme of 1 year in three and with the
    Reserve Components 1 year in five or six, which we think is
    sustainable.
        Senator Inouye. I realize that the matter of policy is not
    within your jurisdiction, but, like all of us, you read the
    papers, you receive briefings and such. And there are potential
    hot spots throughout the world--the Korean Peninsula,
    Indonesia, Malacca Straits, the Middle East, just to name a
    few, Pakistan, India. Are you considering expanding the
    military if we find ourselves having to involve ourselves in
    all these activities?
        Mr. Brownlee. Sir, as I indicated, the plans that we have
    within the Army are to increase the number of combat brigades.
    That will give us an additional capability in case we have to
    respond to something else. Our primary intent right now is, as
    General Schoomaker said, to relieve the stress, current stress
    on the force. If there is another emergency elsewhere, this
    clearly would give us more capability and flexibility in
    responding to that.
        General Schoomaker. I think again, just as a baseline,
    today we have 33 brigades in the Active Force and we have 15
    enhanced separate brigades in the National Guard that we
    consider available and ready to go in a rapid way. If we
    complete our transformation, we could have as many as 82
    brigades available to us in real combat power within our
    current statutory end strength.
        This is what this transformation has taken us to. It will
    be between 77 and 82 brigade combat teams across the Army
    active component and National Guard.
        Senator Inouye. You can have 82 brigades without changing
    the end strength?
        General Schoomaker. That is correct, sir.
        Senator Inouye. Thank you, sir.
        Senator Stevens. Senator Shelby.
        Senator Shelby. Thank you. Thank you, Mr. Chairman.

                                 ARMY AVIATION

        Secretary Brownlee, regarding the Comanche program, I
    believe that is the right way to go. What about the OSD and
    White House commitment here? Are they committed to Army
    aviation in the future, which I think is very important, that
    this savings be spent there. I think General Schoomaker
    referenced that clearly. Do you want to comment on that? Go
    ahead, General.
        General Schoomaker. I personally received the commitment of
    Deputy Secretary of Defense Wolfowitz. I met in the Oval Office
    with the President and achieved his commitment, and we met with
    Josh Bolton in OMB and received their concurrence and
    commitment that we would apply the Comanche program $14.6
    billion to Army aviation.
        Senator Shelby. It is very important to the future of the
    Army, is it not?
        General Schoomaker. Yes, sir.

                                     RESET

        Senator Shelby. The Army reset program, General Schoomaker.
    A lot of us are concerned about the health of the Army's combat
    equipment. We have talked about this before, especially combat
    vehicles, with what has been going on in Iraq. $1.5 billion was
    included in the supplemental last year for the Army depot
    maintenance. Yet we understand that the Army Tank and
    Automotive Command currently has a backlog of roughly the same
    amount.
        How much funding has the Army received from the 2004
    supplemental for reset? What is the readiness level of the
    units that have returned and units still deployed in Iraq?
        Mr. Brownlee. I want to do that for the record, provide for
    the record the exact amount of funding we received out of the
    supplemental for resetting the force. But we do have funds to
    recapitalize, reset, all of the major systems that we have
    brought back right now, I believe, and we are proceeding to do
    that.
        [The information follows:]

                                     Reset

        The fiscal year 2004 emergency supplemental funded $1.2
    billion in depot maintenance requirements and $2.0 billion in
    10/20 level maintenance and delayed desert damage.
    Additionally, we received another $208 million for
    transportation to move equipment to the depots and to
    commercialize some in-theater communications capability. This
    was particularly important in that it permitted us to redeploy
    several of the Army's unique communications units who were
    approaching their one-year mark for deployment. We also
    received $712 million in investment funds to purchase
    communications equipment, replacement stocks for our
    prepositioned equipment sets, and lethality and survivability
    equipment for both Active and Reserve Component Soldiers.

        Senator Shelby. But you have got to have sufficient
    resources to reset. General?
        General Schoomaker. Sir, you are exactly right. I am again,
    with the same people, both the Secretary and I are on the
    record. We are going to require supplemental funding to reset
    the Army 2 years beyond the end of this emergency, which is
    consistent with what it took us to reset the Army following
    Desert Shield/Desert Storm. We have over 9,000 pieces of
    rolling stock, 9,000 pieces of rolling stock that were used and
    consumed and require repair, just from the Operation Iraqi
    Freedom 1 (OIF-1), from the war.
        Senator Shelby. We have got to get that to the depots, have
    we not?
        General Schoomaker. Yes, sir. That is who is going to have
    to do this work. Some of it is going to have to be done
    forward, some of it is going to have to be done here.

                                CALIBRATION SETS

        Senator Shelby. General Schoomaker, regarding test,
    measurement and diagnostic equipment, not very much attention
    gets paid to test, measurement, and diagnostic equipment, but I
    would like to express concern about the Army's action in this
    bill to decrease the research, development, test and evaluation
    (RDT&E) funding for calibration sets equipment by 275 percent
    and to zero all procurement funding.
        The loss of this funding for calibration sets (CALSETS)
    2000 a lot of people believe negatively impacts two
    transformation imperatives that are important to you,
    modularity and commonality. Do you have enough calibration sets
    in the force to meet immediate requirements? In other words,
    what are we going to do here?
        General Schoomaker. Sir, I believe we do, but we would need
    to provide that for the record, unless the Secretary knows.
        [The information follows:]

                     Calibration Sets (CALSET) Requirements

        Army is meeting immediate critical calibration
    requirements; however, it is assuming some near and long term
    modernization risk. We are satisfying immediate critical
    requirements for CALSETS 2000. CALSETS 2000 is a modernized,
    tactical, deployable mobility platform with mounted calibration
    and repair capability. The current Army requirement for CALSETS
    2000 is 40: 29 tactical sets, six echelon above corps sets,
    three training base sets, and two sustaining base sets. To
    date, 20 CALSET 2000 systems have been procured. Without
    funding to procure additional sets, the military will continue
    to rely on a combination of CALSET 2000, and AN/GSM-286 and AN/
    GSM-287 tactical sets. The AN/GSM 286/287 sets have the same
    calibration capability, but do not meet mobility and
    survivability requirements.
        The Army is taking risk by not providing funds to modernize
    existing calibration equipment or to fill emerging calibration
    requirements gaps. The Deputy Chief of Staff, G4 is conducting
    a world wide mission assessment to determine how the Army will
    perform test, measurement, and diagnostic equipment (TMDE)
    calibration and repair support without an equipment acquisition
    program. The assessment focuses on risk mitigating solutions,
    including: deployable modular military support teams, contracts
    for calibration and repair support services, realignment of
    existing CALSETs sets into discrete missions and functions, a
    review of critical calibration standards and the systems they
    support, and the potential for creating a Joint Calibration and
    Repair support program. It will also address the legal
    liability associated with calibration, impacts of repair
    support to TMDE and review lessons learned and business cases
    used by commercial industry today.

                           FUTURE COMBAT SYSTEM (FCS)

        Senator Shelby. Okay. Future Combat Systems. Secretary
    Brownlee, how is the FCS-lead systems integrator (LSI) team
    performing? Is technology development where you want it to be?
        Mr. Brownlee. Sir, I get different reports from the people
    who are over watching that. They tell me that they are doing
    well. I have to tell you that I have had some concerns about
    that and so recently I wrote a letter to the Institute for
    Defense Analysis and asked them to please examine the LSI
    relationship between the Army and the LSI contractor and to
    provide that report to the Army, just to be sure that that
    relationship is working as we intended from an independent
    point of view. So we will get that and that should be done in
    several months.

                                    STRYKER

        Senator Shelby. Could you talk about the Stryker vehicle
    performance in this setting in Iraq?
        Mr. Brownlee. Yes, sir, I can, and I am sure Pete would
    like to add to whatever I might say. But we have been very
    pleased with the way it is performing in Iraq. We have had
    several vehicles that have been hit by rocket propelled
    grenades (RPG's) that have survived in the way we intended, and
    this is with an interim protective system, the slat armor that
    we put on it which was an interim protective system. So far
    that has worked as intended. The reports we get from the field
    are very good with respect to that vehicle and we are very
    pleased with it so far.
        Senator Shelby. General?
        General Schoomaker. Sir, I am very pleased with the way
    Stryker has performed, not only as a vehicle but as a system.
    The amount of infantry that is in Stryker is amazing and its
    lethality, its ability to network and move. As you know, we
    have just gotten our commitment and approval out of OSD to
    proceed with Stryker 5 and 6, so that completes Stryker. As we
    move forward----
        Senator Shelby. That is a good endorsement, too, is it not?
        General Schoomaker. Sir, it is. The improvements that are
    being made to Stryker along the lines of protection are
    significant. Currently it is the second best protected system
    that we have, second to the M-1 tank, and it will continue to
    improve. So we are very happy with what we see there.
        Senator Shelby. Mr. Chairman, we will get another round?
        Senator Stevens. Yes, we will.
        Following the early bird rule, next we recognize Senator
    Hutchison.
        Senator Hutchison. Thank you, Mr. Chairman.

                                   STOP LOSS

        You said--I think your concept is outstanding, and you said
    you were going to use stop-loss orders to keep the people as
    you are in your retraining process. How long do you anticipate
    those stop-loss orders will be?
        Mr. Brownlee. We only stop-loss units that are alerted to
    be deployed, units that are deployed, and units that have
    immediately returned from deployment. This is to, as General
    Schoomaker said, stabilize that force so that it stays
    together, trains as a team, deploys as a team and a unit, and
    fights that way.
        Senator Hutchison. And how long do you anticipate the stop-
    losses to last?
        General Schoomaker. We stop-loss from alert to up to 90 to
    120 days upon return. But you might have misunderstood me here.
    Our temporary end strength--our temporary growth that we have
    asked for above end strength is not stop-loss. We do not want
    to use stop-loss for that. We want to recruit and specifically
    target where those go.
        So we will continue to use stop-loss for those units that
    are specifically going to war, to hold them together, and we do
    that very carefully. I mean, we recognize what stop-loss is,
    but if you take a look at our other initiatives, which is force
    stabilization, as we move to modularity and stabilize the force
    it will reduce our requirement to have to use stop-loss.

                         RESERVE COMPONENT DEPLOYMENTS

        Senator Hutchison. I understand. Let me ask you this. Are
    you going to be able to show fairly quickly a relief to Guard
    and Reserve deployments?
        General Schoomaker. I think you know we have just alerted
    three more brigades and a division headquarters for OIF-3, and
    we have done it early to provide the predictability and the
    time so that people are not being rushed as has been necessary
    in the past. But again, the more of these brigades we can
    create on the active side--and that is why we have asked to do
    the 10 brigades in 3 years. We have already got one in the 3rd
    Infantry Division. They have already reset into a four-brigade
    division. We are going to do two more this year. We will do
    three or four next year and the residual three or four the
    third year.
        The faster we can achieve that, the less we are going to
    have to--the more relief we can give to calling the Guard, as
    long as we are at this level of effort. If this level of effort
    reduces, of course, the requirement for the National Guard will
    reduce commensurately.
        Senator Hutchison. Do you have a long-term goal on how long
    you would ask a member of the Guard and Reserve to activate
    during their time that they have signed up to serve?
        General Schoomaker. We are working very hard to reduce the
    amount of post-mobilization training requirements in the Guard.
    If we get into force stabilization and modularity, it will
    allow us to predict when we have to call--when a unit would be
    in the window of alert.
        Senator Hutchison. I understand that you are saying
    predictability is very important, and it is. But I am also
    visiting our Guard and Reserves in Kuwait, Afghanistan, Iraq,
    and at home, and part of their frustration, as you know, is
    overdeployment. It is not just being able to tell when they are
    going; it is going so much.
        General Schoomaker. The path to relieve their frustration
    is the faster that we can get to this level, it will increase
    the dwell time between deployments. As I said, we could get on
    the Active side one deployment in a 3-year cycle, on the Guard
    side we can get one deployment in a 5- or 6-year cycle in a
    predictable fashion. Our desire is to limit these deployments
    to 6-month deployments if we have to do it.
        Senator Hutchison. That is what I was after. Thank you very
    much.
        Senator Stevens. Senator Dorgan is recognized.
        Senator Dorgan. Mr. Chairman, thank you.

                  RESERVE COMPONENT RECRUITMENT AND RETENTION

        Secretary Brownlee and General Schoomaker, the National
    Guard and Reserve are being used in a manner that we had not
    previously anticipated. I think everyone agrees with that, and
    we have Guard and Reserve troops in Iraq that have now been
    mobilized for 13 months, away from homes, families, and jobs
    and who may not be back home until May. That was certainly not
    anticipated, and we have had long discussions about that.
        Let me ask, what is this doing to recruitment and
    retention? There has been some concern about recruitment and
    retention rates in the Guard and Reserve. Can you give me
    information about that? I see General Schultz is here and
    perhaps he has information about that as well.
        Mr. Brownlee. Sir, in the National Guard in fact our
    retention rates, I believe, are running over 100 percent right
    now. Reserves are a little bit below the glide path that we
    would desire. We believe we can get that up in order to meet
    our fiscal year 2004 goals.
        Senator Dorgan. At this point, then, you are not concerned
    about, based on your experience and also looking forward, you
    are not concerned that the increased deployments are going to
    affect recruitment and retention?
        Mr. Brownlee. Sir, I am always concerned, I very much am. I
    think this OPTEMPO certainly has human costs that we have to
    measure and what we have told the Army staff is we want to know
    when the light on the dashboard flickers amber so we can take
    measures and steps to try to get things under control. What we
    want to avoid is having people come in and tell us when every
    light on the dashboard is red and then we are in trouble.
        So that is the way we are trying to operate it. But I would
    not want to tell you we are not concerned. We are very
    concerned and that is one reason that we have come forth with
    the initiative to grow the size of the Army to reduce the
    stress.
        General Schoomaker. If I could, I may be the only person in
    the room that thinks it is extraordinary that we are calling
    the Guard and the Reserve. I think that is what we are for and
    I think that the Active, Guard, and Reserve are all volunteers.
    Now, what is disappointing is that we are working, of the
    million people we have in uniform, we are working too few of
    them too much. Part of what we have to do in our restructuring
    is distribute the load across the force, and that is what we
    are trying to do here.
        But the Guard right now is leading in both recruiting and
    retention in the Army, which is counterintuitive. But in fact--
    and I will let Roger verify, validate that.
        Senator Dorgan. The reason I ask the question is it is
    counterintuitive, you would think. And I think it is
    extraordinary, by the way. I would not necessarily agree with
    you.
        General Schoomaker. It is.
        Senator Dorgan. It is extraordinary that we would call up a
    unit and they are gone 17 months or in some cases close to 18
    months from family, home, and job, and in a couple of cases
    only 2 years following a deployment to Kosovo.
        I understand that is what the Guard and Reserve are for,
    but I think you have indicated in your testimony we need to be
    judicious about how often we deploy them and how long we deploy
    them, because they are citizen-soldiers.

                          SUPPLEMENTAL BUDGET REQUEST

        Let me ask a question. You have mentioned General Sinn and
    we are very proud of General Sinn in North Dakota. You
    indicated that he is keeping track of costs. I suspect that you
    are taking a look at what are the anticipated future costs here
    with respect to deployments and, for reasons that the chairman
    and others have discussed on the floor with me and others, that
    those costs are not included in the budget. But I would expect
    that we will then pass a supplemental. We passed a $60 billion
    supplemental for the military at the end of 2003 and we will do
    that again.
        But can you give us some sense of what kind of costs you
    are seeing and what kind of costs you are planning for that are
    not yet included in the budget, but that we will be confronted
    with with respect to a supplemental?
        Mr. Brownlee. Sir, the cost of the operations, if you count
    all the costs to include the personnel costs, which maybe
    should not be counted, but it runs for both Afghanistan and
    Iraq over $4 billion a month. Most of that would be covered, is
    covered now, by the supplemental that was previously passed.
    The Army got roughly $40 billion of I believe the $65.1 billion
    that was provided by the Congress for military operations and
    that is what we are using for that. We believe that certainly
    is adequate to take us to the end of this fiscal year.
        We may need some assistance from the administration,
    depending on whether the costs continue or increase. So that
    right now is where we see that.

                                  ADD-ON ARMOR

        Senator Dorgan. Let me ask--my time is about expired. I
    want to ask one additional question. The marines recently
    engaged in a contract to buy sets of what is called LAST
    ceramic armor for HMMWV's in Iraq. As I inquired about that, I
    understood the marines determined that the LAST armor is the
    quickest and most efficient way of protecting its vehicles,
    HMMWV's, after observing tests done by the Army.
        Does the Army have plans to proceed in a similar fashion?
    These are--apparently it is ceramic armor for the doors of
    HMMWV's that the marines observed in testing that the Army did,
    and they decided to proceed to purchase.
        Senator Stevens. Your time has expired, I hope that you
    realize.
        Senator Dorgan. I preceded my question by suggesting my
    time was about to expire. I finished my question and if they
    have time to answer I would appreciate that.
        Mr. Brownlee. Sir, if we could take that for the record. I
    would prefer not to address that in open session.
        Senator Dorgan. That would be fine. Thank you very much.
        [The information follows:]

                        Add-on Armor Kits for the HMMWV

        The Army did not purchase the LAST Armor produced by
    Foster-Miller Inc., in Waltham, Massachusetts because the
    ceramic did not address the holistic approach to HMMWV add-on
    armor protection that the Army desired. The LAST Armor, a
    ceramic armor plate, provides only partial door protection, has
    no back plate or perimeter protection. Also, the ceramic armor
    is very expensive: $600 per square foot as opposed to the
    Rolled Homogenous Armor (RHA), which is used in our Army
    Research Laboratories (ARL) add-on armor kits, at $15 per
    square foot. In October 2003, the LAST Armor was sent to the
    Army Test Center where the armor demonstrated reasonable
    protection against ballistic threats. But there were concerns
    about the robustness of the ceramic armor when it is attached
    to the vehicle. LAST Armor is mounted to the canvas door of a
    HMMWV with clips and Velcro, and cannot be expected to stop an
    improvised explosive device blast since the canvas door would
    likely dislodge, thereby creating an additional piece of
    fragmentation (door and armor plate) that can injure or
    mortally wound the Soldier.
        The Army has purchased 6,900 ARL add-on armor kits and
    1,500 O'Gara Hess add-on armor kits for HMMWVs. The Army kit
    provides door, perimeter, and back plate protection with
    ballistic glass and air conditioning. ARL's durable kit is
    composed of \3/8\ inch RHA and it takes approximately three
    hours to install all kit components. To date, 2,675 kits have
    been produced and 2,079 kits have been installed in theater.
    The U.S. Marine Corps is scheduled to receive 650 of these ARL
    add-on armor kits as well.
        The Army believes LAST Armor is a good commercial off-the-
    shelf force protection product for civilian and local law
    enforcement, but does not provide robust or extensive enough
    force protection for Soldiers deployed to Iraq and Afghanistan.

        Senator Stevens. Senator Cochran is recognized.
        Senator Cochran. Mr. Chairman, thank you.

                               ROTATION OF TROOPS

        General Schoomaker, I understand the Army is in the midst
    of one of the largest troop rotations in the history--well,
    since World War II anyway. You have pointed out that in this
    period of 4 months from December through April you will have
    110,000 troops deploying to the Iraq theater of operations and
    120,000 returning. That is quite a challenge. You have said we
    are entering the most challenging period for the Army since
    World War II.
        I wonder what you have done to help ensure the protection
    of those forces during the troop rotation and the logistical
    challenges that you face? Have you had enough equipment,
    airlift, sealift, support from the other forces or from the
    total force concept?
        General Schoomaker. Sir, it is a great question. We in fact
    are moving over 250,000 people in those 4 months. We are moving
    on average 5,000 people in and out every day. We have done very
    close work with Central Command, General Abizaid and his folks,
    to ensure the proper protection and operational security. All
    of the things that are required there are extraordinary, and
    the support we have had out of Transportation Command, General
    Handy and his folks, in managing this movement is
    extraordinary.
        What I find to be particularly extraordinary is we are
    right now at the very peak of this and it has been virtually
    seamless. It has been very, very well done. We are very proud
    of what the joint team has done to be able to pull this off,
    and we do not anticipate we will have any problems in the
    future because it is running very smoothly.

                     NATIONAL GUARD AVIATION MODERNIZATION

        Senator Cochran. We have a good number of reservists and
    guardsmen on duty around the world. I have been told that about
    40 percent of the force in Iraq is made up of reservists and
    National Guardsmen. I know we have 22 Guard and Reserve units
    represented from my State that are deployed to the theater.
        One of our groups represented over there is an Army
    National Guard aviation group from Tupelo, Mississippi. They
    fly helicopters, and when they were deployed they realized they
    had lost their helicopters to a Tennessee Guard unit that had
    gone on before them, and they were anticipating some
    replacement helicopters. But these are challenges that I know
    you are facing. They have been dispersed among some other
    units, so they can take advantage of their training and their
    capability of contributing to the mission there.
        But I am sure the aircraft distribution challenge is
    something that you are looking into and trying to manage as
    well. Do you have the replacement aircraft that you need,
    helicopters, for National Guard aviation units? Is there
    anything we can do in this budget cycle to help you overcome
    the deficits that you may face?
        Mr. Brownlee. Sir, I appreciate the question and I have
    looked into this. That unit of yours has performed remarkably,
    because we used them in a way that we would prefer not to. We
    had to use them almost as fillers for other units. That is part
    of our reorganization of the Reserve components that we are
    going to address.
        We have too much force structure for the number of people
    we have, so when we call a unit up we have to take people from
    other units to fill those units up. We want to reduce the
    number of units, but not reduce the number of people, so we can
    keep units filled. One point.
        The second point is, for the unit at Tupelo, they did lose
    their OH-58's, their Kiowas, to the Tennessee unit. Under the
    aviation plan that is being put together right now, it is yet
    undetermined whether they will receive Kiowa Warriors back in
    that unit or Apaches. But that decision should be made soon and
    we will make sure that you know as soon as we make that
    decision.
        General Schoomaker. I would like to just jump on that. You
    asked what can you do. Support the movement of the Comanche
    funding to the Army aviation modernization, because we are
    going to purchase 800 new aircraft and upgrade 1,400, and that
    is for the Active, Guard and Reserve. It makes the Guard and
    Reserve well in aviation, and that was a significant factor in
    making the decision to go this direction.

                       ARMORING BRADLEY FIGHTING VEHICLES

        Senator Cochran. In connection with force protection, we
    heard about the upgrading of the armor for HMMWV's. Is there a
    similar program underway for the Bradley fighting vehicles?
        Mr. Brownlee. Sir, the Bradley fighting vehicles can be
    equipped with what we call reactive armor. We have some
    reactive armor sets. We do not have enough for every Bradley in
    theater, but the Bradley of course has the kinds of ballistic
    protection already inherent in its organic armor up and beyond
    that that the up-armored HMMWV would have. The reactive armor
    that we are talking about would provide additional protection
    from even more deadly weapons, and we do not normally put that
    on every Bradley, but only on selected units.
        Senator Cochran. As part of the improvement of the
    helicopter and other aviation situation----
        Senator Stevens. Senator, I am sorry to say your time is
    up.
        Senator Cochran. I would be glad to wait for another round.
    Thank you.
        Senator Stevens. Senator Shelby--Senator Burns. Pardon me.
    Senator Burns.
        Senator Burns. Mr. Chairman, I have a statement I will put
    in the record.
        Senator Stevens. Without objection.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Thank you, Mr. Chairman. I would like to thank the
    witnesses for coming before our subcommittee today, to testify
    on the Army's fiscal year 2005 budget.
        Our military, and the U.S. Army in particular, has many
    folks engaged in Afghanistan and Iraq, fighting the war on
    terrorism. We are winning this war on terror. Our soldiers,
    sailors, airmen and marines are performing magnificently. We
    must honor those who have made the ultimate sacrifice for our
    country, to ensure that our forces have the resources to defeat
    the enemies of our country. With 325,000 soldiers deployed in
    120 countries, including 165,000 reservists, there is no
    question that our forces are being challenged.
        I see the increasing trend in the ratio of reservists
    overseas from 37 percent in the early stages of Operation Iraqi
    Freedom to 46 percent currently. In Montana, over 40 percent of
    our National Guard units have been called to active duty. I
    intend to do my part as their representative to ensure our
    armed forces have what they need to win this war, protect our
    homeland, and come home safely.
        We have announced that the Army force structure will grow
    by 30,000 soldiers, on a temporary basis. We must plan
    appropriately to house, equip, and train these men and women
    who serve. While the force structure increase may be temporary
    and funded through the supplemental appropriation, I urge the
    Army to consider all the costs associated with this increase so
    that we are not forced to sacrifice the research and
    development of systems that maintain the superiority of our
    forces, just so that we may support our operating budget.
        I read daily of our great American Soldiers and Marines
    developing unconventional solutions to solve the problems they
    face in the field. I think it makes a great deal of sense to
    have an organization chartered to bring good ideas from our
    nation's universities, laboratories, and small businesses to
    the soldiers as soon as possible, and where necessary,
    bypassing the bureaucracy. I encourage your continued support
    of Army initiatives to expedite the fielding of urgently needed
    equipment through efforts such as the Rapid Fielding Initiative
    and the Rapid Fielding Force. These efforts have resulted in
    the fielding of great innovations such as advanced weapon
    sights, optics, compact soldier communication systems, and
    compact GPS Receivers.
        I see that the Army has been cooperating with other
    agencies such as DARPA on a range of technologies urgently
    needed for the war on terror. This cooperation has allowed us
    to field technologies to defeat improvised explosive devices,
    investigate underground structures, and provide a low cost air
    reconnaissance capability to our forces.
        I am aware of the program initiated to transform our Army
    ground forces; the Future Combat Systems. It is a good sign of
    its acceptance by the Army to see its transition from science
    and technology into full-scale development. It is encouraging
    to see the Army take ownership of this program, begun
    unconventionally in partnership with DARPA, on a very
    challenging schedule intended to field an evolutionary
    capability in the near term. More recently in Operation Desert
    Storm and Operation Iraqi Freedom, we witnessed the incredible
    advantages of joint operations, leveraging the advantages of
    air superiority and precision weapons. We have seen an increase
    in the number of Unmanned Air Vehicles (UAVs) in use by our
    forces at all echelons. The feedback I have received from the
    soldiers on the ground is that they wish they had more of these
    systems, not less.
        I look forward to seeing how the Army will amend its budget
    and re-allocate the resources dedicated to the Comanche within
    the Army to other aviation programs, like the continued
    fielding of technology that will add a measure of protection to
    our Blackhawks and Chinook helicopters.
        Again, I thank all of you for being here today. I look
    forward to the discussion before us this morning. Thank you.

        Senator Burns. I just have one question.
        By the way, I just want to state publicly now:
    Congratulations. Our visits to Iraq and Afghanistan have been
    very fruitful and I want to congratulate your people, both
    leadership and the Government issue (GI's) that we have got on
    the ground. They are doing a remarkable job under very
    difficult conditions, knowing that they are the target and are
    in a reactive position rather than in an active position, which
    is a tough way to operate your business. The morale I found was
    high. I was really impressed with the leadership of those young
    men and women that you have over there, and I want to
    congratulate you on that. That comes from an old marine and it
    comes hard. No, not really.

                    RESERVE COMPONENT TRAINING AND EQUIPMENT

        We have got 40 percent of our Guard in Montana deployed and
    now we have gotten notification that the 163rd Mechanized
    Infantry Regiment out of Bozeman, Montana has been put on
    alert. There is some question about equipment. I have worked
    very hard to build the infrastructure for training both in my
    Reserves and my Guard in Montana, because whenever the move was
    made that a lot of our force structure was going to go into our
    citizen-soldiers I made sure that they had, the Guard and the
    Reserves, communications that was interactive for training, the
    facility was part of the recruitment and the morale of the
    troops. I felt their training had to be as good as what we are
    providing our soldiers on active duty.
        But I am just wondering about the equipment when they
    deploy. Now, some of the equipment is not up to what we find
    with our active duty personnel. Will their equipment, such as
    the body armor--and I have got written down here ``HMMWV, body
    armor''--will that all be brought up to the same as active duty
    whenever they are deployed?
        General Schoomaker. Sir, we have equipped the Guard--the
    30th, the 39th, and the 81st that right now are in motion for
    OIF-2 received the top, the most modern body armor, equipment,
    helmets, what we call RFI, the rapid fielding initiative. They
    received it ahead of the Active Force, and we are now of course
    catching up on the Active Force.
        But our intention and our commitment is to equip the Army
    at the top level across the Active, Guard and Reserve and to
    train, to do what you are talking about uniformly across the
    force. That is our initiative here as we go to modularity,
    stability, and to do the kind of things that we are talking
    about doing.
        Senator Burns. That is good news. Also, when you integrate
    they have still got to be part of a team and they have got to
    understand what position they play on the team, so to speak. I
    have been always concerned about that.

                       IMPROVISED EXPLOSIVE DEVICES (IED)

        Under another, I would like some sort of a briefing
    whenever we get time, and I can communicate this with Secretary
    Brownlee, but deploying new technologies for detection and
    worrying about these roadside bombs and detection devices. Is
    the Defense Advanced Research Projects Agency (DARPA)--are you
    satisfied with the progress that DARPA is making in new
    technologies for detection?
        Mr. Brownlee. Sir, we have within the Army an IED task
    force. I do not want to get into a lot of detail of what they
    are doing, but let me say that not just DARPA but every agency
    that can help has been asked to help and has been very
    forthcoming. Let me just say that we are pleased with what this
    task force is doing and what they are accomplishing and what it
    looks like we can accomplish, and we would be happy to provide
    that to you in a different session.
        Senator Burns. Well, it looks like this is the wave of the
    future and I think that is pretty important.
        That is all the questions I have and I want to congratulate
    the General on his boots.
        General Schoomaker. Sir, those are Wyoming boots.
        Senator Burns. That is what I thought. Are you as good a
    roper as the boots are?
        General Schoomaker. I am a half-decent roper. Are you a
    heeler?
        Senator Burns. I can do both ends, but I am not very good.
        General Schoomaker. Good. I do not play golf; I do that.
        Senator Burns. Good man.
        Senator Stevens. The most important question is, do you
    fish, General?
        Senator Burns. He does that, too.
        Senator Stevens. We will cover that later.
        Tell us about the Future Combat System and what the status
    of that project, program, is now, will you please?

                              FUTURE COMBAT SYSTEM

        Mr. Brownlee. Sir, let me say a little bit about the
    program. As you know, it is the Army's system of systems
    approach to equipping our future forces. We intend to convert
    most of our heavy units to that and maybe some others in the
    future. Right now we are looking at an initial operational
    capability by 2010 and a full operational capability by 2012.
    It is all in R&D development right now and, as I said, we have
    this approach with a lead system integrator where the
    contractor works very closely with the Army in the development
    of these systems.
        Do you want to comment on what we intend to do with it?
        General Schoomaker. I think the best statement is that we
    think we are going to fulfill, we have got confidence we are
    going to fulfill, the Future Combat System. We are protecting
    the funding. We are moving forward on it. We are informing
    ourselves with our current operations and spiraling things into
    Future Combat System, and we are trying to pull technologies as
    they are developed back into the current force.
        So I look at the Future Combat System not as a destination,
    but as an effort every day as we move out there. I am fairly
    confident that we are going to do well there. The biggest
    challenge we have in the Future Combat System in my view is the
    command, control, communications, computers, intelligence,
    surveillance, and reconnaissance (C\4\ISR), the battle command
    and the intelligence, surveillance and reconnaissance aspects
    of that, because it is a network, it is dependent upon the
    network, and we must achieve the networkcentricity that is
    required for us to really optimize what the Future Combat
    System holds. It will significantly improve our ability to
    operate as part of a joint team.

                          SUPPLEMENTAL BUDGET REQUEST

        Senator Stevens. Gentlemen, I think I must take
    responsibility for the fact that there will be no supplemental
    this year, in the balance of this fiscal year. We just spent
    too much time on those supplementals in the past. I had the
    Congressional Research Service (CRS) take a look at policies we
    have followed now since the Persian Gulf war and those policies
    have been that in the initial periods of a war, engagement
    overseas, we have followed the practice that the Commander in
    Chief takes money from the funds we have already made available
    for the Department of Defense and uses them in the conduct of
    that activity and then later comes in and asks for a
    supplemental which repays the amounts that have been taken from
    the regular accounts, and then provides for the balance of the
    fiscal year for those activities using the experience of the
    first quarter, quarter and a half of the new fiscal year to
    determine how much will really be needed for that fiscal year.
        My question to you is, you have not lived through those
    periods, but in terms of your judgment has the Army--the Army
    bears the real brunt of this type of policy. Has it in anyway
    been harmed by that practice? Is it a practice we should
    abandon and ask for a supplemental now? The budget will have at
    least $30 billion indicated as being available for the
    supplemental some time after the beginning of next calendar
    year.
        I want to know, are you willing to go on the record and
    tell us whether this policy adversely affects the Army in its
    activities in the conduct of the war?
        Mr. Brownlee. Yes, sir. We have looked at this very
    carefully and we believe with the funds we have in fiscal year
    2004 both in our budget and from the supplemental that we can
    clearly get to the end of fiscal year 2004. If we get in
    trouble, OSD has assured us they are able to help. Beyond
    fiscal year 2004 when we would have the funds available in the
    fiscal year 2005 budget, we would be able to cash flow funds
    out of third and fourth quarter funds to help us in the first
    and second quarters, and if there are additional problems that
    might arise, we have checked with OSD and they believe the
    administration is capable of providing any other help we might
    need, which means we should be able to carry ourselves at least
    through the end of March next year, maybe a little beyond. I
    would not want to put a date on it, but at least until then.
    That is our best estimate.
        Senator Stevens. That is the policy we followed in Kosovo
    and Bosnia and as a matter of fact in the initiation of the
    Persian Gulf war.
        Mr. Brownlee. Yes, sir.
        Senator Stevens. But there has been a request that we
    change that policy. You are confident that you can live with
    this policy in terms of this war?
        Mr. Brownlee. Notwithstanding any emergencies that we do
    not see now, sir, we can.
        Senator Stevens. General and all your general officers, you
    lived--I am going over the line a little bit here--you lived
    through these other engagements. Was the Army inconvenienced in
    Bosnia or in Kosovo in that manner of funding the operations
    overseas?
        General Schoomaker. Sir, not that I am aware of. The only
    thing that I would say--and it is a little bit below the radar
    screen probably--but as you know, there are anti-deficiency
    rules and there are times when we could make better decisions
    if there was certainty of funding in certain areas, so that we
    may be able to not only anticipate better but provide better
    fiscal management if we had the opportunity to do a little
    longer lead time on some things.
        But in terms of the macro picture and the big news, I am
    not aware of there having been a problem in that.
        Senator Stevens. Senator Inouye.
        Senator Inouye. Thank you.

                     TRAVELING ARMY EXHIBIT ON INTEGRATION

        As you can imagine, as part of my work I try my very best
    to travel and meet and listen to men and women in uniform. I
    find that there are two elements involved in the development of
    a combat soldier. One is morale, naturally; and the other is
    the sense of belonging to a unit.
        So some years ago I began questioning people and, to my
    surprise--I should not have been surprised--almost no one had
    ever heard of the Fifth Regimental Combat Team, made up of
    Puerto Ricans, which served in World War II. When I tell that
    to the Puerto Rican Americans, their eyes light up and they
    say: My God, we had our men in there?
        Even with all the documentaries we have had about the
    members of the Army Air Corps, the Tuskegee Airmen, not too
    many Americans are aware of them. But when you tell them that
    this unit protected bombers and never lost a single bomber they
    are stunned. They were made up of men who were segregated, like
    the Puerto Ricans were segregated. Then when I tell them that
    there was a Filipino regiment, a combat team, sent to the
    Philippines just before December 7 and they ended up the war
    with less than 800 men because they were left there by General
    MacArthur to serve as the basis of a guerrilla force, they are
    stunned. When I tell Hispanic Americans that 17 of them have
    medals of honor, they cannot believe it.
        So, Secretary, you and I have worked out something of a
    traveling exhibit. We are going to send them all over the
    museums of the posts. I just want to know, how is it coming
    along.
        Mr. Brownlee. Yes, sir. Sir, I will provide the answer for
    the record, but to my knowledge we are proceeding with that. I
    certainly support what you are doing. I think it will show a
    real benefit to the Army in recruiting and we want to do that.
    So I thank you for the idea and I will get you a detailed
    account of where we are.
        [The information follows:]

                           Traveling Army Art Exhibit

        Sir, I have asked our Chief of Military History, Brigadier
    General John S. Brown, to take the lead for the Army on this
    very important project. A partnership between the National
    Center for the Preservation of Democracy and the Army has been
    established for the purpose of establishing a traveling
    historical exhibit. I believe this is an excellent idea, and
    that the evolution through time of an acceptance of cultural
    and racial differences is a worthwhile theme. Certainly the
    spirit of tolerance is one of the greatest strengths of our
    present armed forces and of our democratic heritage. The funds
    have been transferred to the Center of Military History.
    General Brown's staff is currently working out the contracting
    details and assisting in coordinating the traveling venues with
    the National Center for the Preservation of Democracy. General
    Brown is scheduled to have an office call with you on Monday,
    March 22, 2004, and can answer any specific questions you have.

        Senator Inouye. Well, we have a lot of talk about human
    rights and civil rights. Integration began in the Army. That is
    the first place. It was not the Interior Department or any
    other Department; it was the Army.
        Mr. Brownlee. Yes, sir. Sir, thank you for that.
        Senator Inouye. Thank you, sir.
        Thank you, Mr. Chairman.
        Senator Stevens. Senator Shelby.
        Senator Shelby. Thank you.

                                     RESET

        I would like to go back to the reset programs, the
    projections for it. It is my understanding from some of the
    depots, that a plan to do reset has not--the plans have not yet
    materialized, General, while projections for the reset workload
    at the depots continue to go down. Is 10/20 the standard our
    soldiers deserve? An adequate overhaul, a lot of people
    contend, cannot be accomplished anywhere but in the depots.
        What is the real reset plan for the depots? Mr. Secretary,
    do you want to touch that?
        Mr. Brownlee. Sir, we are using the depots now. You might
    be interested to know that in these depots, particularly the
    one in Anniston, we are using them to assist us in preparing
    armor kits for all the HMMWV's that are not up-armored as they
    cross the line.
        Senator Shelby. I know. I was down there. I just saw what
    they are doing.
        Mr. Brownlee. They are cutting steel and putting together
    kits----
        Senator Shelby. It is very innovative.
        Mr. Brownlee [continuing]. To help us do that, and we are
    very appreciative of that. In fact, we fly those over, that is
    how important that work is that they are doing there.
        Senator Shelby. What about the projected work on reset for
    the depots? It has not come forth yet. What do you--what is
    going on here?
        Mr. Brownlee. Sir, a lot of our equipment has not been
    brought back yet, and we have provided for I believe it is 17
    systems--is that the number that we would propose----
        General Schoomaker. I think 15 systems in reset.
        Mr. Brownlee [continuing]. That we have provided for, and
    it should get to the depots soon. I am not sure why it has not.
    Now, some of it we are going to have to do in theater because
    it is going to stay there.
        Senator Shelby. Would you get back to me on the details of
    this? Will you get the details to me?
        Mr. Brownlee. Okay, sir, we will do it.
        General Schoomaker. Sir, I have got----
        Senator Shelby. General?
        General Schoomaker [continuing]. A card here, if I could,
    comment on that. We requested and received $1.2 billion in
    fiscal year 2004 supplemental funding for depot-level resetting
    the force, above our President's budget 2005 position. So this
    is going to be a massive effort. As I said, this effort will
    continue 2 years beyond the emergency as we reset the massive
    amount of equipment.
        Senator Shelby. We are bringing our equipment up to
    readiness status.
        General Schoomaker. Yes, sir. Yes, sir.

                         SCIENCE AND TECHNOLOGY FUNDING

        Senator Shelby. The science and technology (S&T) funding,
    General. In comparison to 2004 funding, every R&D account but
    one goes down in the 2005 request. Basic research is cut $64
    million, applied research is cut $389 million, advanced
    technology development is cut $391 million, advanced component
    development and prototypes is cut $186 million, RDT&E
    management support is cut $34 million, and operational systems
    development is cut $167 million.
        I am not sure how the R&D program is balanced. I support
    FCS, but it seems that the budget is harmful to the Army's
    organic labs and this could be a problem, Mr. Secretary.
        Mr. Brownlee. Sir, we actually--our R&D actually went up
    from fiscal year 2004 to fiscal year 2005.
        Senator Shelby. But not in these specific programs.
        Mr. Brownlee. Not in those specific accounts. Sir, we will
    have to take a look at them. I suspect also because we had
    about $1.2 billion in development funds for Comanche, much of
    which will now be directed into procurement, that that number
    is going to be adjusted when the budget amendment comes over.
        Senator Shelby. Would you look at these accounts, take a
    second look?
        Mr. Brownlee. Yes, sir, we will.
        Senator Shelby. These are organic lab accounts. I think
    they are important for the future.

                             MINIATURE KILL VEHICLE

        I want to get, while I have got a little time hopefully, to
    Space and Missile Defense Command (SMDC). You are very familiar
    with that. The SMDC Technical Center is managing the miniature
    kill vehicle (MKV) program. What do you think of the MKV
    program and the technical center's role?
        Mr. Brownlee. Sir, I would have to take it for the record.
        Senator Shelby. Do you want to get back with us on this?
        Mr. Brownlee. I will.
        [The information follows:]

                             Miniature Kill Vehicle

        Recent changes in policy, brought about by the demise of
    the Anti-Ballistic Missile Treaty, allow a broader set of
    midcourse defense alternatives to be developed, tested and
    fielded. The Multiple Kill Vehicles program, formerly titled
    Miniature Kill Vehicle, is addressing the need for a lower cost
    solution to emerging ballistic missile threats that may carry
    multiple reentry vehicles or sophisticated countermeasure
    suites. The Army's Space and Missile Defense Technical Center's
    long history of demonstrated success in developing advanced
    ballistic missile interceptors and in advancing basic science
    leading to component miniaturization under the Small Business
    Innovative Research program makes it the natural choice to
    serve as the Missile Defense Agency's Executing Agent for the
    Multiple Kill Vehicles program.
        The Multiple Kill Vehicles (MKV) program will address
    midcourse discrimination issues created by countermeasures
    postulated for the 2010+ timeframe by intercepting all credible
    threat objects with one or more kill vehicles. This solution
    offers a low system cost and an effective approach against
    ballistic missile threats just beginning to emerge by using
    multiple kill vehicles deployed from a single booster and
    carrier vehicle to intercept all credible objects that have not
    been positively identified as non-lethal. At very high closing
    velocities, even a low mass kill vehicle will have enough
    kinetic energy and penetration capability to kill a threat
    warhead in most engagements. This work is indeed critical for
    the defense of the United States and our allies against long
    range ballistic missiles; however, the capability under
    development through the MKV program is not currently designed
    to engage battlefield rockets and other short-range threats
    currently encountered in Iraq.

        Senator Shelby. We have been told that the work is critical
    and the technology is badly needed. I do not know if this is
    the right forum to discuss all this.

       PATRIOT ADVANCED CAPABILITY--PHASE 3 (PAC-3) MEDIUM EXTENDED AIR
                      DEFENSE SYSTEM (MEADS) REPROGRAMMING

        Mr. Brownlee. I am not sure either, sir. I will be happy to
    take it for the record.
        Senator Shelby. Will you get back with me on this?
        Of course, the PAC-3 MEADS transfer to the Army, there was
    apprehension in the Congress that the Army might use these
    funds to pay other bills. We were met a couple weeks ago with a
    reprogramming action. Could you get this to me, too?
        Mr. Brownlee. What funds were these, sir?
        Senator Shelby. Reprogramming action, MEADS.
        General Schoomaker. PAC-3.
        Senator Shelby. PAC-3 MEADS.
        Mr. Brownlee. Sir, I will look.
        Senator Shelby. Will you get back with us on the record on
    that?
        [The information follows:]

                              MEADS Reprogramming

        The Army submitted a reprogramming request in order to fund
    critical Patriot software and hardware upgrades. These software
    and hardware upgrades will address deficiencies within the
    current Patriot system that contributed to the two incidents of
    fratricide during Operation Iraqi Freedom. These upgrades will
    improve situational awareness, command and control,
    classification, correlation, and operations in areas of
    increased electro-magnetic interference. Since final decisions
    on the combined aggregate Patriot/MEADS program, to include
    negotiations with international partners, have yet to be
    finalized, the MEADS portion of the combined program was deemed
    an appropriate bill-payer for these important Patriot upgrades.

        Mr. Brownlee. You know, we greatly accelerated that program
    just before the war and we were going to bring it back down to
    a more reasonable level, because we did really accelerate it
    just before the war, PAC-3.
        Senator Shelby. If you will discuss those.
        Mr. Brownlee. Yes, sir.
        Senator Shelby. Mr. Chairman, thank you very much.
        Senator Stevens. Senator Cochran.
        Senator Cochran. Thank you, Mr. Chairman.

                            UNMANNED AERIAL VEHICLES

        General Schoomaker, as part of the announcement of the
    cancellation of the Comanche program, I understand the Army has
    decided to use unmanned aerial vehicles to fulfill some of the
    capabilities that Comanche was to provide, and that you have
    identified over $300 million from that program to procure
    additional legacy and future UAV's.
        Given that the Fire Scout UAV has been selected to be part
    of your Future Combat System force, would the Army be served
    better by accelerating procurement of Fire Scout UAV's instead
    of buying more legacy systems?
        General Schoomaker. Sir, I would have to--again, I would
    have to take that for the record. I know that UAV's are a
    significant part of our future and a growing part because the
    potential there is great. I know as we move to FCS, the Future
    Combat System, that they are going to be a large part of that.
        As you know, we have had some significant success with
    UAV's in the current conflict. We are starting to see greater
    potential in some of that. But as to the specifics of that, I
    would have to go for the record.
        [The information follows:]

                                UAV Procurement

        In order to meet the current requirements for Operation
    Iraqi Freedom and the Global War on Terrorism, we are
    accelerating the procurement of Unmanned Aerial Vehicles (UAVs)
    already in production, such as the Shadow Tactical UAV, and the
    Raven Small UAV. We are also working to accelerate future
    systems such as Fire Scout and the Extended Range/Multi-Purpose
    (ER/MP) UAVs. However, both of these future systems are still
    in development and thus not available today to meet the
    warfighter's need. Army commanders engaged in current
    operations hail the capabilities of the Shadow UAV, which
    supports Current Force mechanized, light, and Stryker Brigade
    Combat Teams, and the Hunter UAV systems, which are fielded to
    III Corps, Fort Hood, Texas, XVIII Airborne Corps, Fort Bragg,
    North Carolina, and V Corps, U.S. Army Europe, and serve as the
    interim ER/MP UAV. Both current and future UAV systems are part
    of the Army's UAV strategy. However, in order to meet the
    immediate needs of combatant commanders, we must equip our
    units with these current systems until Future Force UAV systems
    are developed, integrated and ready for fielding.

        Senator Cochran. I hope you would also include in your
    response for the record whether or not you think that the $300
    million is an adequate investment in advanced UAV's.

                              AMMUNITION SHORTAGES

        There is also a critical shortage of both training and war
    reserve ammunition, such as the Hydra-70 rocket. The decision
    to cancel the Comanche program and procure new helicopters will
    increase the need for training ammunition and of course war
    reserve ammunition. The question is how does the Army plan to
    address these shortfalls, which we understand could be as high
    as $16 billion?
        General Schoomaker. Sir, we moved $30 million this year to
    increase the capacity of Lake City, which is your small
    caliber, 50 caliber and below small arms ammunition, which is
    going to mitigate. I think by the end of this year, we will
    have capacity that will turn the corner and mitigate the
    shortfalls we have had in small arms, which I have been very
    concerned about.
        As part of the Comanche program, we moved $155 million of
    that program as part of the aviation reset, part of the
    aviation fix, to the Hydra rocket program. I think it buys
    something like 163,000 Hydra rockets in this program; and $93
    million into the Hellfire line. This was the point I tried to
    make earlier. This movement of money from Comanche into fixing
    Army aviation is not just about the helicopters. It is about
    UAV, it is about ammunition, it is about MILCON, it is about
    simulations, it is about training. It is a holistic approach to
    fixing Army aviation, and the point that you have made right
    there is one of the most significant.
        Senator Cochran. Thank you very much.

                            THEATER SUPPORT VEHICLES

        I understand too that the Army has been impressed by the
    performance of leased high-speed vessels and is considering
    leasing these types of craft as theater support vessels. There
    are several American shipyards capable of producing these
    vessels both quickly and economically based on what I
    understand to be successful experimentation. What are the
    Army's plans for procurement of theater support vessels?
        Mr. Brownlee. Sir, we have been impressed by the capability
    of those vehicles. We are right now considering how they can
    help us in our deployments and so we are studying how we can do
    that. We do not have right now any plans to lease, but we are
    considering how that vehicle can be used. It is much faster
    than a normal ship and for some of our deployments we believe
    it would be very useful. So we are looking at that.
        Senator Cochran. Thank you very much, Mr. Chairman.
        Senator Stevens. Thank you.
        Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman.
        Gentlemen, good to see you, all of you. You have a pretty
    impressive bench behind you.
        General Schoomaker. Sir, we need a lot of help.
        Senator Leahy. I do not think so, but you have good help
    there and that is good.

                                  ADD-ON ARMOR

        I understand Secretary Brownlee mentioned before I came in
    about the Bradley reactive armor and that you do not have
    enough. When I first heard about this reactive armor years ago,
    I said, you have got to be kidding, the way it was described.
    Then I started seeing some of the tests and all and I must
    admit I am very, very much of a fan. I think it is critical. I
    have heard great things about its performance. I hope we can
    get the funds to expand it. If my son or daughter were among
    those in this armor, I would want it there yesterday. I know
    some of our Guard forces that are going over into Iraq and
    scrounging armor wherever they can, I think it is important we
    get it out.

                              COMANCHE TERMINATION

        General, on the Comanche program, General Cody had given me
    a call at home before that to let me know about the decision.
    Of course, I must admit we did end up chitchatting a little bit
    about Montpelier, Vermont, and you are welcome to come up there
    any time. As the Secretary has mentioned, General Richard Cody
    and I both come from Montpelier, Vermont, and knew each other
    when we were growing up. We only say good things about each
    other because it is sort of a mutual deterrent pact. But I
    cannot really think of anything bad to say about him.
        But he told me about the Comanche program. I thought it was
    a good decision. I thought it was taking resources away from
    too many other very critical aviation programs, all the
    infrared missile countermeasures for example.

                     HEALTH USAGE MONITORING SYSTEM (HUMS)

        Let me just mention one, and I admit this is probably the
    first time any parochial type questions have ever come out of
    this committee, but it is the HUMS program, the Integrated
    Mechanical Diagnostic Health and Usage Monitoring System. I am
    glad my staff wrote it all out because I have just called it
    ``HUMS'' and I never was quite sure what it stood for.
        But we are using it on the Blackhawks of the 101st Airborne
    Division. It is a great diagnostic system. I have seen it
    demonstrated. If I was commander and I had 10 helicopters out
    there, I would want to know exactly which of the 10 can go out
    or how many can go out, and so on.
        Are we going to reach a point where we might be equipping
    all our helicopters with HUMS? Are we going to be able to find
    money for that? I see it as sort of like cheaper to fix the
    roof before the rainstorm kind of thing. Mr. Secretary, what do
    you think about this?
        Mr. Brownlee. Sir, I know that we have an intense interest
    in those kinds of diagnostics maintenance equipment. It has
    great use. I am not familiar with right now the extent to which
    we intend to buy those and equip all our helicopters with them,
    but we can certainly provide that for the record.
        [The information follows:]

                     Health Usage Monitoring System (HUMS)

        The Army is currently performing a two-year demonstration
    on the Health Usage Monitoring System (HUMS). The 101st Air
    Assault Division tested HUMS on a number of UH-60 Blackhawks
    while deployed to Iraq. The initial reports from this
    demonstration are positive. The Army will use the data from
    this demonstration to help guide its future policies on
    installation and utilization of these types of diagnostic
    systems. For future systems, the AH-64D Block III, UH-60M, and
    CH-47F programs are planning to install some type of organic
    maintenance diagnostic system.

        Senator Leahy. Yes, would you have your staff talk to mine.
    Let us know where we are on that, because it is something I
    have followed very closely. I have helped get some of the money
    through here for the pilot programs. I have been impressed. I
    have had some things I have helped get money for pilot
    programs, they have not worked. I have freely admitted that.
    Others do, and this one does seem to work.
        General Schoomaker. Sir, if I could add to that, I think
    General Cody explained to you, again as part of our Army
    aviation modernization program, that as we transfer money from
    Comanche it is our intent to go to a two-level maintenance
    system in that, as well as going to the automated logbook on
    these aircraft. So I am not sure that this system you are
    talking about is integral to that, but we are certainly
    committed to a far advanced system of maintenance management to
    increase our operational readiness and impact the force
    maintaining-wise.
        Senator Leahy. Thank you, General.

                        POST-TRAUMATIC STRESS TREATMENT

        My last subject. I was up here 3 or 4 weeks ago in Vermont
    on a beautiful Sunday morning, having my coffee. My wife is a
    nurse. She worked on medical-surgical floors and all, and has
    also spent time with the Veterans Administration (VA) hospital
    system when I was in law school. She said: Patrick, you have
    got to read this. It was this New York Times, this New York
    Times magazine, ``Coming Home.'' It is basically talking about
    soldiers with post-traumatic disorder. In my generation we
    called it shell shock.
        It was a very moving article. Since then I cannot tell you
    the number of e-mails I have gotten from veterans, from parents
    of people who were over abroad, those who are parents of people
    in the military or spouses or what-not, who sent me this
    article. Of course, we have all the reports of depression and
    suicide among our troops. I went out with some other Senators
    and my wife to have dinner one evening out at Walter Reed, and
    just some of the stories I was hearing there.
        The condition requires specialized treatment. You have to
    have a system in there that will encourage troops to come
    forward. You are out there, you are facing terrible danger. You
    may get shot, you may be seriously wounded. You have proven
    your bravery, and our men and women are brave. But then there
    seems to be among some that it is not brave to come forward and
    ask for this treatment.
        It has got to be there. You have got to make sure it is
    there. I am going to looking at it both on this committee and
    on the subcommittee I serve on that oversees the VA.
        But can you give me just a broad overview? What kind of
    programs do we have? Because I find the suicide rate alarming
    among our forces. I find the people who come back terribly
    injured, and I do not want them to be rejects of society. They
    have earned an awful lot more than that.
        Mr. Brownlee. Sir, I could not agree more. I appreciate all
    of the members who have gone out and visited our troops at
    Walter Reed and other hospitals. Clearly, the sacrifices that
    these young soldiers have made for our country are deserving of
    the very best attention we can get them. I have addressed your
    specific questions to those at Walter Reed. This is an integral
    part of their care. They receive this kind of care and
    counseling right along with the physical medical part, and it
    is just clearly integrated in their care.
        Senator Leahy. Is this budget going to reflect that?
        Mr. Brownlee. Yes, sir. Yes, sir, it is.
        I should also tell you that, while the number of suicides
    in the theater has been more than is acceptable to us, it is
    not significantly above the norm, and there are still some
    cases that are not properly determined and that could put us
    substantially or more above the norm. But we conducted, for the
    first time in a combat theater, a mental health assessment. We
    sent a team out, visited units, talked to soldiers, gathered
    data, and came back with some conclusions and recommendations
    for how we can do better, not during the war or after the war,
    but before we send troops in, what we can do to prepare them
    better, as well as--so that they can cope better with the
    situations that they face.
        I thought it was significant that that was done while the
    troops were committed there. But it is the first time we had
    ever done that.
        Senator Leahy. I commend you for doing that, Mr. Secretary.
    I think it is extremely important. I know our men and women are
    motivated, but sometimes the things they face are something
    they really did not understand. I remember the conversations I
    had with my son after he finished out in Parris Island with the
    Marine Corps. Of course, like all former marines, the further
    he is removed from that the more enjoyable I guess it was. But
    at least there they always knew when the explosions were going
    off or anything else that that night or the next night or the
    next night they are going to be back in their barracks and the
    only thing they had to worry about was their drill instructor.
        Now we have people out and they are seeing their friends
    having their limbs blown off and all and they are facing real
    danger, which is unavoidable in these situations. I just want
    to make sure that we fulfill our commitment--we tell them to go
    out--we fulfill our commitment when they come back. Some of
    them--on the one hand, I am very impressed when I see some of
    these high-tech prosthetics we have for those who have lost
    limbs, which are really amazing. But you also have to have--it
    is not just their bodies with some of them.
        So I commend you for sending the team out, and please have
    your staff keep in touch with me if you have areas in there
    that you think would be worthwhile to know.
        Mr. Brownlee. Yes, sir, we will.
        If I could just add, Mr. Chairman, because I would like for
    the committee to know. When we first started getting wounded
    soldiers back to Walter Reed in significant numbers and with
    the very kind of grievous wounds they had, where they had
    clearly lost limbs and this sort of thing, where many of them
    were going to be medically retired as disabled--it is amazing
    the numbers that want to stay in even though they have lost
    limbs, and some have stayed. But I contacted Tony Principi, a
    dear friend of mine who runs the Veterans Affairs Department.
    We have put together a team. We have people in his
    organization. He has people from his organization working at
    Walter Reed and other places, and the whole intent of this is
    to ensure we have a seamless system for these soldiers, so that
    if they are medically retired from the military and then become
    part of the Veterans Affairs Department responsibilities nobody
    gets dropped off. We take care of them through that, manage
    them through that process.
        His intent and mine is to make sure that for every single
    wounded soldier that is medically retired and becomes a part of
    the Veterans Affairs responsibility that that is a seamless
    operation.
        Senator Leahy. I have gone over my time. Let me just say
    that I talked to one young soldier who was there. His wife was
    with him and they have a little child, and he was showing me
    this leg, mechanical leg, with the computer sensors in it. I
    said: Well, what are you going to do now? He looks at me like:
    What kind of a question is that, sir? I want to be right back
    in the Army. He said: I am going to work hard with this because
    I want to go back. I thought: Good for you.
        Mr. Brownlee. And many of them have, sir.
        Senator Leahy. Thank you.
        Mr. Chairman, thank you very much. It is good to see both
    General Schoomaker and Secretary Brownlee. Thank you.
        Senator Stevens. Yes, we all thank you very much, Mr.
    Secretary and General. I do think there is a lot of comment
    being made around here now about how the Army is being harmed
    by these decisions that have been made with regard to the
    budget. I want to tell you before we finish our bill we will
    confer with you to make sure that you have the flexibility you
    need to use any funds that are available, not just in the
    Department of Defense, but to the President, period, to assure
    there be no shortfall in funds while we have soldiers in the
    field, keeping in mind that from this Senator's point of view
    the worst thing that can possibly happen to the Army as well as
    the Senate is to have a post-election session. We get nothing
    done and I assure you you would not get any more money after
    the election than you would get after January 1, but it would
    be a very arduous period in which to try to get it.

                         ADDITIONAL COMMITTEE QUESTIONS

        I would like to avoid a post-election session in the
    interests of the people who are at war. We do not need that
    after the election. I hope to work with you to make sure you
    have the money you need and have all the flexibility you need.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                    Questions Submitted to Hon. Les Brownlee
                 Question Submitted by Senator Pete V. Domenici

                          SCIENCE AND TECHNOLOGY (S&T)

        Question. I note that basic and applied research comprises only
    about one-tenth of the Army's $10.4 billion request for RDT&E funding
    in fiscal year 2005. While funding for development of mature
    technologies is important, it has long been my belief that investments
    in basic science and technology are where cutting-edge breakthroughs
    occur. For DOD, this means that our warfighters are able to employ
    transformational technologies sooner. Would you please comment on the
    importance of basic S&T investments for Army transformation?
        Answer. The Army's basic research program produces new knowledge to
    fuel revolutionary advances and leap-ahead technology that enable Army
    Transformation. The program invests in world-class expertise
    (government, academic, and industry) and state-of-the-art equipment. It
    balances its investment between in-house Army unique research and
    leveraging external scientific research that has great potential for
    military applications. The fiscal year 2005 budget submission reflects
    the Army's sustained commitment to make leap-ahead science and
    technology (S&T) investments that will provide high payoff
    transformational capabilities for our Soldiers.
        Army S&T investments, laboratories, and research, development, and
    engineering centers are essential to provide America's Army with
    sustained overmatch in land combat. The Army continues to maintain a
    robust S&T portfolio and workforce to provide solutions to fill the
    capability gaps being identified in current operations in Afghanistan
    and Iraq and will continue to do so in the future. Through its S&T
    investments, the Army fosters innovation and accelerates and matures
    technologies to enable Future Force capabilities and exploit
    opportunities to transition technologies to the Current Force.
                                     ______

                   Questions Submitted by Senator Judd Gregg

                                     ATIRCM

        Question. In addition to updating deployed Aircraft Survivability
    Equipment (ASE) systems, it is my understanding that the Army has
    successfully developed and begun to produce a next generation system,
    the Advanced Threat Infrared Countermeasure (ATIRCM) that will protect
    helicopter crews from threats they currently face. What are the Army's
    plans to deploy the ATIRCM to rotary wing assets?
        Answer. The ATIRCM consists of an active LASER jammer and functions
    as part of a suite containing a Common Missile Warning System, an
    Improved Countermeasure Munitions Dispenser (ICMD), and the Advanced
    Infrared Countermeasure Munitions (AIRCMM--flares). This system
    protects aircraft against all known and currently projected infrared
    threat missile systems. The Army will start fielding the ATIRCM to Army
    Special Operations Aviation in the near future. Conventional Army
    Aviation units will receive the ATIRCM shortly thereafter. Recent
    decisions resulted in accelerating the fielding of the ATIRCM system by
    three full years.
        Question. Secretary Brownlee, the Congress provided approximately
    $7 million in fiscal year 2004 for the development and integration of
    the Advanced Threat Infrared Countermeasure Multi-Band Laser. This
    Multi-Band Laser is a pre-planned product improvement to the Advanced
    Threat Infrared Countermeasure system. What is the status of this
    effort?
        Answer. The Army is in the process of negotiating a task order with
    the Advanced Threat Infrared Countermeasure (ATIRCM) Lead Systems
    Integrator (BAE) to complete the design of the Multi-Band Laser for
    ATIRCM. The estimated award date is scheduled to be not later than
    April 15, 2004.
        Question. Secretary Brownlee, it is my understanding that the Army
    plans to upgrade the Advanced Threat Infrared Countermeasure (ATIRCM)
    system with a multi-band laser that is being developed specifically for
    the ATIRCM program. Furthermore, the Army has considered inserting an
    alternative Multi-Band Laser, developed for the Air Force, into ATIRCM.
    What analysis has the Army or Air Force done on the effectiveness of
    this alternative Multi-Band Laser
        Answer. The U.S. Air Force has done extensive testing of their
    multi-band laser (MBL) for use with large aircraft. This testing
    includes live missile firings, lab testing, and simulations. The
    results of this testing demonstrates that their MBL is effective for
    large aircraft. The Air Force has made a great deal of this information
    available to the Army. The Army has analyzed this data and determined
    that the Air Force MBL could be effective for rotary aircraft. However,
    the Army has also determined that integration of this MBL would be
    schedule prohibitive and would not meet our acceleration requirements.
                                     ______

               Questions Submitted to General Peter T. Schoomaker
                Questions Submitted by Senator Pete V. Domenici

                          IMPROVISED EXPLOSIVE DEVICES

        Question. Does the Army have the authorities it needs to get
    existing technologies in the hands of Task Force Improvised Explosive
    Device (IED) to better detect these bombs? If not, what authorities do
    you need?
        Answer. The Army has sufficient legislative authorities to
    accelerate and transition proven technologies to the IED Task Force.
    Sustained Science and Technology (S&T) investments over time have
    enabled Army S&T organizations, including the U.S. Army Materiel
    Command's Research Development and Engineering Command and the Army
    Corps of Engineers' laboratories, to quickly develop and provide
    expedient solutions to the warfighter in support of the Global War on
    Terrorism. Examples of successful S&T solutions already being provided
    to the warfighter to counter the IED threat include: omni-directional
    under vehicle inspection systems to detect IED and contraband and an
    electronic countermeasure system that provides force protection by
    jamming the prevalent electronic detonators being used to set off IEDs.

                            RECRUITING AND RETENTION

        Question. What is the active-duty Army doing (besides temporarily
    increasing end-strength) to alleviate its reliance on Guard and
    Reserves? Can the Army better manage its use of personnel to ensure
    more of its active-duty component is available to participate in future
    operations?
        Answer. In conjunction with temporarily increasing end-strength,
    the Army is rebalancing its Active Component/Reserve Component (AC/RC)
    capabilities to meet combatant commander needs with an expeditionary,
    campaign quality force. The Army is working to provide the proper
    Active and Reserve Component balance of units to enhance high demand
    and early deploying capabilities. Changes contained in the Program
    Objective Memorandum for fiscal years 2004-09 reduce stress on existing
    high demand units in both the AC and RC by converting approximately
    30,000 of ``Cold War'' force structure. Additionally, we are reducing
    structure and creating a Trainees, Transients, Holdees, and Students
    account in the Army National Guard and Army Reserve. This enhances RC
    readiness by allowing the assignment to units of only those Soldiers
    who are available for deployment. To reduce RC demand for current
    operations in Iraq, the Office of the Secretary of Defense has called
    upon the U.S. Marine Corps to provide a division sized force for
    Operation Iraqi Freedom (OIF) 2. The Active Component is aggressively
    reconstituting forces while converting to a modular based unit design
    to increase capabilities for the Global War on Terrorism and prepare
    for potential OIF3 and 4 deployments.

                              SUBCOMMITTEE RECESS

        Senator Stevens. Thank you both very much.
        General Schoomaker. Thank you, sir.
        Mr. Brownlee. Thank you, Mr. Chairman.
        [Whereupon, at 11:46 a.m., Wednesday, March 3, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    March 10.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                           WEDNESDAY, MARCH 10, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:02 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, McConnell, Burns, and
    Inouye.

                             DEPARTMENT OF DEFENSE

                             Department of the Navy

    STATEMENT OF HON. GORDON R. ENGLAND, SECRETARY, UNITED
                STATES NAVY

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning. This morning, we're pleased
    to welcome the Secretary of the Navy, the Chief of Naval
    Operations, and the Commandant of the Marine Corps to discuss
    the fiscal year 2005 budget request.
        Secretary England, we welcome you back after your time away
    with the Department of Homeland Security.
        Mr. England. Thank you.
        Senator Stevens. Admiral Clark, this is your fourth time
    before the committee, and we welcome you again. And, General
    Hagee, we also welcome you, sir.
        We would like to take this opportunity to thank the Navy
    and Marine Corps for the extraordinary commitment and
    dedication to duty. The ever-increasing demands placed upon the
    men and women of the military do not go unnoticed here in
    Congress, and we really hope that you'll convey our thanks to
    all of the forces under your command. Our forces are deployed
    to more locations around the world than ever before, and will
    be called upon to return to some familiar places, like Haiti.
    We've heard a lot recently about your efforts to reduce manning
    and end strength. We've also heard about the new challenges
    associated with the joint strike fighter, and are anxious to
    hear about your shipbuilding initiatives.
        Gentlemen, we look forward to hearing more about these
    topics and your budget priorities. I thank you for your
    personal visits in the past, and, as always, your full
    statements are already a part of the record.
        And I turn to my co-chairman, Senator Inouye, for his
    remarks.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. I thank you very much, Mr. Chairman. And,
    gentlemen, thank you for being here with us to discuss your
    fiscal year 2005 budget request.
        The Navy and Marine Corps forces are performing
    magnificently, as the chairman has stated, in difficult
    environments, from Operations in Iraq to Afghanistan and, most
    recently, in Haiti. The operational tempo is high, and forces
    are stretched thin. I would like to hear from you today on the
    impact that these operations have on the budget, and the effect
    on the forces if no supplemental funding is requested this
    fiscal year.
        I also look forward to discussing how the fiscal year 2005
    budget request continues to support the men and women serving
    the Department of the Navy while, at the same time, balancing
    the modernization of today's forces with the transformation of
    tomorrow's fleet.
        The Navy and Marine Corps each have a number of significant
    investment programs underway. For the Navy, it's the E-2C
    Advanced Hawkeye, the next generation of destroyer DD(X) and
    carrier CVN 21, the Littoral combat ship and the Virginia class
    submarine, to name a few. The Marine Corps is investing heavily
    in the Expeditionary Fighting Vehicle, the Joint Strike
    Fighter, and the V-22 Osprey.
        This committee knows well, as do each of you, that these
    major acquisition programs tend to experience significant cost
    and schedule growth as many of the programs I just mentioned
    have experienced over the course of their development. Although
    the capabilities that these programs will bring to the naval
    forces will surpass those of our adversaries, we still have an
    obligation to modernize equipment for use in today's conflicts
    and to ensure that the sailors, marines, and their families are
    taken care of. As you know, this is a difficult balance to
    strike. And so I look forward to working with each of you this
    year as we review our budget, and your budget, for the fiscal
    year 2005, and to hearing your remarks today on how to maintain
    the finest naval and marine forces in the world.
        And I thank you very much, Mr. Chairman.
        Senator Stevens. Thank you very much.
        Mr. Secretary?
        Pardon me Senator Cochran.

                       STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. Mr. Chairman, thank you. I just----
        Senator Stevens. I apologize. I didn't see you come in,
    sir.
        Senator Cochran. I'm happy to be here to help you welcome
    this distinguished panel before our committee, Secretary
    England, Admiral Clark, and General Hagee.
        We understand the enormous strain that's been placed on the
    Navy and Marine Corps team, with major operations all over the
    world. It has already been mentioned by the chairman and the
    distinguished Senator from Hawaii that operations are underway
    in Iraq, Afghanistan, and in Haiti. You have deployed nine
    aircraft carriers and 10 big-deck amphibious ships to these
    areas of major operations, and it indicates that this team is
    hard at work, and we are hopeful that we can find a way, within
    the constraints of the budget that we have to operate under,
    that we can provide the funds that you need to continue to
    protect those who are deployed and to help ensure that they
    carry out their missions successfully. I'm confident that
    that's the purpose that we will bring to this process, and we
    thank you for being here today to help acquaint us with the
    challenges you face and let us know how we can be helpful to
    you and to our country.
        Thank you.
        Senator Stevens. Thank you very much, Senator. Again, I
    apologize. I didn't see you come in. You were sort of stealthy
    here this morning.
        Mr. Secretary?

                  SUMMARY STATEMENT OF HON. GORDON R. ENGLAND

        Mr. England. Chairman Stevens, Senator Inouye, members of
    the committee, it is a distinct privilege and a great honor to
    appear before you again as Secretary of the Navy.
        It is great to be back, back with the very best Navy and
    Marine Corps in our Nation's history, and particularly to be
    back with Admiral Vern Clark and General Mike Hagee. Admiral
    Clark and General Hagee are both magnificent military leaders,
    and I am distinctly privileged and proud to serve with them.
        On behalf of all those great Americans in uniform, I thank
    you for ensuring that we are properly resourced. And on behalf
    of all our deployed men and women, and especially their
    families, I also thank you for your personal visits to our
    areas, both in combat and our home bases.
        This is, indeed, a critical budget year for the Department
    of the Navy. This year, we have established a future course for
    our naval forces to quickly respond to and to quickly defeat
    future threats. We have been working for the past 3 years to
    develop this integrated program, a program where line items are
    now linked to provide synergy and complementary capabilities.
    The fiscal year 2005 proposal before you is more than just a
    budget. This is a naval roadmap for the future, and it should
    provide the foundation for many successive administrations.
        Another critical aspect of the fiscal year 2005 proposed
    budget is our people. People continue to be our most valuable
    asset. We are a strong, well-trained, high-motivated and
    combat-ready force. Retention is at record levels, and
    recruiting continues to be robust. We have the best people, and
    their morale is high.
        One last comment. A guiding principle in all we do is
    improving the effectiveness of our organization to also gain
    efficiency. We are good stewards of the taxpayers' money. At
    the same time, being a very lean organization makes us more
    vulnerable to budget adjustments and modifications.

                               PREPARED STATEMENT

        In summary, the Chief of Naval Operations (CNO), the
    Commandant and I are confident that our proposed budget will
    dramatically improve our ability to secure America in the
    future while protecting our Nation today. And I thank you for
    the opportunity to be here today with you.
        [The statement follows:]

                  Prepared Statement of Hon. Gordon R. England

                VALUE TO OUR NATION--THE NAVY/MARINE CORPS TEAM

                                 INTRODUCTION

        During my last appearance before this Committee in February 2002
    and as reported in that statement, the Navy and Marine Corps
    contributions in the ``War Against Terrorism'' have been significant
    and important in the overall success of U.S. military forces. This
    continues to hold true today. Our Navy and Marine Corps Team projects
    decisive, persistent, joint power across the globe, in continuing to
    prosecute the war on terrorism.
        Projecting power and influence from the sea is the enduring and
    unique contribution of the Navy and Marine Corps to national security.
    Operation IRAQI FREEDOM (OIF) demonstrated the strategic agility and
    operational flexibility that forward deployed Naval expeditionary
    forces provide. This committee's support has been vital for the Navy
    and Marine Corps Team to exploit the access afforded by the seas and to
    respond to the full spectrum of contingencies. Congressional support
    has led to increased readiness which was proven in OIF, where dispersed
    military forces, networked together, fought as a single, highly
    coordinated joint team.
        Naval warfare will continue its progression to operate in a joint
    environment in responding to new threats and to the increased
    asymmetric capabilities of our enemies. We will be bold and continue to
    develop new capabilities and concepts, and fund them in quantities that
    are relevant to tomorrow's emerging threats. We have embraced
    transformation. We are addressing the challenge to operationalize our
    vision, Naval Power 21, with technological, organizational, and
    doctrinal transformation.
        The following statement highlights key elements of the fiscal year
    2005 President's Budget applicable to the Department of the Navy within
    the Balanced Scorecard approach of managing Operational, Institutional,
    Force Management and Future Challenges Risks.
        fiscal year 2005 budget priorities--underway with naval power 21
        The fiscal year 2005 Department of the Navy Budget fulfills our
    essential warfighting requirements. We are resourced to fight and win
    our Nation's wars and our number one priority, the war against
    terrorism, is reflected across each allocation. Additionally, we
    continue to invest in future technologies and capabilities that are
    part of a broader joint warfighting perspective. The Navy and Marine
    Corps are continuously working with other Services to draw on the
    capabilities of each Service, to eliminate redundancy in acquisition,
    and create higher levels of military effectiveness. A prime example is
    our agreement with the Department of the Air Force to merge our two
    Joint Tactical Radio System (JTRS) programs into a single program that
    will produce a common family of radios for use aboard our ships,
    submarines, and aircraft. The following summarizes the fiscal year 2005
    Budget request priorities for the Department of the Navy:
        Personnel Salary and Benefits.--Smart, motivated and capable people
    are a key element to any successful transformation effort. Our Navy and
    Marine Corps are increasingly a technologically advanced maritime force
    and we are in competition with the private sector to attract and retain
    the best men and women we can find. Accordingly, our budget includes a
    3.5 percent basic pay raise for all military personnel. Additionally,
    housing allowances have been increased to buy down out-of-pocket
    housing expenses for our military personnel. Concurrent with this
    commitment to provide an appropriate level of pay and benefits to our
    Sailors, Marines, and their families is a responsibility to operate
    this Department as efficiently and effectively as possible. While we
    want the best people we can get to serve in the Navy and Marine Corps,
    we don't want a single person more than we need to properly operate the
    force. Job satisfaction comes not only just from compensation, but also
    from meaningful service--we owe it to our people to ensure that they
    are given duties and equipment appropriate to a volunteer force.
        Operations and Maintenance.--The operations and maintenance
    accounts are funded with over a $2 billion increase. The present
    environment requires Naval forces to be both forward deployed and
    capable of surging when called. This account will help develop the
    transformational Fleet Response Plan (FRP). This is the means to
    institutionalize the capability to maintain a more responsive force
    that is ready to surge, more efficient to maintain, and able to
    reconstitute rapidly.
        Shipbuilding Account.--The Department's shipbuilding plan supports
    our transformational vision and increases the number of new
    construction ships from seven in fiscal year 2004 to nine in fiscal
    year 2005 plus one SSBN Engineered Refueling Overhaul (ERO). Initial
    LCS and DD(X) platforms are funded from the RDT&E account.
    Additionally, the Navy's fiscal year 2005 spending plan completes the
    purchases of the last three DDG-51 Class ships for a total of 62 ships.
        Aviation Account.--The Department's fiscal year 2005 Budget request
    is structured to maintain the continued aviation superiority of the
    Navy and Marine Corps. The Naval aircraft procurement plan emphasizes
    replacing costly stand-alone legacy platforms with more efficient and
    capable integrated systems. The number of aircraft requested increases
    from 99 in fiscal year 2004 to 104 in fiscal year 2005 which includes
    five VXX helicopters. The budget continues to maximize the return on
    procurement dollars, primarily through the use of multi-year
    procurement (MYP) for the F/A-18E/F, the E-2C, the MH-60S and the KC-
    130J programs. Development funding is provided for Joint Strike Fighter
    (JSF), MV-22, AH-1Z/UH-1Y, CH-53X, EA-18G and the Multi-mission
    Maritime Aircraft (MMA). The budget reflects an amended acquisition
    strategy for the V-22 to fund interoperability issues and cost
    reduction initiatives.
        Munitions Account.--During OEF and OIF, the Department expended
    less precision ordnance than projected. In this environment, the
    precision munitions purchases for fiscal year 2005 have been decreased
    for JDAMs and LGBs. This decrease in procurement provides no increased
    risk to the DON but merely reflects the lower utilization rates of
    expended ordnance.
        RDT&E Account.--An increase of $1.4 billion reflects our commitment
    to future transformational capabilities and technology insertion for
    major platforms including DD(X), LCS, CVN-21, V-22, Joint Strike
    Fighter (JSF), Advanced Hawkeye (AHE), and MMA. As demonstrated in
    recent operations, our Naval forces have been able to project
    overwhelming combat power because they are technologically superior. We
    continue to sustain a robust RDT&E effort as we transform the Navy and
    Marine Corps to the next generation of combat systems.
        Effectiveness and Efficiency.--A guiding principle in all we do is
    improving effectiveness to gain efficiency. The very best organizations
    are the most efficient organizations. If you are very efficient, you
    incorporate technology more quickly, you can develop new systems and
    capabilities, and you can bring them on line faster. Underlying all of
    the previous accounts and our execution of them is a continuing and
    concerted focus to achieve the most efficient organization. The Fleet
    Response Plan, TacAir Integration, and establishment of the Commander
    Naval Installations are a few of our initiatives to improve
    effectiveness within the Department.
        Our objective for the fiscal year 2005 Budget request is to move
    forward with Naval Power 21. This budget builds upon the foundation
    laid in the fiscal year 2004 program and reaffirms our commitment to
    remain globally engaged today while developing future technology to
    ensure our future military superiority. We are also continuing to
    emphasize the Department's commitment in the areas of combat
    capability, people, technology insertion and improved business
    practices. With our fiscal year 2005 Budget request we are committed to
    executing this vision.

                CY 2003 OPERATIONAL SUCCESSES (A NATION AT WAR)

        The extraordinary capability of our joint forces to project power
    around the world in support of vital national objectives was
    demonstrated over the last year. The maritime contribution to our
    success in the defeat of Saddam Hussein's Baathist forces, as well as
    in support of other joint engagements in the Global War on Terrorism,
    was significant. The rapid deployment and the warfighting capability of
    your Naval force in the liberation of Iraq provided an example of the
    importance of readiness and the responsive capabilities to support our
    Nation's objectives in an era of unpredictability and uncertainty. The
    demonstrated importance of our multi-dimensional Naval dominance, our
    expeditionary nature, our ability to deal with complex challenges, and
    adaptability of our forces are illustrative of the high level of return
    on investment of your Naval force.
        The accomplishments of this past year tell the Naval forces
    readiness story and its return on investment. The ships, aircraft,
    weapon systems, and readiness you funded provided our Sailors and
    Marines the tools necessary to remain the premiere maritime and
    expeditionary combat ready force. In preparing for and conducting
    operations in the Iraq Theater, speed of expeditionary operations and
    sustainment were important military competencies. Naval forces applied
    dominant, persistent, decisive and lethal offensive power in support of
    coalition warfighting objectives. The speed, agility, flexibility and
    persistence of Naval combat capability helped end a regime of terror
    and liberate a people during OIF.
        The past year has been one of significant accomplishment. Our men
    and women operating in the air, on and under the sea, and on the ground
    are at the leading edge in the Global War on Terrorism. As in OEF, we
    once again have demonstrated Naval forces' unique value in contributing
    to the security of our Nation and our friends and allies.
      --During OIF, more than 50 percent of our force was forward deployed.
            The deployment of seven Carrier Strike Groups (CSGs) and eight
            large deck amphibious ships proved our ability to be both a
            surge and a rotational force demonstrating our flexibility and
            responsiveness.
      --Navy and Marine Corps aircraft flew more than 8,000 sorties and
            delivered nearly 9,000 precision-guided munitions.
      --Over 800 Tomahawk cruise missiles were fired from 35 coalition
            ships, one-third of which were launched from submarines. The
            highest number of TLAM's launched in one day occurred on March
            21, 2003--nearly 400 Tomahawks.
      --Navy Special Forces, MCM, EOD and coalition counterparts cleared
            more than 900 square miles of water, ensuring the safe passage
            of critical humanitarian relief supplies to the Iraqi people.
      --Marines from the I Marine Expeditionary Force (I MEF), supported by
            Sea Basing concepts, made one of the swiftest combat advances
            in history. They fought 10 major engagements, destroying nine
            Iraqi divisions in the 450 mile advance into Iraq.
      --Eleven Maritime Prepositioned Force (MPF) ships provided equipment
            and sustainment for over 34,000 Marines and Sailors and
            fourteen amphibious ships embarked and delivered another 12,000
            Marines and Sailors and their equipment.
        Since the end of major combat operations, Naval forces have been
    instrumental in supporting the coalition's goals of security,
    prosperity and democracy in Iraq. Coalition maritime forces have
    diligently supported the United Nations Security Council Resolution
    1483. They have queried over 6,000 vessels, boarded close to 3,500 and
    diverted approximately 430. These forces have confiscated and returned
    to the Iraqi people approximately 60,000 barrels of fuel. Additionally,
    seaward protection of the Al Basara Oil Terminal (ABOT) is enabling the
    generation of critically needed oil revenue. Since re-opening, the ABOT
    has pumped 261,500,000 barrels of oil valued at over $7.5 billion.
        Navy Seabees and Marine Engineers, as the I MEF Engineer Group,
    undertook construction initiatives that built and repaired major
    roadways and bridges, and completed major utility restoration projects.
    In all, 150 projects valued at $7.1 million were completed.
        Naval Explosive Ordnance Disposal (EOD) forces are working with
    Army counterparts in support of the coalition forces and Iraqi Police
    and are collecting over 2,000 pounds of unexploded ordnance per week.

                NAVY AND MARINE CORPS TODAY (CURRENT READINESS)

        Today's Naval forces exist to control the seas, assure access, and
    project power beyond the sea to influence events and advance American
    interests. Navy and Marine Corps forces continue to lead the way to
    secure the peace by responding with speed, agility, and flexibility.
    The value of Naval forces continues to be demonstrated through the
    projection of decisive, persistent, joint power across the globe. The
    investment in training, maintenance, parts, ordnance, flying hours,
    steaming days, and combat ready days coupled with our forward presence
    and our ability to surge has positioned Naval forces as the most
    effective and efficient military force.
        Congress' investment in readiness over the past several years has
    paid large dividends for Naval forces during OIF. With combat forces
    operating in two fronts in the GWOT our readiness investments have
    resulted in enhanced Naval forces ready to strike on a moment's notice,
    anywhere, anytime. Our success in deploying 9 out of 12 aircraft
    carriers and 10 out of 12 big deck amphibious ships to major combat
    areas of operation in demanding environments is attributable to the
    continued improvements in current readiness.
        The Department is in the process of re-deploying Navy and Marine
    forces in preparation for Operation IRAQI FREEDOM II. Navy and Marine
    Forces will deploy in two seven-month rotations with the first
    beginning this month. This initial ground rotation will include about
    25,000 Marines, 3,500 Marine Reservists, over 5,000 active duty Navy
    and 800 Naval Reservists.
        Since the return of our forces from OIF we have invested heavily in
    constituting the Navy and Marine Corps Team for the next fight.
    Continued successful programmed investment will ensure we have the most
    capable forces to face the unique challenges ahead. The fiscal year
    2005 Budget continues a broad range of modernization and readiness
    initiatives for Naval forces.
    Acquisition Programs
        The Fleet and Marine forces continue to take delivery of the most
    sophisticated weapon systems in the world. In 2003, the Navy launched
    the first of two new classes of ships, USS VIRGINIA (SSN 774) and USS
    SAN ANTONIO (LPD 17), commissioned the aircraft carrier USS RONALD
    REAGAN (CVN 76), and continued timely delivery of the ARLEIGH BURKE
    Class guided missile destroyers and F/A-18 E/F Super Hornets.
        We are continuing to build on previous budgets to ensure we equip
    and train our forces to help us continue to meet the challenges of the
    future. What the DON budget will buy to advance our vision in Naval
    Power 21:
        Shipbuilding.--The fiscal year 2005 to fiscal year 2009
    shipbuilding rate of 9.6 battle force ships per year is up from 8.4
    battle force ships per year for the same period in fiscal year 2004.
    The fiscal year 2005 Budget request closes the procurement gap and with
    the exception of a slight reduction in fiscal year 2006, provides an
    upward trend through the FYDP, procuring 17 battle force ships by
    fiscal year 2009. The fiscal year 2005 to fiscal year 2009 investment
    is an average of $13 billion per year in new construction. The fiscal
    year 2005 to fiscal year 2009 plan also procures three Maritime Pre-
    positioned Force (Future) (MPF(F)) ships and a MPF(F) aviation variant.
    While our build rate drops to six in fiscal year 2006, this is a
    reflection of a shift to the next generation surface combatants and sea
    basing capabilities.
        The Navy has nine new ships and one SSBN refueling requested in the
    fiscal year 2005 budget, as well as substantial shipyard/conversion
    work. This investment includes:
      --3 DDG's ($3.4 billion)
      --1 VIRGINIA Class submarine SSN-774 ($2.5 billion)
      --1 LPD-17 ($967 million)
      --2 T-AKE ($768 million)
      --1 DD(X) ($221 million) (RDT&E funded)
      --1 Littoral Combat Ship (LCS) ($108 million) (RDT&E funded)
      --1 SSBN conversion/refueling ($334 million).
        Fiscal year 2005 marks the final year of DDG 51 procurement,
    bringing to closure a 10-ship fiscal year 2002 to fiscal year 2005 MYP
    contract awarded in fiscal year 2002. The Navy will move to the DD(X)
    and LCS hulls as quickly as possible. In addition to vitally needed new
    capability, these ships will increase future shipbuilding rates.
    Investment in these platforms will also help maintain critical
    industrial bases.
        The Department is modernizing its existing submarine with the
    latest technology while, at the same time, continuing to replace aging
    fast attack submarines with the new VIRGINIA Class submarine. The
    VIRGINIA Class design is complete and the lead ship (SSN 774), will
    commission on schedule. Fiscal year 2004 funded the first of five
    VIRGINIA Class submarines under a MYP contract. The second submarine of
    the MYP contract is funded in fiscal year 2005. Consistent with
    Congressional approval of five year-five ship MYP authority (fiscal
    year 2004 to fiscal year 2008) for SSN 774, the Navy is maintaining one
    submarine per year through fiscal year 2008.
        The DON accelerated one LPD from fiscal year 2006 to fiscal year
    2005 leveraging fiscal year 2004 advanced procurement resources
    provided by Congress. The lead ship detail design has been completed
    and lead ship construction is over 80 percent complete with a
    successful launch in July 2003. Production effort is focused on a
    November delivery. The LPD 17 Class ship represents our commitment to a
    modernized expeditionary fleet.
        The fiscal year 2005 Budget request also provides for procurement
    of two auxiliary cargo and ammunition ships (T-AKEs) in the National
    Defense Sealift Fund. These will be the seventh and eighth ships of the
    class. Lastly, the fiscal year 2005 Budget request accelerates the lead
    MPF(F) from fiscal year 2008 to fiscal year 2007 to reflect an emphasis
    on sea basing capabilities.
        DD(X) is a centerpiece to the transformational 21st Century Navy
    and will play a key role in the Naval Power 21 strategic concept. This
    advanced warship will provide credible forward Naval presence while
    operating independently or as an integral part of Naval expeditionary
    forces. The DD(X) lead ship design and initial construction contract
    will be awarded in fiscal year 2005.
        Conversion and Modernization.--The fiscal year 2005 Budget request
    proposes advanced procurement funds for the USS CARL VINSON (CVN 70)
    Refueling Complex Overhaul (RCOH), now scheduled to begin in fiscal
    year 2006. CVN 70 has sufficient reactor fuel for one additional surge
    deployment.
        Funding for the TICONDEROGA Class cruiser modernization effort
    began in fiscal year 2004 and continues in fiscal year 2005. The
    cruiser modernization effort will substantially increase the service
    life and capability of CG 47 Class ships. The conversion will reduce
    combat system and computer maintenance costs, replace obsolete combat
    systems, and extend mission relevance service life. Fiscal year 2005
    will fund advanced procurement items for the first cruiser
    modernization availability in fiscal year 2006.
        Funding is included in fiscal year 2005 to complete the conversion
    of the third and the overhaul of the fourth hull of four OHIO Class
    SSBNs to SSGNs. The SSGN conversion provides a covert conventional
    strike platform capable of carrying up to 154 Tomahawk missiles. The
    fiscal year 2006 Budget request will complete the conversion of the
    last SSGN. All four of these transformed platforms will be operational
    by CY 2007.
        Aircraft Production.--Consistent with the fiscal year 2004 program,
    the fiscal year 2005 Budget request reflects continued emphasis on re-
    capitalizing our aging aircraft. Our focused efforts to aggressively
    ``shore up'' operational readiness by providing requisite funding for
    our Flying Hour Program, Ship Depot Maintenance, Ship Operations, and
    Sustainment, Re-capitalization and Modernization accounts continue.
    While we continue to make substantial investments in readiness accounts
    and working capital accounts, we identified the resources to procure
    104 aircraft in fiscal year 2005. The Department's aircraft procurement
    plan emphasizes replacing costly legacy platforms with more efficient
    and capable integrated systems. This has resulted in significant
    investments in transformational aircraft and program investments across
    the spectrum of aviation capabilities. Such valuable investments in
    more capable aircraft have allowed a reduction of 40 aircraft from
    fiscal year 2005 to fiscal year 2009.
        During the past year, we continued to enjoy the fruits of our
    aviation investments with the successful first deployment and
    operational employment of the F/A-18 E/F Super Hornet in support of
    OIF. Highly praised for tactical capability and platform reliability,
    the F/A-18 E/F program has been funded to provide a transformational
    radar, helmet mounted sight, advanced targeting pod and integrated
    weapons system improvements. Additionally, we recently awarded a second
    MYP contract that includes the EA-18G airframe to replace the Navy's
    aging EA-6B beginning in fiscal year 2009.
        All helicopter missions continue to be consolidated into the MH-60R
    and MH-60S airframes. These helicopter platforms are the cornerstone of
    Navy helicopter concept of operations designed to support the CSG and
    ESG in various mission areas.
        The Department significantly increases the funding requested for
    MMA. MMA will provide the Navy with strategic blue water and littoral
    capability by re-capitalizing the P-3 Maritime Patrol Aircraft broad
    area anti-submarine, anti-surface, maritime and littoral Intelligence,
    Surveillance and Reconnaissance (ISR) capability.
        Progress continues towards delivering a high-quality aircraft to
    the Marines and Special Forces including increasing capability and
    interoperability of the aircraft, investing to reduce production costs,
    and maximizing production efficiency. Since the resumption of V-22
    flight-testing, in May 2002, the V-22 is satisfying the threshold
    levels for all its key performance parameters and reliability and
    maintainability measures. V-22 test pilots have recorded more than
    1,100 flight hours since that time. The V-22 program will continue Low
    Rate Initial Production (LRIP) until the Milestone III decision
    expected late CY 2005.
        The Department will continue to procure the AH-1Z/UH-1Y. These
    aircraft meet the Marine Corps' attack and utility helicopter
    requirements by providing increased aircraft agility, airspeed, range,
    and mission payload. They provide numerous capability improvements for
    the Marine Corps, including increased payload, range and time on
    station, improved sensors and lethality, and 85 percent component
    commonality. The KC-130J MYP is funded and supported in this budget.
    The advantages include an all digital cockpit that reduce aircrew
    manning requirements, a new propulsion system that provides more cargo
    capability, and increased fuel delivery.
        Mine Warfare Programs.--In keeping with the Department's goal to
    achieve an organic mine warfare capability in 2005, the budget request
    supports the development and procurement of five organic airborne
    systems integrated into the MH-60S helicopter: the AQS-20A Mine-hunting
    System, the Airborne Laser Mine Detection System (ALMDS), the Airborne
    Mine Neutralization System (AMNS), the Rapid Airborne Mine Clearance
    System (RAMICS), and the Organic Airborne and Surface Influence Sweep
    (OASIS) system. The fiscal year 2005 Budget request also supports the
    development and procurement of the Remote Minehunting System (RMS)
    integrated into DDG-51 hulls 91-96, and the Long-term Mine
    Reconnaissance System (LMRS) integrated into SSN-688. The ALMDS, AQS-
    20A, and RMS will reach an initial operating capability in fiscal year
    2005. The budget request supports the transition of assault breaching
    technologies into acquisition, which will provide a capability to
    detect, avoid, and defeat mines and obstacles in the surf and craft
    landing zones. In fiscal year 2005, we will continue with our Surface
    Mine Countermeasures (MCM) mid-life upgrade plan. We have initiated a
    product improvement program for the engines of the MCM-1 AVENGER Class
    mine countermeasure ships to enhance their reliability and
    availability. We are upgrading our minesweeping capability with new
    acoustic generators and magnetic sweep cables, and have programmed
    resources to replace our maintenance-intensive mine neutralization
    system (AN/SLQ-48) with an expendable mine neutralization system.
        Munitions.--The Standard Missile (SM) program replaces ineffective,
    obsolete inventories with the procurement of more capable SM-2 Block
    IIIB missiles. The Rolling Airframe Missile (RAM) program continues
    procurement of the improved guided missile launching system and the
    upgraded Block I missile, providing an enhanced guidance capability
    along with a helicopter, air and surface mode. In addition to SM and
    RAM, the fiscal year 2005 Budget request provides funding to continue
    production of the Evolved Sea Sparrow Missile (ESSM) and will support
    the first Full Rate Production (FRP) contract award of 82 United States
    and 288 international missiles. We have committed to replenish our
    precision munitions inventories and to do so, we will utilize a five-
    year MYP to maximize the quantity of Tomahawk missiles procured.
        Marine Corps Expeditionary Capability.--The Expeditionary Fighting
    Vehicle (EFV), formerly the Advanced Amphibious Assault Vehicle (AAAV),
    will provide surface assault elements the requisite operational and
    tactical mobility to exploit opportunities in support of joint
    operations. The EFV will be capable of carrying a reinforced Marine
    rifle squad at speeds in excess of 20 nautical miles per hour from over
    the horizon in sea state three. Once ashore, the EFV will provide
    Marine maneuver units with a world-class armored personnel carrier
    designed to meet the threats of the future. Production representative
    vehicle procurement occurred in fiscal year 2003 and will deliver in
    fiscal year 2005. IOC will be released in fiscal year 2008 and FOC in
    2018.
        Also critical to Marine Corps transformation efforts is the Joint
    Lightweight 155 mm Howitzer (LW-155). This system will enter FRP in
    fiscal year 2005, and our budget includes a request for a Joint Marine
    Corps--Army MYP. Another transformational component of the fiscal year
    2005 Budget, the High Mobility Artillery Rocket System (HIMARS), will
    continue LRIP delivery.
    Alignment
        The DON is transforming to dramatically reduce operating and
    support costs. Changes will embrace efficiency and result in increased
    effectiveness and a higher readiness standard in concert with the
    overarching goals of the President's Management Agenda. We have made
    several fleet and shore organizational changes that have shown great
    potential in maximizing the way forces can be employed and supported.
        Fleet Response Plan (FRP).--FRP provides a model for a new joint
    presence concept that will transform how the U.S. military is employed.
    It refines maintenance, training, and readiness processes in order to
    increase the number of combat ready ships and aircraft throughout the
    Fleet. FRP ensures six employable Carrier Strike Groups (CSGs) always
    are ready to respond to a crisis, plus two additional CSGs capable of
    deploying to the fight within 90 days of notification (``6+2''). With
    the implementation of FRP, half of the Fleet either could be deployed
    or postured to surge, able to arrive swiftly with the overpowering
    combat power needed either to deter or defeat the hostile intentions of
    an adversary, or to win decisively in combat against a significant
    enemy.
        TacAir Integration.--The Navy and Marine Corps Team embarked on a
    Tactical Aircraft Integration plan that will enhance our core combat
    capabilities and provide a more potent, cohesive, and affordable
    fighting force. The culmination of a long-term effort to an increased
    level of readiness from the resources given to us, TacAir integration
    seeks to generate a greater combat capability from Naval TacAir.
    Through TacAir integration, the Department will reduce the number of
    tactical aircraft (JSF and F/A-18) from 1,637 to 1,140 aircraft by
    2021. This integration will provide increased combat capability forward
    and is in concert with enhanced sea basing concepts. A cornerstone of
    this plan is the global sourcing of the Department's TacAir assets and
    the funding and maintenance of legacy aircraft at the highest level of
    readiness until they are replaced by the JSF and the Super Hornet (F/A-
    18 E/F).
        Training Resource Strategy (TRS).--TRS was developed to provide
    high quality training to our deploying combat forces. The training of
    our high technology force in modern warfare has shifted to a network of
    existing ranges and installations stateside. Fully implemented, TRS has
    resulted in more training options, reduced pre-deployment training
    transit time, and has increased productive training days. The USS
    ENTERPRISE was the first CSG to deploy under the TRS, utilizing six
    training ranges, each unique to the successful completion of her
    qualification. TRS supports the FRP and will quickly respond to surge
    requirements by delivering and bringing to bear a capable fighting
    force.
        Current and future readiness requirements underscore the continued
    need for realistic training and maximized use of training and testing
    ranges. While we continue to find ways to enhance readiness through
    increased use of information technology and simulation, live training
    on actual ranges and training areas remains critical during the
    essential phases of the training cycle. Maintaining training realism
    and access to these ranges has been of keen concern to our Naval
    forces. We continue to balance the need to maintain a ready and capable
    force with the need to be sensitive to environmental and encroachment
    issues.
        For the last two years, Congress has addressed critical Navy needs
    regarding encroachment. Readiness-specific changes to the Marine Mammal
    Protection Act (MMPA), Endangered Species Act, and Migratory Bird
    Treaty Act will help the Navy meet training and operational needs. The
    Navy and Marine Corps has and will continue to demonstrate leadership
    in both its military readiness role and as an environmental steward of
    the oceans we sail and the lands we train upon. We are pursuing
    opportunities for acquiring land buffers adjacent to our training
    lands. We are implementing the Integrated Natural Resources Management
    Plans prepared under the Sikes Act to address endangered species
    concerns in lieu of designating critical habitats. We will continue
    operational actions to minimize harm to marine mammals, as we continue
    investments in research into marine mammal biology and behaviors. The
    Marine Mammal Protection Act is due for reauthorization in this
    legislative cycle. To maintain our military readiness, your support is
    necessary to retain the proper balance between environmental protection
    and military readiness during the reauthorization debate.
        Carrier Strike Group (CSG)/Expeditionary Strike Group (ESG).--CSG
    alignment is complete and the first Pacific Fleet Expeditionary Strike
    Group (ESG-1), centered on the USS PELELIU Amphibious Ready Group and
    the embarked Marines of the 13th Marine Expeditionary Unit (Special
    Operations Capable), is completing an eight month deployment. The Navy
    deployed an Atlantic Fleet ESG, the USS WASP Amphibious Ready Group,
    last month.
        The ESG adds to the ARG/MEU, a robust strike, anti-air, anti-
    surface, and anti-subsurface capability of a cruiser, destroyer,
    frigate and attack submarine and for the first time, the Advanced
    Swimmer Delivery System (ASDS). These combined capabilities give the
    Combatant Commander a wider variety of options and enables independent
    operations in more dynamic environments.
        Vieques/NSRR closure.--The former training ranges on Vieques have
    been closed and the property has been transferred to the Department of
    the Interior (DOI), Fish and Wildlife Service. We have active clean-up
    and range clearance programs underway at disposal sites on both East
    and West parcels. We are working with the appropriate agencies to
    negotiate a Federal Facilities Agreement governing clean-up activities.
    We are refining costs to complete clean-up estimates for range areas
    and resolve litigation issues filed by the residents of Vieques. We
    will close Naval Station Roosevelt Roads by March 31, as directed by
    the Fiscal Year 2004 Defense Appropriations Act. Naval Activity Puerto
    Rico will serve as the caretaker organization following operational
    closure. Puerto Rico has established a Local Redevelopment Authority,
    and we will proceed quickly to property disposal.
        Commander Navy Installations Command (CNI).--We have aligned all
    Navy shore installations under a single command that will allow us to
    make better decisions about where to invest limited funds. By
    consolidating all base operations worldwide and implementing common
    support practices the Navy expects to save a substantial amount of
    money over the next six years.
    Communications
        FORCEnet will provide the overarching framework and standard
    communication mechanism for future combat systems. Navy Open
    Architecture, in conjunction with the FORCEnet standards, will provide
    a common open architecture for warfare systems aboard surface,
    subsurface and selected airborne platforms such as the E-2C Advanced
    Hawkeye. A critical subset application already being procured is the
    Cooperative Engagement Capability (CEC), which will be installed on 38
    ships and 4 squadrons (16 aircraft) by fiscal year 2006. CEC includes
    robust data communication capability among cooperating units in support
    of sensor netting. In the future, CEC will also include a Joint Track
    Manager to create a single integrated air picture of sufficient quality
    to support fire control application for each combat control system.
        Navy Marine Corps Internet (NMCI) is operational and providing
    commercial IT services for more than 300,000 DON employees and two
    Combatant Commanders. To date, we have ordered 330,000 of the expected
    345,000 fiscal year 2004 seats. Implementing NMCI has enabled us to
    increase the security posture of our networks and has given
    unprecedented visibility into IT costs. As we roll out NMCI we are
    doing away with the over 1,000 separate networks that the Navy used to
    run. We have reduced the number of legacy applications in the Navy's
    inventory from 67,000 to about 31,000 and begun further efforts to
    reduce this number to around 7,000--an almost 90 percent reduction. As
    we proceed with NMCI, we anticipate other opportunities for progress in
    areas such as enterprise hosting, software release management, IT
    resource analysis and technology insertion.
        We have designed the NMCI Operational Evaluation to provide
    critical information necessary to determine how well NMCI is supporting
    mission of the user and to judge how well service level agreement
    metrics measure the service. As part of the spiral development process,
    NMCI worked with the testing community to segment the testing effort
    into a local evaluation of Network Services and a higher-level
    assessment of other Enterprise Services. Testing was completed December
    15, 2003; the Final Report is due in April.
           navy and marine corps in transformation (future readiness)
        The Chief of Naval Operations and Commandant of the Marine Corps
    consider the culture of transformation integral to the development of
    future combat capabilities. Innovative capabilities will result in
    profound increases in military power, maintaining the Navy and Marine
    Corps Team as the preeminent global Naval power. We are now at the
    point of delivering on many of our transformational goals.
        We have embraced a vision in how Naval forces will contribute to
    joint warfighting in the future. This vision can only be implemented
    with the support of Congress. This section describes the principal
    components of Naval Vision 21.
    Acquisition Programs
        The fiscal year 2005 Budget request supports continued funding for
    accelerated development of several critical technologies into the CVN
    21 lead ship. This transformational 21st Century ship, the future
    centerpiece of the Navy Carrier Strike Group, will bring many
    significant changes to the Fleet. These changes include a new
    electrical power generation and distribution system, the electro-
    magnetic aircraft launching system, a new enlarged flight deck, weapons
    and material handling improvements, and a crew reduction of at least
    800. Construction of the CVN 21 remains on track to start in fiscal
    year 2007.
        Critical components of Sea Power 21 are the DD(X) and LCS. These
    ships, designed from the keel up to be part of a netted force, are the
    centerpieces of the 21st Century surface combatant family of ships.
    DD(X) will be a multi-mission combatant tailored for land attack. LCS
    is envisioned to be a fast, agile, relatively small and affordable
    combatant capable of operating against anti-access, asymmetric threats
    in the littorals. The FYDP includes $2.76 billion to develop and
    procure modular mission packages to support three primary missions of
    mine countermeasures, anti-submarine warfare, and anti-terrorism and
    force protection. Detail design and construction of the first LCS is
    planned to begin in fiscal year 2005.
        The V-22 Osprey, a joint acquisition program, remains a top
    aviation acquisition priority. The V-22's increased capabilities of
    range, speed, payload and survivability will generate truly
    transformational tactical and operational opportunities. With the
    Osprey, Naval forces operating from the sea base will be able to take
    the best of long-range maneuver and strategic agility, and join it with
    the best of the sustainable forcible-entry capability. LRIP will
    continue until the Milestone III decision is made late CY 2005. We
    expect to move from LRIP to FRP in CY 2006.
        Another important joint program with the Air Force, the JSF has
    just completed the second year of a 10-11 year development program. The
    program is working to translate concept designs to produce three
    variants. This is a complex process requiring more initial development
    than we predicted. JSF development is experiencing typical challenges
    that affect System Development and Demonstration (SDD) program schedule
    and cost. LRIP was deferred and research and development increased to
    cover SDD challenges. The current issues are solvable within the normal
    process of design fluctuation, and have taken prudent steps necessary
    to meet these challenges.
        The plan to re-capitalize the P-3 Maritime Patrol Aircraft with the
    MMA was further refined this past year in collaboration with the Broad
    Area Maritime Surveillance-Unmanned Aerial Vehicle or BAMS-UAV program.
    With a MMA IOC of fiscal year 2013, we also developed a robust
    sustainment plan for the current P-3 that includes special structural
    inspections and kits that extend the platform service life by a minimum
    of 5,000 hours. Additionally, the Department has decided to join the
    Army's Aerial Common Sensor (ACS) program as the replacement platform
    for the aging EP-3.
        In order to maintain Electronic Warfare (EW) superiority, the
    Department is pursuing both upgrades in current Airborne Electronic
    Attack (AEA) capability as well as a follow-on AEA aircraft to replace
    the aging EA-6B. The Navy has selected the EA-18G as its follow-on AEA
    aircraft and will begin to replace Navy EA-6Bs in fiscal year 2009.
        Continuing an emphasis on transformational systems, the Department
    has budgeted R&D funding through the FYDP for several aviation
    programs. The Advanced Hawkeye (previously known as E-2 Radar
    Modernization Program (RMP)) is funded through the FYDP with the first
    production aircraft in fiscal year 2009. A fully automated digital
    engine control and improved generators have been incorporated into the
    aircraft to improve performance and reliability. Additionally, the
    Department has included funding to support procurement of required
    capabilities in the Fleet, such as Advanced Targeting Forward Looking
    Infra-Red and the Joint Helmet Mounted Cueing Systems.
        The fiscal year 2005 Budget continues to demonstrate the
    Department's commitment to developing, acquiring and fielding
    transformational UAV technologies for Intelligence, Surveillance and
    Reconnaissance and tactical missions. The budget includes funding for a
    second Joint Unmanned Combat Air System (J-UCAS) demonstrator and
    continues development of the BAMS. The Navy's Unmanned Combat Air
    Vehicle (UCAV-N) is incorporated into J-UCAS under a DOD joint program
    office.
        Helicopters.--The fiscal year 2005 Budget request includes an
    incremental approach to developing a replacement for the current aging
    Presidential helicopter. The Presidential Helicopter Replacement
    Aircraft (VXX) will enhance performance, survivability, communications,
    navigation and executive accommodations inherent in the existing fleet
    of Presidential airlift helicopters.
        Ballistic Missile Defense.--The fielding of a National Ballistic
    Missile Defense capability is critical to protecting the U.S. homeland
    against the evolving ballistic missile threat. As part of the
    President's Directive to accelerate the fielding of a BMD Initial
    Defensive Operations capability by September 2004, the Navy will
    deploy, on a continuous basis, a DDG to serve as a Long-Range
    Surveillance and Tracking (LRS&T) platform. Additionally, Aegis
    Ballistic Missile Defense (ABMD) continues its development and testing
    of the SM-3 missile in order to support deployment of a sea-based mid-
    course engagement capability by December 2005. Since November 2002,
    ABMD had two of three successful intercepts with the SM-3 Block
    missile. The Navy is also evaluating the benefits associated with
    developing a Sea-based Terminal Missile Defense capability. A viable
    regional and terminal sea based ballistic missile defense system is
    important to ensure the safety of U.S. forces and the flow of U.S.
    forces through foreign ports and air fields when required.
        FORCEnet/Navy Open Architecture/Space/C\4\I.--FORCEnet is the
    operational construct and architectural framework for Naval warfare in
    the Information Age which integrates warriors, sensors, networks,
    command and control, platforms and weapons into a networked,
    distributed combat force, scalable across the spectrum of conflict from
    seabed to space and sea to land. FORCEnet is the core of Sea Power 21
    and Naval Transformation, and is the USN/USMC vehicle to make Network
    Centric Warfare an operational reality. It is being implemented in
    coordination with transformation initiatives in the Army, Air Force,
    and Coast Guard--enhancing efficiency, joint interoperability, and
    warfighting effectiveness. DD(X), LCS, CVN-21, SSGN, VIRGINIA Class
    SSN's, SAN ANTONIO Class LPD's, and MMA are examples of platforms that
    are being designed from inception to perform in the netted environment
    of the future. Systems being procured and produced under the FORCEnet
    concept are CEC, Naval Fires Network (NFN) and Airborne/Maritime/Fixed
    (AMF) Joint Tactical Radio System (JTRS).
        The Navy is engineering a single open architecture for all warfare
    systems called Navy Open Architecture. Future systems will be designed
    to this architecture while legacy systems will be migrated to that
    single architecture where it is operationally and fiscally feasible.
    This integrates the Command and Control and Combat systems information
    flow using open specifications and standards and open architecture
    constructs, to support FORCEnet and other global information networks.
    Further, this significantly reduces the development and maintenance
    costs of computer programs. The Navy and its Joint Service partners
    continue to jointly engineer the Joint Track Manager and plan to
    implement it into Navy Open Architecture as the Open Architecture Track
    Manager. This joint focused application will be populated in all Naval
    warfare systems that conform to the single OA warfare system
    architecture.
        The Navy and Marine Corps continues to pursue the maximum use of
    space to enhance our operational capabilities. We look to leverage
    existing systems and rapidly adapt emerging technology. For example,
    the Navy has long been the leader in ultrahigh frequency (UHF)
    satellite communications (SATCOM). The Navy is the executive agent for
    the next generation UHF SATCOM system. This program, the Mobile Users
    Objective System, will be the system used by all DOD components for
    their UHF communications needs.
        Sea Basing and Strategic Sealift.--Sea Basing is a transformational
    operating concept for projecting and sustaining Naval power and a joint
    force, which assures joint access by leveraging the operational
    maneuver of sovereign, distributed, and networked forces operating
    globally from the sea.
        The Sea Basing concept has been endorsed by the other military
    services and its importance was confirmed when DOD announced a Joint
    Sea Basing Requirements Office will soon be established. Central to the
    staying power of Naval forces will be the Maritime Pre-positioned
    Force-Future MPF(F). The fiscal year 2005 Budget accelerates the lead
    MPF(F) from fiscal year 2008 to fiscal year 2007 to reflect an emphasis
    on Sea Basing capabilities.
    Infrastructure
        Prior Rounds of Base Realignment and Closure (BRAC).--The
    Department of the Navy completed the closure and realignment of
    activities from the 1988, 1991, 1993 and 1995 rounds of BRAC. All that
    remains is to complete the environmental cleanup and property disposal
    on all or portions of 23 of the original 91 bases. We have had
    significant successes on both fronts. We are successfully using
    property sales as a means to expedite the disposal process as well as
    recover the value of the property for taxpayers. We sold 235 acres last
    year at the former Marine Corps Air Station, Tustin, California on the
    GSA internet web site for a net $204 million. We sold 22 acres at the
    former Naval Air Facility Key West, Florida in January 2004 for $15
    million. The City of Long Beach, California opted to pre-pay its
    remaining balance on a promissory note, and gave us $11 million to
    conclude its purchase of the former Naval Hospital Long Beach,
    California. We are applying all funds to accelerate cleanup at
    remaining prior BRAC locations. More property sales are planned that
    will be used to finance remaining prior BRAC cleanup actions. Of the
    original 161,000 acres planned for disposal from all four prior BRAC
    rounds, we expect to have less than seven percent (or about 11,000
    acres) still to dispose by the end of this fiscal year.
        BRAC 2005.--The Fiscal Year 2002 Defense Authorization Act
    authorized another round of BRAC in 2005. We will scrupulously follow
    the process laid out in the law. We will treat each base equally and
    fairly, whether considered for closure or realignment in the past or
    not. In no event will we make any recommendations concerning any
    closures or realignment of our bases until all the data has been
    collected, certified and carefully analyzed within the overall BRAC
    2005 statutory framework.
        BRAC 2005 gives us the opportunity to transform our infrastructure
    consistent with the significant changes that are, and will be,
    happening with the transformation of our force structure. The Secretary
    of Defense is leading a process to allow the military departments and
    defense components to closely examine joint use opportunities. Military
    operations in Afghanistan and Iraq demonstrated the force multiplier
    benefits of joint operations. We will apply those approaches to our
    shore infrastructure. We will look beyond the traditional stovepipes of
    Navy bases and Marine Corps bases in BRAC 2005 and take a joint
    approach matching military requirements against capacity and
    capabilities across the Department of Defense.
        The added benefit is the opportunity to eliminate excess capacity
    and seek greater efficiencies in our shore infrastructure. Continuing
    to operate and maintain facilities we no longer need diverts precious
    resources from our primary mission. Resources freed up as a result of
    this process will be used to re-capitalize our ships, aircraft,
    equipment and installations for the future.
        Better Business Practices.--The DON has implemented several
    continuous improvement initiatives consistent with the goals of the
    President's Management Agenda that enable realignment of resources in
    order to re-capitalize.
        Specific initiatives include: converging our Enterprise Resource
    Planning (ERP) pilots into an end-to-end operating system;
    incorporating proven world class efficiency methodologies such as Six
    Sigma and Lean concepts into our day-to-day operations; and
    implementing additional Multi-Ship/Multi-Option (MSMO) repair contracts
    and Performance Based Logistics (PBL) agreements. Of note, Lean
    efficiency events that concentrate on increasing velocity and
    productivity in our Aviation Intermediate Maintenance Departments
    (AIMD) were initiated on USS GEORGE WASHINGTON (CVN 73) and USS HARRY
    TRUMAN (CVN 75). The outcome of these events will allow us to improve
    our afloat AIMD processes and influence our future manning requirements
    on CVN 21 Class carriers. These are the first Lean events conducted on
    Navy warships.
        These continuous improvement initiatives enable us to increase our
    combat capabilities with the expectation that we become more efficient,
    agile, flexible and reliable at a reduced cost of doing business.

               OUR TOTAL FORCE (SAILORS, MARINES, AND CIVILIANS)

        Today more than other time in recent history our Sailors and
    Marines have a greater understanding and appreciation for service to
    country. In time of war they have shown the Nation the highest
    standards of military professionalism and competence. The heaviest
    burdens in our war on terror fall, as always, on the men and women of
    our Armed Forces. We are blessed as a Nation to have a 228-year legacy
    where magnificent men and women volunteer to protect and defend
    America. Sailors and Marines--along with our civilian workforce--remain
    the strong and steady foundation of our Naval capabilities.
    Active Duty
        The Navy and Marine Corps again met enlisted recruiting and
    accession goals in 2003, and continue to attract America's finest young
    men and women to national service. The Navy achieved recruiting goals
    for a fifth consecutive year and in February completed the 31st
    consecutive month of attaining goals for accessions and new contracts.
    The Marine Corps met its eighth year of meeting monthly and annual
    enlisted recruiting goals and its thirteenth year of success in officer
    recruiting. Both Services are well positioned for success in meeting
    2004 officer and enlisted accession requirements.
        During 2003, the Navy implemented a policy requiring 94 percent of
    new recruits be high school diploma graduates (HSDG), and Navy
    recruiters succeeded by recruiting 94.3 percent HSDG. Navy Recruiting
    continued to seek the best and brightest young men and women by
    requiring that 62 percent of recruits score above 50 on the AFQT; Navy
    recruiters excelled with a rate of 65.7 percent. Navy recruiting also
    sought to increase the number of recruits with college experience in
    fiscal year 2003, recruiting more than 3,200 applicants with at least
    12 semester hours of college.
        The Marine Corps accessed 97.1 percent High School Diploma
    Graduates in fiscal year 2003, exceeding their annual goal of 95
    percent and ensured the Marine Corps recruited the highest quality
    young men and women with 70.3 percent of Marine Corps recruits scoring
    over 50 on the AFQT. This achievement exceeded their annual goal of 60
    percent of accessions scoring above 50 on the AFQT. The Marine Corps
    began fiscal year 2004 with a 58.8 percent starting pool in the Delayed
    Entry Program and has continued to achieve its monthly recruiting goals
    during the second quarter of fiscal year 2004. The Marine Corps Reserve
    achieved fiscal year 2003 recruiting goals, assessing 6,174 Non-Prior
    Service Marines and 2,663 Prior Service Marines. Navy Recruiting was
    also successful in Naval Reserve recruiting by exceeding the enlisted
    goal of 12,000 recruits for fiscal year 2003.
        Retention.--Retaining the best and brightest is as important as
    recruiting them. Military compensation that is competitive with the
    private sector provides the flexibility required to meet that
    challenge.
        The Marine Corps has achieved first-term reenlistment goals over
    the past nine years. They have already achieved 79.8 percent of their
    first term retention goal and 59.8 percent of second tour and beyond
    goals. Officer retention is at a 19 year-high.
        Retention in the Navy has never been better. For the third straight
    year, we experienced the highest retention in history. Retention goals
    for all categories were exceeded. As a result, at-sea personnel
    readiness is exceptional and enlisted gaps at sea are at an all-time
    low.
        Notwithstanding our current success in retention, we are constantly
    on alert for indicators; trends and developments that might affect our
    ability to attract and retain a capable, trained and talented
    workforce. We are aware that we need to compete for the best, and
    ensure continuing readiness, through a variety of means including
    effective compensation and bonus programs.
        The Selective Reenlistment Bonus (SRB) remains the primary tool
    available to the Navy and Marine Corps for retaining our best and
    brightest enlisted personnel. SRB represents an investment in the
    future of our Navy and Marine Corps. The Department of the Navy has a
    proven track record in the judicious management of this program and
    other continuation pays used to keep the right force mix to meet the
    nations requirements. Your continued support of the SRB program as a
    proven and highly effective tool is important and appreciated.
        Attrition.--Navy leaders reduced attrition 10 percent from a year
    ago and 33 percent from fiscal year 2000, while Marine Corps First-Term
    Post Boot Camp attrition continues the favorable downward trend begun
    in fiscal year 1999. For the Marine Corps, fiscal year 2003 attrition
    was at a historical low, down 1,773 from the previous year. This drop
    is due largely to a reduction in misconduct and incidents of desertion.
        The Department's ``Zero Tolerance'' drug-use policy continues to be
    strictly enforced, widely disseminated, and supported throughout the
    leadership. Through a comprehensive random drug testing program,
    educational programs, and Command support, the Navy and Marine Corps
    Team achieved an 18 percent reduction in attrition even while testing
    rates increased.
        Training.--The Navy and Marine Corps have defined their respective
    strategies for advancing into the future as part of a Joint Force. The
    Services have developed strategies that clearly define how Navy and
    Marine forces of the 21st Century will be equipped, trained, educated,
    organized and used in our continued efforts to control the seas, to
    project American military influence abroad, and to protect our borders.
        Marine Corps' Strategy 21 defines as its vision and goal the
    development of enhanced strategic agility, operational reach and
    tactical flexibility and enabled joint, allied and coalition
    operations.
        Navy's Sea Power 21 defines its commitment to the growth and
    development of its Service members. Sea Warrior is the ``people'' part
    of Sea Power 21. Its focus is on growing individuals from the moment
    they walk into a recruiting office through their assignments as Master
    Chiefs or Flag Officers, using a career continuum of training and
    education that gives them the tools they need to operate in an
    increasingly demanding and dynamic environment. Transformation for the
    future, leveraging technology and tapping into the genius of our people
    to make them more efficient and effective--creating a single business
    process for the range of human resource management activities is
    exactly what Sea Warrior is all about. Our goal remains attracting,
    developing, and retaining the more highly skilled and educated
    workforce of warriors that will lead the 21st Century Navy.

    Reserves
        Reserves remain an integral part of our Navy and Marine Corps Team.
    The Department of Defense is undergoing a transformation to a more
    responsive, lethal and agile force based on capabilities analysis
    rather than threat analysis. Last July, Secretary Rumsfeld issued a
    memorandum, Rebalancing Forces, in which he directed the Services to
    promote judicious and prudent use of rebalancing to improve readiness
    of the force and to help ease stress on units and individuals. Three
    areas of focus of the Services are: Enhance early responsiveness;
    resolve stressed career fields; and employ innovative management
    practices.
        The Navy recently completed a study focused on redesigning the
    Naval Reserve so that it is better aligned with, and operationally
    relevant to, active forces. Working groups have been chartered to
    implement key points of the study. Implementation has commenced and
    will continue through this year and next. The three main areas of focus
    are Personnel Management, Readiness and Training, and Organizational
    Alignment. The Navy is transforming the Naval Reserve so that it is
    fully integrated with active forces. Reservists are shifting away from
    thinking of ``Naval Reserve requirements'' to ``Navy requirements''--a
    shift that includes goals, capabilities and equipment. The Navy mission
    is the Naval Reserve mission. One Navy, one team, is the message.
        Naval and Marine Corps reservists are filling critical joint and
    internal billets along with their active counterparts. Naval and Marine
    Corps Reserve mobilization is a requirements-driven evolution and
    reservists, trained and ready, are making significant contributions.
    While the numbers of mobilized reservists can fluctuate as GWOT
    requirements dictate, our objective is to keep the number of mobilized
    personnel at a minimum.
        Since September 11, 2001, the Navy has mobilized over 22,000
    reservists with a peak of just over 12,000 during OIF. This is from a
    Selected Reserve population of just over 87,000. Mobilized commissioned
    Naval units include Coastal Warfare, Construction Battalion and
    Aviation communities, while individuals were mobilized primarily from
    Security Group, Naval Intelligence, Law Enforcement and Physical
    Security augment units. We anticipate a steady state of approximately
    2,500 mobilized Naval Reservists this year.
        The Marine Corps has mobilized over 22,000 reservists from an
    authorized Selected Reserve end strength of 39,600 and just over 3,500
    from the Individual Ready Reserve. Currently mobilized reservists
    number just under 6,500. With OIF II requirements, the number of
    mobilized Marine Reservists is expected to increase by approximately
    7,000. OIF II Marines will deploy in two rotations of approximately
    seven months each, augmenting Marine Corps capabilities in Infantry,
    Armor, Aviation, Command, Control, Computers and Intelligence, Military
    Police and Civil Affairs.
    Civilian Personnel
        A large part of the credit for the Navy's outstanding performance
    goes to our civilian workforce. These experienced and dedicated
    craftspeople, researchers, supply and maintenance specialists, computer
    experts, service providers and their managers are an essential part of
    our total Naval force concept.
        In the past, our ability to utilize these skilled human resources
    to accomplish the complex and fast-developing missions of the 21st
    Century has been limited by the requirements of a 19th Century
    personnel system. The fiscal year 2004 Defense Authorization Bill now
    allows DOD to significantly redesign a National Security Personnel
    System (NSPS) for the civilian workforce. This change represents the
    most significant improvement to civilian personnel management since the
    1978 Civil Service Reform Act.
        The DON has volunteered to be in the first wave of conversions to
    NSPS later this year. The Department expects to transition as many as
    150,000 of our dedicated, hard-working civilians to the new system this
    year. We will work closely with DOD to ensure we meet this aggressive
    timeline. We are also working Defense Acquisition Workforce Improvement
    Act streamlining initiatives alongside NSPS to ensure we use these
    tools to produce a robust and capable workforce.
        The reforms will provide supervisors and managers greater
    flexibility in managing our civil service employees, facilitate
    competition for high quality talent, offer compensation competitive
    with the private sector, and reward outstanding service. It will build
    greater pride in the civilian workforce and attract a new generation of
    civilians to public service. Properly executed, these changes also will
    assist us in better utilizing the active duty force by making it easier
    to employ civilians in jobs currently filled by uniformed military
    personnel.
        NSPS legislation will have a transformational effect on
    organizational design across the Department. NSPS will improve
    alignment of the human resources system with mission objectives,
    increase agility to respond to new business and strategic needs, and
    reduce administrative burden. The NSPS Act authorizes a more flexible
    civilian personnel management system that allows us to be a more
    competitive and progressive employer at a time when our national
    security demands a highly responsive system of civilian personnel
    management. The legislation also ensures merit systems principles
    govern changes in personnel management, whistleblowers are protected,
    discrimination remains illegal, and veterans' preference is protected.
    The process for the design of NSPS is specified by statue and covers
    the following areas: job classification, pay banding, staffing
    flexibilities, and pay for performance.
        The foundation for NSPS is a more rigorous tie between performance
    and monetary awards for employees and managers. Basic pay and
    performance incentives should be tied directly to the performance
    measurement process--supervisory personnel are also rewarded for
    successfully performing managerial duties. Implementation of this
    system will be a significant step forward by linking employees'
    performance to mission accomplishment and enabling better management of
    scarce resources throughout the DON.
        We are faced with a monumental change in how we will do business
    and an even larger cultural change from one of entitlement to one that
    has a performance-based compensation. This will be a huge effort and we
    are determined to ensure successful implementation. We will continue to
    scrutinize our human resource business methods. As we implement the
    bold initiatives in NSPS, we will take a hard look at our
    administrative policies with a specific eye on those that are
    burdensome or add no value.

    Quality of Service
        We will continue to provide an environment where our Sailors and
    Marines, and their families have confidence in themselves, in each
    other, in their equipment and weapons, and in the institution they have
    chosen to serve. This year, with your help, we continued the
    significant advances in compensation, in building the structure to
    realize the promise of the revolution in training, in improving
    bachelor and family housing, and in strengthening our partnership with
    Navy and Marine families.
        The Department remains committed to improving living conditions for
    Sailors and Marines, and their families. Our policy is to rely first on
    the private sector to house military families. As a result, along with
    the initiative to increase Basic Allowance for Housing (BAH), the need
    and consequently the inventory for military family housing is going
    down. Additionally, we are partnering with the private sector in
    Public/Private Ventures (PPV) to eliminate inadequate housing.
        At the top of nearly any list put together in our partnership is
    the promise of medical care for Sailors, Marines, and their families.
    Naval medicine is a force multiplier, ensuring our troops are
    physically and mentally ready to whatever challenges lie ahead. High
    quality care and health protection are a vital part of our ability to
    fight the Global War on Terrorism and execute other worldwide mission.
    Naval medicine today is focused on supporting the deployment readiness
    of the uniformed services and promoting, protecting and maintaining the
    health of all those entrusted to Naval Medicine care--anytime,
    anywhere.

    Safety
        The Navy and Marine Corps are working to meet the Secretary of
    Defense's goal of reducing mishaps by 50 percent from fiscal year 2002
    to the end of fiscal year 2005. We have many initiatives in place and
    planned for the near future. We have seen real progress in reducing
    private motor vehicle fatalities, which are down 20 percent from the
    fiscal year 2002 baseline. We have begun applying technologies now used
    in commercial aviation to provide a visual and quantitative feedback
    loop to pilots and mechanics when either the pilot or aircraft has
    exceeded specific safety of flight parameters. We will continue to
    press forward with safety both to take care of people, our most
    precious asset, and to allow us to invest elsewhere.

    Shaping the Force
        The Navy is making an effort to reduce its active duty manpower as
    part of the DON transformation program. This is the first step and an
    integral part of our strategy to properly shape both the officer and
    enlisted force. Today, as the Navy moves to a more efficient and surge-
    ready force, maintaining the correct skill sets is more important than
    ever. We are convinced we can get the job done with fewer people; by
    eliminating excess manpower we can focus better on developing and
    rewarding our high-performing forces. Additionally, reducing manpower
    gradually today will ensure the Navy is properly manned when a new
    generation of optimally manned ships joins our force, with completely
    revised maintenance, training, and war-fighting requirements. We will
    ensure any manpower reductions will be preceded by reductions in
    functions.

                                    SUMMARY

        Naval forces remain a critical and unique element of our national
    security strategy. The Navy and Marine Corps Team answers the
    President's call to duty by being the first on station--with staying
    power. Our forces exploit the open oceans and provide the Combatant
    Commander with persistent sovereign combat Naval forces. This is the
    value that credible forward deployed Naval forces provide our Nation.
        The fiscal year 2005 Budget unifies many of our innovative and
    transformational technologies with Naval Power 21. Sustaining
    investment in Naval forces continues to protect and promote American
    interests by allowing the forward deployed Navy and Marine Corps Team
    to shape the international security environment and to respond to the
    full spectrum of current and future crises.
        With our fiscal year 2005 Budget request we focus on people, combat
    capability, technology insertion, and improved business practices.
    Additionally, we continue to work with our Joint Service partners in
    organizing, equipping and training to fight jointly. With continued
    Congressional support the Department of the Navy will position the Navy
    and Marine Corps Team as part of the most formidable military force in
    the 21st Century.

        Senator Stevens. Admiral Clark.

    STATEMENT OF ADMIRAL VERNON CLARK, CHIEF OF NAVAL
                OPERATIONS
        Admiral Clark. Chairman Stevens, Senator Inouye, and
    distinguished members of the committee, good morning. I, like
    Secretary England, consider it an honor to be with you here
    today, representing all the sailors, both active and reserve,
    and the civilians who are serving in our Navy today.
        I am particularly happy, also, to be here at the table with
    leaders like Secretary England and General Mike Hagee. I'd like
    to report to you that this group has a great partnership,
    working together, leading our Navy and Marine Corps team to the
    future. That's what we see as our task, and we are set out to
    do it.
        Today, and I believe appropriately so, America's focus is
    primarily on the Army and, more so, soon to be the Marine
    Corps, as they execute their missions in Operation Iraqi
    Freedom II. Having said that, I want to report to you that your
    Navy continues to be out and about. And while the Army
    dominates Operation Iraqi Freedom today, we have two carriers
    and three Expeditionary Strike Groups, and fundamentally one-
    third of the Navy, still deployed around the world. Ships and
    submarines, forward deployed on the point representing the
    United States of America. And that includes two of our large-
    deck amphibious ships, the Boxer and the Bataan, who are now
    returning home, after surging forward just a few weeks ago to
    carry Marine Corps aviation assets forward for Operation Iraqi
    Freedom II.
        A year ago this time when I appeared before this committee,
    we were an important part of the joint team that conducted
    major combat operations last spring in Iraq. Lifting the joint
    force, projecting power ashore, and fully 55 percent--Senator
    Cochran, mirroring the numbers that you talked about--55
    percent of our Navy deployed in support of the conflict. No
    other Navy in the world can deliver this kind of decisive
    combat capability. It highlights our fundamental mission, and
    that is to take credible, persistent combat power to the far
    corners of this earth anywhere, anytime we need to do so,
    without a permission slip.
        I appreciate the opportunity, Mr. Chairman, to be here
    today, to appear before you, and to talk about this great Navy,
    and to thank you on behalf of all of our outstanding men and
    women in the uniform, and those that are wearing civilian
    clothes, too, that are working to make our Navy better every
    day. And we are all grateful for the continued strong support
    that is being provided by the Congress that is making our Navy
    ready to respond, ready to act anytime the Nation needs us to
    do so, but also helping us create the Navy of the future, which
    is our fundamental task, also.
        As the Secretary said, our budget request this year is a
    solid and balanced investment plan, the roadmap, as he has
    called it, that focuses on three areas. First, it accelerates
    our investment in Sea Power 21 capability. Second, it delivers
    the right readiness at the right cost, and that's been a key
    factor in our ability to respond this past year. And it
    continues to shape the 21st century workforce. This budget
    includes the next steps in our journey to the future.
        A much more capable Navy is what we're talking about. It
    includes funding for the Littoral combat ship, the DD(X), CVN
    21, the Joint Strike Fighter, unmanned vehicles in the air and
    on the surface and under the sea, the Virginia class submarine
    and the modifications to Trident SSGNs, among others.
        And maybe most importantly today, it lays the foundation
    with LHA(R) and maritime pre-positioned forces, the future for
    the Navy/Marine Corps team. That future is laid down in this
    budget request. And this is a very exciting concept, the next
    step in expeditionary warfare. We stand at the threshold of
    creating the next generation Navy/Marine Corps team, a team
    that will deliver the kind of quick-response, global-reach
    capability that this Nation needs. This budget will help us
    deliver a more responsive Navy. The Fleet Response Plan and a
    readiness assessment process that we are now using has allowed
    us to better assess risk, and allowed us to present a budget
    that delivers the right readiness at the right cost.
        And what this means, unlike previous submissions that I
    have been involved in, is that we have taken more risk--we have
    assessed the risk, and we have taken risk where we believe that
    it is prudent so that we can invest in the new acquisition that
    is required for us to have the Navy of the future. And so I ask
    for your support in this year's readiness request. It will
    deliver the right readiness at the right cost for the Nation.
        Lastly, our request continues to sharpen our investment in
    our people so that we can shape them into the workforce that we
    need for the future. And, of course, in the Navy we recognize
    that every single thing that is good that is happening in the
    Navy is happening because we have been winning the battle for
    people. For all of our advanced technology--and our advanced
    technology is incredible--for the readiness that we have
    achieved, it is still our people that bring our capabilities to
    bear whenever and wherever the Nation needs them.
        But, at the same time, Mr. Chairman, we do recognize the
    cost of manpower. We know that manpower is not free. And I am
    committed to building a Navy that can maximize the capability
    of our people and minimize the total number of people on the
    payroll. And as you can see from this request, and as Senator
    Inouye has indicated, this budget request reduces our end
    strength. Our strategy for doing this is straightforward,
    Senator. We are investing in the growth and the development of
    our people. We are improving training and our maintenance
    processes. We are leveraging technology. We are decommissioning
    older, more manpower-intensive platforms that have less
    capability for the future, and we are rebalancing our reserve
    and active forces. And as we deliver more high-tech ships and
    aircraft, our workforce will intentionally get smarter, but we
    intend for it also to get smaller.
        Your support, over the years, of incentive pay, re-
    enlistment bonuses, and the kind of training and information
    tools that make our people more productive, has been critical
    to our success in the past and is crucial to our ability to
    attract and retain and shape the kind of workforce we need for
    the future.
        I want to report to you that your support for these
    initiatives has been working. We have the highest retention
    that we ever had in the history of the Navy, and we have an
    extraordinarily competitive and talented group of people in our
    Navy. I ask you to continue to give us the tools that we need
    to shape this force for the future. And I look forward to
    discussing this with you in the minutes and hours ahead, and
    the months ahead, as we move toward this budget.
        I close by saying that we have a higher quality Navy and
    Marine Corps team today than at any time that I've witnessed in
    my career, and I believe it's so for a very important reason.
    It is because our sailors feel the support and the confidence
    that is being placed in them by the citizens of the United
    States of America.
        Mr. Chairman, this is a very proud team. They believe in
    the importance of what they are doing. And each of you have
    seen them on the point, and you know how they are reacting to
    the challenges that are being presented to them. And they are
    responding to the signals of support that are being sent to
    them by the citizens of America.

                               PREPARED STATEMENT

        I thank you for your support, and the citizens of America
    for their support, and I look forward to your questions this
    morning.
        Thank you very much.
        Senator Stevens. Thank you very much, Admiral.
        [The statement follows:]

                    Prepared Statement of Admiral Vern Clark

        Mr. Chairman and members of the Committee, I appreciate this
    opportunity to appear before you. I want to express my gratitude for
    the substantial investment you have made in making this Navy the best
    Navy the nation has ever seen.
        Your Navy is built to take credible combat power to the far corners
    of this earth, taking the sovereignty of the United States of America
    anywhere we need to take it and at anytime we choose to do so. It is
    capable of delivering the options this nation needs to meet the
    challenges of today and it is committed to the future capabilities the
    joint force will need to win throughout the 21st century.
        It is a wonderful time to be a part of this Navy and a great
    privilege to be associated with so many men and women--active and
    reserve, uniformed and civilian--committed to the service and defense
    of this nation. I speak for all of our men and women in thanking you
    for your exceptional and continuous support.
       your navy today--projecting decisive joint power across the globe
        Your Navy's performance in Operations ENDURING FREEDOM (OEF) and
    IRAQI FREEDOM (OIF) last year proved--more than anything else--the
    value of the combat readiness in which you have invested. It
    demonstrated the importance of the latest technology in surveillance,
    command and control and persistent attack. It highlighted our ability
    to exploit the vast maneuver space provided by the sea. Most
    importantly, it reaffirmed the single greatest advantage we hold over
    every potential adversary: the genius of young Americans contributing
    their utmost in their service to this nation.
        This past year, the fleet produced the best readiness levels I've
    seen in my career. We have invested billions of dollars to training,
    maintenance, spare parts, ordnance, flying hours and steaming days
    accounts these last few years, and that investment resulted in the
    combat ready response of more than half the Navy to operations
    worldwide.
        Seven aircraft carriers and nine big deck amphibious ships were
    among the 164 U.S. Navy ships forward deployed last spring in support
    of OEF and OIF and contingencies worldwide. The Military Sealift
    Command sailed and chartered more than 210 ships and moved 94 percent
    of the nation's joint and combined capability to the fight. We also
    deployed three Fleet Hospitals, a Hospital Ship, 22 P-3 aircraft, 25
    Naval Coastal Warfare detachments and we mobilized more than 12,000
    reservists.
        OIF and OEF were the most joint operations in our history and they
    have provided the best possible opportunity to dissect, study and
    analyze some of the limiting factors and effects of how we fight.
    Beyond the mere numbers, these operations confirmed that we should
    continue to pursue the capabilities that enhance our power projection,
    our defensive protection and the operational independence afforded by
    the sea.
        While we recognize that we must continue to challenge all of our
    assumptions in a variety of scenarios, our lessons learned indicate
    that the capabilities-based investment strategies, new war fighting
    concepts and enabling technologies we are pursuing in our Sea Power 21
    vision are on the right vector. Let me give you some examples.
      --The reach, precision and persistence of our Sea Strike capability
            added lethality to ground combat engagements in Afghanistan and
            Iraq. The joint surveillance and attack technologies and
            processes that we have already put in place forced enemy combat
            formations to either disband and desert or be destroyed in
            place by precision weapons. Navy aviation generated more than
            7,000 combat sorties in support of OIF, sometimes flying joint
            missions with land-based Air Force tankers more than 900 miles
            from their carriers. Surface combatants and submarines struck
            targets throughout Iraq with more than 800 Tomahawk missiles.
            The initial deployments of new F/A-18E/F Super Hornet squadrons
            greatly extended our range, payload, and refueling options. And
            we will realize more of these capabilities in the future
            through the conversion of the first of four Trident SSBNs into
            the SSGN conventional strike and Special Operations Forces
            platform.
      --USS HIGGINS (DDG 76) provided early warning and tracking to joint
            forces in Kuwait and southern Iraq to help warn forces and
            defend against the threat of theater ballistic missiles. This
            tracking-only capability demonstrated the initial potential of
            extending Sea Shield defenses to the joint force. In a sign of
            things to come, we advanced our missile defense capability with
            another successful flight test of our developmental sea-based
            defense against short-to-medium range ballistic missiles. USS
            LAKE ERIE (CG 70) and USS RUSSELL (DDG 59) combined to acquire,
            track and hit a ballistic test target in space with an SM-3
            missile in support of the Ballistic Missile Defense program.
            This was the fifth success in six tests.
          Our OIF mine warfare efforts cleared 913 nautical miles of water
            in the Khor Abd Allah and Umm Qasr waterways, opening 21 berths
            in the Umm Qasr port and clearing the way for operations in the
            littoral areas of the Northern Persian Gulf and for
            humanitarian aid shipments into Iraq. These operations included
            the use of the High Speed Vessel X1 (JOINT VENTURE), Navy
            patrol craft and six unmanned, autonomous underwater vehicles
            (AUV) directly from our science and technology (S&T) program in
            the littoral for special operations and mine clearance
            operations, and gave us important insights into our vision for
            both future littoral and mine warfare concepts and
            capabilities.
      --We projected joint combat forces across the globe with greater
            speed and agility than we have ever done in the past. Along
            with our number one joint partner, the United States Marine
            Corps, we put more than 60,000 combat-ready Marines ashore in
            Kuwait in 30 days. The Navy's Military Sealift Command
            delivered more than 32 million square feet of combat cargo and
            more than one billion gallons of fuel to the nation's war
            fighters in Operations Enduring Freedom and Iraqi Freedom. We
            were able to sustain the strategic and operational flexibility
            afforded by Sea Basing to generate a three-axis attack on Iraq
            from our dispersed aircraft carriers, surface combatants and
            submarines in the Red Sea, the Mediterranean Sea and the
            Persian Gulf.
          We forged ahead in our shipbuilding investments. We awarded three
            preliminary design contracts for the Littoral Combat Ship
            (LCS), leading to the construction of the first LCS in fiscal
            year 2005. We selected the baseline design for the DD(X) 21st
            Century multi-mission destroyer, launched SAN ANTONIO (LPD 17),
            christened VIRGINIA (SSN 774) and began fabrication of MAKIN
            ISLAND (LHD 8) and LEWIS AND CLARK (T-AKE 1).
      --In OIF, we were able to know more, decide faster and act more
            decisively than ever before. Our three-axis, multi-platform
            attack from the Persian Gulf, Red Sea and Mediterranean Sea--as
            well as the geometric increases in striking power, defensive
            protection and speed of maneuver generated by our joint
            forces--is made possible by the power of joint command,
            control, communications, computers, intelligence, surveillance
            and reconnaissance (C\4\ISR). Fully eighty percent of targets
            struck with precision ordnance were unknown at aircraft launch.
            We developed and installed CENTRIX and COWAN networks to
            enhance joint and coalition interoperability on all of our
            deploying ships, and we also promulgated the FORCEnet campaign
            plan, defining the architecture and standards that will help us
            further integrate warriors, sensors, weapons, and platforms.
        These accomplishments this past year have taught us more about who
    we are and where we're headed. We know that the combat power of the
    truly joint force is much more than the sum of the services'
    contributions. We understand the value of readiness and the importance
    we must place on improving the fleet's ability to respond and surge
    with decisive combat power. We relearned the lesson that over flight
    and basing is not guaranteed; our dominance of the maritime domain and
    our consequent ability to quickly deliver an agile combat force is a
    priceless advantage for our nation. And we reaffirmed that our people
    are now, and always will be, the root of our success.

                YOUR NAVY TOMORROW--ACCELERATING OUR ADVANTAGES

        Readiness, advanced technology, dominance of the maritime domain,
    and the genius of our people--these are our asymmetric advantages. They
    are the core of our Sea Power 21 Navy and we intend to accelerate these
    advantages over the coming year. We are in a position to continue to
    build upon and recapitalize these strengths, to innovate and
    experiment, and to push the envelope of operational art and
    technological progress. Our ability to project persistent, sovereign
    combat power to the far corners of the earth now and in the future
    depends on it.
        In last year's statement, I discussed principally the advantages
    brought by advanced technology and the vast maneuver area of the sea in
    our Sea Power 21 vision.
        This year, I'd like to spend a few moments on the efforts we've
    taken to improve our other advantages: our readiness to respond to the
    nation's defense needs and the tools we'll need to ensure the right
    people for our Sea Power 21 Navy.
        Today's naval forces and personnel are superbly trained and well
    provisioned with ordnance, repair parts and supplies. They are ready
    earlier--for a longer period of time--and they are deploying at a
    higher state of readiness than ever before. In short, the Navy the
    nation has paid for is truly ready to accomplish its missions and it is
    more ready to do so than I've ever seen it in my career.
        I mentioned the results; in OIF, we surged more than half the fleet
    to fight half a world away. The combined power of our forward presence
    forces and those that we were able to surge overseas helped keep our
    enemies on the run. This conflict and our analysis of future campaign
    scenarios make it apparent that the readiness of both our forward
    forces and the forces that must surge forward will be critically
    important to our future. It is no longer good enough to be able to
    surge just once every ten years or so.
        The war on terrorism and the unpredictability of the global
    security environment make this an immediate imperative. The nation
    needs a Navy that can provide homeland defense and be both forward and
    ready to surge forward to deliver overmatching and decisive combat
    power whenever and wherever needed. We are committed to do so.
        With this in mind, we launched the Fleet Response Plan (FRP) this
    past year. The FRP resets the force in a way that will allow us to
    surge about 50 percent more combat power on short notice and at the
    same time, potentially reduce some of the personnel strain of forward
    rotations.
        In simplest terms, rather than having only two or three CSGs
    forward-deployed and properly equipped at any one time--and an ability
    to surge only a maximum of two more--the FRP enables us to now
    consistently deliver six forward deployed or ready to surge Carrier
    Strike Groups (CSGs) almost immediately, plus two additional CSGs in
    the basic training phase in 90 days or less. This FRP capability is
    commonly known as six plus two.
        To do this, we have fundamentally reconfigured our employment
    policy, fleet maintenance, deployment preparations and fleet manning
    policies to expand the operational availability of non-deployed fleet
    units. We have shifted the readiness cycle from one centered solely on
    the next-scheduled-deployment to one focused on returning ships to the
    right level of readiness for both surge and deployed operations. The
    net result is a fleet that is more ready, with more combat power--more
    quickly--than was possible in the past.
        Our forward rotations remain critically important to our security,
    to strengthening alliances and coalitions, and to the global war on
    terrorism. But it is clear we must make these rotations with purpose,
    not just to fill the calendar.
        For example, implementing the new Proliferation Security Initiative
    to counter weapons of mass destruction as a tool for terrorists and
    their sponsors is likely to involve the use of forward naval forces in
    maritime interdiction. Additionally, we plan to be ready to establish
    Initial Missile Defense operations using forward-deployed ARLEIGH BURKE
    class guided missile destroyers and their AEGIS systems in Long-Range
    Tracking and Surveillance roles. And of course, we will continue to
    provide Combatant Commanders with the combat-credible, rapidly
    employable forward forces required for the nation's defense.
        But at the same time, we recognize that our ability to rapidly
    surge significant additional combat power and provide a range of joint
    employment options is critically important to the swift and decisive
    combat operations that must be our future. The FRP allows us to do just
    that.
        We have an obligation to accurately assess the readiness needs and
    create the resources necessary to support this FRP capability. This has
    also been a major focus this past year.
        Readiness is a complex process. It is much more than a count of our
    end strength, our ordnance and spares, and the number of hours and days
    spent training. It is the product of our ability to deliver the
    required effects needed to accomplish the mission. We know too that
    readiness at any cost is unacceptable; as leaders we must achieve and
    deliver the right readiness at the right cost.
        The Integrated Readiness Capability Assessment (IRCA) was developed
    for the fiscal year 2005 budget to more carefully examine our readiness
    processes. Starting with our new FRP operating construct, we took a
    hard look at everything that we needed to have on hand and what we
    needed to do to deliver the required combat readiness for the nation's
    needs.
        The IRCA assessment helped us understand the collective
    contributions of all the components of readiness, accurately define the
    requirements, align the proper funding and provide a balanced
    investment to the right accounts. It improved our visibility into the
    true requirements and it gave us a methodology to assess and understand
    both acceptable and unacceptable risks to our current readiness
    investments.
        The end result is this: we have carefully defined the readiness
    requirement. We have identified areas where we can streamline or cease
    activities that do not add to readiness. And we have requested the
    funds our commanders need to create the right readiness for fiscal year
    2005. I ask for your support of this year's current readiness request
    as we've re-defined these processes and already taken acceptable risks.
    We will deliver the right readiness at the right cost to the nation.
        These improvements to our operational availability of forces and
    the associated readiness elements will not be made on the backs of our
    people.
        We have a smart, talented cadre of professionals who have chosen a
    lifestyle of service. Our ability to challenge them with meaningful,
    satisfying work that lets them make a difference is part of our
    covenant with them as leaders.
        A new operating concept like the Fleet Response Plan could not be
    made if we still had the kind of manpower-intensive mindset to problem
    solving we had even five years ago. But today, thanks to your sustained
    investment in science and technology among others, we have already
    realized some of the advancements in information technology,
    simulators, human system integration, enterprise resource planning,
    web-enabled technical assistance and ship and aircraft maintenance
    practices that can reduce the amount of labor intensive functions, the
    training and the technical work required to ensure our readiness.
        These advances speak to our larger vision for our Sea Power 21 Navy
    and its Sea Warrior initiative. Our people are today's capital assets.
    Without them, all the advanced weaponry in the world would sit dormant.
    But at the same time, it is the effects they deliver that are the true
    measure of their contribution to readiness and capability.
        We have long had a force stove-piped into active and reserves,
    uniformed and civilian, sea and shore, and enlisted and officer
    components, all with work driven largely by the limits of industrial
    age military capabilities, personnel practices, technology and the
    organizational models of the day.
        In today's era, when we have whole corporations bought or sold just
    to capture the intellectual capital of an organization, we recognize
    that our human resource strategy must capture the talents and efforts
    of our capital as well. Our vision for the future is a more truly
    integrated workforce wholly committed to mission accomplishment. This
    must include a total force approach that can functionally assess
    missions, manpower, technology and training and produce an enterprise-
    wide resource strategy.
        The principles of this strategy are clear. We will capture the work
    that contributes to mission accomplishment. We will define enterprise-
    wide standards. We will leverage technology to both enhance and
    capitalize on the growth and development of our people. We will
    streamline organizational layers. We will instill competition. And we
    will incentivize the talents and behaviors needed to accomplish the
    mission.
        There is still much to study and discuss as we develop our total
    force approach in the months and years ahead, but we can already see
    that the application of these principles will help us more accurately
    define our manpower requirement and lead us to a smaller workforce in
    the future.
        The benefits are enormous. Our people will be powerfully motivated
    and better educated and more experienced in the coming years. They will
    be properly equipped to maintain, operate and manage the higher
    technology equipments that are our future. Our combat capabilities will
    continue to grow.
        We must be committed to building a Navy that maximizes the
    capability of its people while minimizing the total number in the
    manpower account. Manpower is never free; in fact, manpower we do not
    truly need limits both the true potential of our people and the
    investments needed to transform our combat capability for the future.
        Our developing human resource strategy will likely require changes
    in the way we recruit, assess, train, manage and balance the workforce
    in the years to come. Sea Warrior of course, is crucial here. Last
    year's authorization of the National Security Personnel System (NSPS)
    is very important to such an effort as well. The NSPS Act authorized a
    more flexible civilian personnel management system that allows DOD to
    be a more competitive and progressive employer. The Navy has
    volunteered to be in the first wave of conversions to NSPS because it
    will facilitate the kind of competition and performance we need in the
    21st century.
        In the near future, we will need to look at improving the two-way
    integration of our active and reserve force. At a time when our ability
    to surge is more important to the nation than ever, we must ensure our
    Navy reserves have the kind of future skills, front-line equipment,
    training standards and organizational support that will facilitate
    their seamless integration into required combat and support structures.
        Most importantly, I believe we will need the kinds of flexible
    authorities and incentive tools that will shape the career paths and
    our skills mix in a way that lets us compete for the right talent, not
    just within the Navy, but with all the nation's employers as well.
        In the months ahead, I will continue to discuss with you our
    developing human resource strategy and the kinds of authorities we'll
    need to deliver on it.
        We are beginning to realize the powerful war fighting capabilities
    of Sea Power 21. Our culture of readiness and our commitment to
    developing a 21st Century workforce will help us employ those
    transformational capabilities to achieve unprecedented maritime power.

                      OUR FISCAL YEAR 2005 BUDGET REQUEST

        This past year our Navy's budget request continued our effort to
    sustain our current readiness gains, deepen the growth and development
    of our people and invest in our transformational Sea Power 21 vision
    while harvesting the efficiencies needed to fund and support these
    three critical priorities. This year we intend to:
      --Deliver the right readiness at the right cost to support the war on
            terror and the nation's war fighting needs,
      --Shape the 21st century workforce and deepen the growth and
            development of our people,
      --Accelerate our investment in Sea Power 21 to recapitalize and
            transform our force and improve its ability to operate as an
            effective component of our joint war fighting team.
        At the same time, we will continue to pursue the Sea Enterprise
    improvements that make us a more effective Navy in both fiscal year
    2005 and beyond. Our Navy budget request for fiscal year 2005 and the
    future supports this intent and includes:
      --Nine new construction ships in fiscal year 2005, including
            construction of the first transformational destroyer (DD(X))
            and the Littoral Combat Ship (LCS), the acceleration of a SAN
            ANTONIO Class Amphibious Transport Dock Class ship from fiscal
            year 2006 to fiscal year 2005, and one SSBN conversion and
            refueling. Our request this year includes the following ships:
          --3 ARLEIGH BURKE Class Guided Missile Destroyers (DDG)
          --1 VIRGINIA Class submarine (SSN)
          --1 SAN ANTONIO Class Amphibious Transport Dock (LPD)
          --2 Lewis and Clark Class Dry Cargo and Ammunition ships (T-AKE)
          --1 21st Century Destroyer (DD(X))
          --1 Littoral Combat Ship (LCS), and
          --1 SSBN conversion/refueling
          The investment plan across the future year's defense plan (FYDP)
            also includes three Maritime Prepositioned Force (Future) (MPF
            (F)) ships and advanced procurement for an MPF (F) aviation
            variant. While our build rate dips to six ships in fiscal year
            2006, this is a reflection of a shift in focus to the next
            generation surface combatants and sea basing capabilities. We
            have also assessed the risks and divested several assets that
            have high operating costs and limited technological growth
            capacity for our transformational future; this includes
            decommissioning two coastal mine hunter ships, and the
            accelerated decommissioning of the remaining SPRUANCE-class
            destroyers, SACRAMENTO Class Fast Combat Store Ships and the
            first five TICONDEROGA-class guided missile cruisers in the
            future year's plan.
      --Procurement of 104 new aircraft in fiscal year 2005, including the
            F/A-18 E/F Super Hornet, the MH-60 R/S Seahawk and Knighthawk
            Multi-mission Combat Helicopter, the T-45 Goshawk training
            aircraft and the Marine Corps MV-22 Osprey among others. We
            continue to maximize the return on procurement dollars through
            the use of multi-year procurement (MYP) contracts for
            established aircraft programs like the Super Hornet and we have
            increased our research and development investment this year in
            the Joint Strike Fighter (JSF), the EA-18G Airborne Electronic
            Attack (AEA) aircraft and the broad area anti-submarine, anti-
            surface, maritime and littoral intelligence, surveillance and
            reconnaissance (ISR) capable Multi-mission Maritime Aircraft
            (MMA).
      --Investment in transformational unmanned underwater vehicles (UUV)
            like the Long-Term Mine Reconnaissance System, and unmanned
            aviation vehicles (UAV) such as the Broad Area Maritime
            Surveillance UAV and the Joint-Unmanned Combat Air System. The
            budget also requests funding for experimental hull forms like
            the X-Craft, and other advanced technologies including the
            Joint Aerial Common Sensor (JACS).
      --A 3.5 percent basic pay raise, and a reduction in average out-of-
            pocket housing costs from 3.5 percent to zero, allowing Sailors
            and their families more of an opportunity to own their own
            homes and have more of a stake in their communities.
      --Investment in housing and Public-Private Ventures that will help
            eliminate inadequate barracks and family housing by fiscal year
            2007 and enable us to house shipboard Sailors ashore when their
            vessel is in homeport by fiscal year 2008.
      --Readiness investment that supports the Fleet Response Plan (FRP),
            including sustained funding for ship and aircraft operations,
            aviation depot maintenance, and precision guided munitions.
            This includes improvements in ship maintenance and training
            scheduling to maximize surge capabilities.

    Delivering the Right Readiness at the Right Cost
        To me, the ``right readiness'' is the return on your investment in
    the Navy. Readiness is the catalyst that brings combat power to bear
    whenever it is needed. Achieving readiness at any cost however is not
    good for the nation. This year's request accurately defines our
    readiness needs, assesses the risks to our investment and--as
    requested--will deliver the resources necessary for leaders in the Navy
    to create the required readiness.
      --Ship Operations and Flying Hours requests funds for ship operations
            OPTEMPO of 51.0 days per quarter for our deployed forces and 24
            days per quarter for our non-deployed forces. We have properly
            funded the flying hour account to support the appropriate
            levels of readiness and longer employability requirements of
            the FRP. This level of steaming and flying hours will enable
            our ships and air wings to achieve the required readiness over
            the longer periods defined by the Fleet Response Plan, and as a
            result, it will improve our ability to surge in crisis and
            sustain readiness during deployment.
      --Ship and Aviation Maintenance. We have made significant
            improvements these last few years by reducing major ship depot
            maintenance backlogs and aircraft depot-level repair back
            orders; improving aircraft engine spares; adding ship depot
            availabilities; ramping up ordnance and spare parts production;
            maintaining steady ``mission capable'' rates in deployed
            aircraft; fully funding aviation initial outfitting; and
            investing in reliability improvements.
          Our fiscal year 2005 request continues to improve the
            availability of non-deployed aircraft and meets 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. We are
            making great strides in improving the visibility and cost
            effectiveness of our ship depot maintenance program, reducing
            the number of changes in work package planning and using our
            continuous maintenance practices when changes must be made.
      --Shore Installations. Our Facilities Sustainment, Restoration and
            Modernization (SRM) program remains focused on improving
            readiness and quality of service for our Sailors. While our
            fiscal year 2005 Military Construction and Sustainment program
            reflects difficult but necessary trade-offs between shore
            infrastructure and fleet recapitalization, the majority of the
            SRM trends are very good. Facilities sustainment has increased
            in fiscal year 2005. Our budget request keeps us on a course to
            achieve the DOD goal of a 67-year recapitalization rate by
            fiscal year 2008, achieve DON goals to eliminate inadequate
            family and bachelor housing by fiscal year 2007 and provides
            Homeport Ashore Bachelor Housing by fiscal year 2008. We are
            exploring innovative solutions to provide safe, efficient
            installations for our service members, including design-build
            improvements, and BRAC land sales via the GSA Internet.
            Additionally, with the establishment of Navy Installations
            Command, we have improved our capability to manage our
            dispersed facility operations, conserve valuable resources,
            establish enterprise-wide standards and continue to improve our
            facility infrastructure.
      --Precision Guided Munitions receive continued investment in our
            fiscal year 2005 request with emphasis on increasing the Joint
            Stand-Off Weapon (JSOW) baseline variant, Joint Direct Attack
            Munition (JDAM), and Tactical Tomahawk (TACTOM) inventory
            levels, while the JSOW penetrator variant enters full-rate
            production. We have also entered into a Common Missile program
            with the U.S. Army to replace the aging inventory of TOW,
            Maverick and Hellfire missiles. Joint partnerships with the Air
            Force and Army in several of our munitions programs continue to
            help us optimize both our inventories and precious research and
            development investments and will remain a focus for us in the
            future.
      --Training Readiness. We continue to make significant strides in this
            critical area. In fiscal year 2004, the Congress supported two
            important programs to advance our training readiness. First,
            you endorsed the Training Resource Strategy (TRS), to provide
            more complex threat scenarios and to improve the overall
            realism and value of our training. Additionally, you funded the
            Tactical Training Theater Assessment and Planning Program to
            provide for a comprehensive training range sustainment plan.
            Our fiscal year 2005 budget continues this work. We are working
            to make the Joint National Training Capability a reality. We
            have established a single office to direct policy and
            management oversight for all Navy ranges as well as serve as
            the resource sponsor for all training ranges, target
            development and procurement, and the Navy portion of the Major
            Range Test Facility Base (MRTFB).
      --Environmental Readiness. In the last two years, Congress has
            provided significant legislative relief from encroachment and
            environmental requirements by amending the Endangered Species
            Act, the Migratory Bird Treaty Act and the Marine Mammal
            Protection Act. These amendments help to balance environmental
            stewardships and realistic military training. We will continue
            to focus the use of our ranges on military training, and remain
            committed to our environmental obligations through integrated
            natural resource management plans. We will make every effort to
            protect marine mammals while ensuring our Sailors are properly
            trained and our transformational systems are properly tested.
            We look forward to demonstrating our ongoing commitment to
            environmental stewardship.

    Shaping the 21st Century Workforce
        At the heart of everything good in our Navy today is this: we are
    winning the battle for people. Higher quality recruits, historic
    retention rates, innovative incentive pay pilots, reduced attrition,
    competitive reenlistments and detailing, and outstanding leadership in
    the ranks has made this the highest quality workforce the Navy has ever
    seen.
        In 2003 specifically, we exceeded all of our aggregate retention
    goals for the third straight year; our recruiters reached their quotas
    for the 28th consecutive month; we reduced attrition another 10 percent
    from fiscal year 2002 levels; and, through decommissioning older,
    manpower-intensive platforms, improving training and employment
    processes, and more efficient infrastructure organization, we have
    reduced gaps at sea to less than 1,000, down from 18,000 gaps just six
    years ago.
        These accomplishments will help us develop the 21st Century
    workforce we'll need for our Sea Power 21 Navy. As our Navy becomes
    more high tech, so must our workforce. Our people will be a more
    educated and experienced group of professionals in the coming years,
    and we must properly employ their talents. We will spend whatever it
    takes to equip and enable these outstanding Americans, but we do not
    want to spend one extra penny for manpower we do not need.
        As part of that effort, we continue to pursue the kind of new
    technologies and competitive personnel policies that will streamline
    both combat and non-combat personnel positions, improve the two-way
    integration of active and reserve missions, and reduce the Navy's total
    manpower structure. To that end, we are proposing a fiscal year 2005
    Navy end strength reduction of 7,900 personnel.
        We will use existing authorities and our Perform to Serve program
    to preserve the specialties, skill sets and expertise needed to
    continue the proper balancing of the force.
        We intend to build on the growth and development momentum of the
    last three record-breaking years. We are fully committed to ensuring
    every Sailor has the opportunity and resources to successfully compete.
    Our goal remains attracting, developing, and retaining the most highly
    skilled and educated workforce of warriors we have ever had, to lead
    the 21st century Navy.
        As I testified last year, Sea Warrior is designed to enhance the
    assessment, assignment, training and education of our Sailors.
        Our fiscal year 2005 budget request includes the following tools we
    need to enhance mission accomplishment and professional growth:
      --Innovative personnel employment practices are being implemented
            throughout the fleet. Optimal manning experiments in USS BOXER
            (LHD-4), USS MILIUS (DDG 69) and USS MOBILE BAY (CG 53)
            produced revolutionary shipboard watch standing practices,
            while reducing overall manning requirements and allowing
            Sailors to focus on their core responsibilities. The fleet is
            implementing best practices from these experiments to change
            Ship Manning Documents in their respective classes. Optimal
            manning means optimal employment for our Sailors.
          We have our fourth crew aboard USS FLETCHER (DD 992) and our
            third crew aboard USS HIGGINS (DDG 76) in our ongoing Sea Swap
            initiative. This has saved millions of dollars in transit fuel
            costs and increased our forward presence without lengthening
            deployment times for our Sailors. FLETCHER and HIGGINS will
            return to San Diego this year after a period of forward
            deployed operations of 22 months and 17 months respectively. We
            will continue to assess their condition and deep maintenance
            needs to develop and apply lessons learned to future Sea Swap
            initiatives.
      --Selective Reenlistment Bonus (SRB). Targeted bonuses such as SRB
            are critical to our ability to compete for our highly trained
            and talented workforce both within the Navy and with employers
            across the nation as well. Proper funding, adequate room for
            growth and the flexible authorities needed to target the right
            skills against the right market forces are important to the
            shape of the workforce. This program specifically targets
            retention bonuses against the most critical skills we need for
            our future. We ask for your continued support and full funding
            of this program.
      --Perform to Serve (PTS). Last year, we introduced PTS to align our
            Navy personnel inventory and skill sets through a centrally
            managed reenlistment program and instill competition in the
            retention process. The pilot program has proven so successful
            in steering Sailors in overmanned ratings into skill areas
            where they are most needed that the program has been expanded.
            More than 2,400 Sailors have been steered to undermanned
            ratings and approved for reenlistment since the program began
            last February and we will continue this effort in 2005.
      --Assignment Incentive Pay (AIP) is a financial incentive designed to
            attract qualified Sailors to a select group of difficult to
            fill duty stations. AIP allows Sailors to bid for additional
            monetary compensation in return for service in these locations.
            An integral part of our Sea Warrior effort, AIP will enhance
            combat readiness by permitting market forces to efficiently
            distribute Sailors where they are most needed. Since the pilot
            program began last June, more than 1,100 AIP bids have been
            processed resulting in 238 Sailors receiving bonuses for duty
            in these demanding billets. We ask for continued support of
            this initiative.
      --Professional Military Education (PME). We are taking a more
            comprehensive approach to the education of our people than we
            have done in the past. We are in the process of developing a
            PME continuum that integrates general education, traditional
            Navy-specific Professional Military Education (NPME), and Joint
            Professional Military Education (JPME) curricula. This will
            allow us to develop a program that fully incorporates all
            aspects of our professional and personal growth and development
            training needs. Improvements so far include establishing
            networks with civilian educational institutions, developing new
            degree programs, and establishing partnerships with other
            services' institutions. We are also expanding opportunity
            through distance learning and the Internet. We are committed to
            broadening the professional and intellectual horizons of both
            our officers and our enlisted men and women to prepare them to
            operate tomorrow's fleet and assume key naval and joint
            leadership roles.
      --Human Performance Center (HPC) has been established to apply Human
            Performance and Human System Integration principles in the
            research, development and acquisition processes. In short, the
            HPS will help us understand the science of learning. They will
            ensure training is driven by Fleet requirements and they will
            focus requirements on the performance needed to carry out our
            missions. This will eliminate potential performance and
            training deficiencies, save money and help us improve our
            readiness.
      --The Integrated Learning Environment (ILE) is the heart of our
            Revolution in Training. ILE is a family of systems that, when
            linked, will provide our Sailors with the ability to develop
            their own learning plans, diagnose their strengths and
            weaknesses, and tailor their education to support both personal
            and professional growth. They will manage their career
            requirements, training and education records. It will match
            content to career requirements so training is delivered at the
            right time. Most importantly, these services will be provided
            anytime, anywhere via the Internet and the Navy-Marine Corps
            Intranet (NMCI).
        We are taking advantage of every opportunity to accelerate the
    tools we need to develop our 21st Century workforce. The improvements
    and pilots that Congress has supported--including bonuses, pay table
    adjustments, retirement reforms, better medical benefits, and our Sea
    Warrior initiatives--are having the desired impact.
        Your support of our fiscal year 2005 request for a 3.5 percent
    basic pay raise, for our efforts to transform our manpower structure in
    some fundamental ways, and for a reduction in average out-of-pocket
    housing costs from 3.5 percent to zero will have a direct effect on our
    ability to properly size and shape the 21st century workforce that is
    our future.

    Accelerate Our Investment in Sea Power 21
        As I testified last year, Sea Power 21 defines the capabilities and
    processes that the 21st century Navy will deliver. We now have an
    opportunity to accelerate the advantages that our vision for a joint,
    netted and sea-based force provides this nation, thanks to the
    tremendous investments that you have made in our battle for people, in
    the quality of service for each of our Sailors, and in readiness.
        This year, we will pursue distributed and networked solutions that
    could revolutionize our capability. We will focus on the power of Sea
    Basing and our complementary capability and alignment with our number
    one joint partner, the U.S. Marine Corps. We will sustain a robust
    science and technology program, and we will exploit investments made in
    joint research and development wherever possible.
        For example, we are urgently pursuing technical advances to support
    our Sailors, Soldiers, Airmen and Marines in Iraq. The Naval Sea
    Systems Command and the Office of Naval Research are working closely
    with all services, government agencies, industry, and academic and
    government laboratories to identify, test, and deploy promising
    technologies that can counter improvised explosive devices (IEDs),
    snipers, suicide bombers and other force protection threats. We are
    also pursuing other quick-reaction technology initiatives such as
    persistent wide-area surveillance using small Unmanned Aerial Vehicles,
    blue force tracking technology, body armor and extremity protection. We
    are committed to ensuring that the joint force on the ground is as
    equipped as they possibly can be to accomplish their mission.
        Our highest priority programs within each of the core capability
    sets that define our Sea Power 21 vision.
        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 maximize our sea basing capability and minimize as
    much as possible our reliance on shore-based support nodes. To do this,
    we will make doctrinal, organizational and operational changes mandated
    by this concept and by the underlying technology that makes it
    possible. We have an opportunity here, along with the U.S. Marine Corps
    and the U.S. Army, to reexamine some of the fundamentals of not only
    how we move and stage ground forces, but how we fight ashore as well.
    Our highest priority Sea Basing investments include:
      --Surface Combatant Family of Ships. As I've already testified, the
            power of joint forces in OIF was in the synergy of individual
            service strengths. The same concept holds true within the Navy
            itself. We seek the synergy of networks, sensors, weapons and
            platforms that will make the joint force greater in combat
            power than the sum of the individual parts. Development of the
            next generation of surface combatants as ``sea frames''--
            analogous to ``air frames''--that are part of a modular system
            is just such an endeavor.
          The surface combatant family of ships allows us to dramatically
            expand the growth potential of our surface combatants with less
            technical and fiscal risk. To bring these concepts to life and
            to take them--and the fight--to the enemy, we have decided upon
            three entirely new ship classes. The first to premier will be
            the Littoral Combat Ship (LCS) in 2007. The advanced strike
            destroyer (DD(X)) will follow in about 2011. And just a few
            years after the first DD(X), the keel will be laid on the first
            CG(X), the next class of cruiser designed from the keel up for
            theater air and ballistic missile defense.
          Our research and development efforts and experimentation with
            high speed and theater support vessels like SWIFT, and the X-
            Craft later this year, are helping us reduce our technical risk
            and apply important lessons in hull design and mission
            modularity to the development of the surface combatant family
            of ships. DD(X) is the heart of the family and will spiral
            promising technologies to both CG(X) and LCS in the future. I
            will discuss each one of these ships in more detail below.
      --CVN 21 is the centerpiece of the Navy Carrier Strike Group of the
            future. It will bring transformational capabilities to the
            fleet, including a new electrical generation and distribution
            system, the electro-magnetic aircraft launching system (EMALS),
            a new/enlarged flight deck, weapons and material handling
            improvements, and a crew reduction of at least 800 personnel.
            It will be able to generate higher daily and sustained sortie
            rates than our NIMITZ-class aircraft carriers. Our fiscal year
            2005 request of $979 million in research and development and
            procurement funding continues the development of CVN 21 and
            several critical technologies in the lead ship, including the
            EMALS prototype and testing already ongoing in Lakehurst, New
            Jersey. Construction of the CVN 21 remains on track to start in
            fiscal year 2007.
      --CVN 70 RCOH. The fiscal year 2005 budget provides advanced
            procurement funds for the USS CARL VINSON (CVN 70) RCOH, now
            scheduled to begin in fiscal year 2006. CVN 70 has sufficient
            reactor fuel for one additional deployment. This action makes
            the best possible use of CARL VINSON's remaining fuel capacity
            and improves shipyard work loading.
      --MPF(F). These future Maritime Prepositioning Ships will serve a
            broader operational function than current prepositioned ships,
            creating greatly expanded operational flexibility and
            effectiveness. We envision a force 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. Our fiscal year
            2005 request accelerates the lead MPF(F) from fiscal year 2008
            to fiscal year 2007 to reflect our emphasis on Sea Basing
            capabilities.
        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 2005 priorities:
      --DD(X). The technology engine for the Fleet, DD(X) is the
            centerpiece of a surface combatant family of ships and will
            deliver a broad range of capabilities. This advanced multi-
            mission destroyer will bring revolutionary improvements to
            precise, time-critical strike and joint fires and our
            Expeditionary Strike Groups of the future.
          Transformational and leap ahead technologies include an electric
            drive and integrated power system; an Advanced Gun System with
            the high rate of fire and precision to reach almost 8 times
            farther and command more than 110 times the area of our current
            five inch 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.
            DD(X) is an enabler both technically and operationally. This
            seaframe will also reduce our seagoing manpower requirements
            and will lower total ownership costs.
          This program will provide a baseline for spiral development of
            technology and engineering to support a range of future
            seaframes such as (CG(X)). It will also enable the
            transformation of our operations ashore. Imagine an Army or
            Marine rifleman on the ground and Navy Petty Officer at sea
            looking at the same real-time picture of enemy troops encamped
            at a municipal airport. With the push of a button, the rifleman
            sends targeting coordinates to the Petty Officer in a DD(X)
            more than 50 miles offshore. Within a few minutes, rounds from
            the AGS start falling on the airport with incredible accuracy.
            That kind of on-demand, persistent time-critical strike will
            revolutionize our joint fire support and ground maneuver
            concepts of operation and it will free our strike fighter
            aircraft for more difficult targets at much greater ranges.
          DD(X)'s all-electric drive, called the Integrated Power System
            (IPS), will not only drive the ship through the water, but will
            also generate the kind of power capacity that will enable
            eventual replacement of the Advanced Gun System (AGS). When
            combined with the physical capacity and volume of the hull
            form, DD(X) could lead us to revolutionary technologies from
            the naval research enterprise like the electromagnetic rail gun
            and directed energy weapons. The fact that rail guns do not
            require any explosives will free up magazine space for other
            mission areas. This capability is projected to be a reality in
            the 2015 to 2018 timeframe. DD(X) will be in service for
            decades after that; having the kind of growth potential to
            install those kinds of technologies dramatically lowers our
            future development costs.
          The funding profile for DD(X) supports the 14,000-ton design and
            the S-Band Volume Search Radar (VSR). Lead ship detail design
            and construction are planned to start in fiscal year 2005.
      --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 JSF has just completed the second year of a 10-
            11 year development program, and is experiencing a variety of
            typical challenges that affect System Development and
            Demonstration (SDD) program schedule and cost. Additional
            design work is required to address technical issues, primarily
            weight projections. The budget therefore realigns $5 billion
            from procurement appropriations in fiscal year 2005 through
            fiscal year 2009, and Low Rate Initial Production was deferred
            one year to fiscal year 2007. The JSF remains vital to our
            future. It will give us the range, persistence and
            survivability needed to keep our strike fighters viable for
            years to come.
      --SSGN. Funding is included in fiscal year 2005 to continue the SSGN
            conversion program. Our future SSGN capability will provide
            covert conventional strike platforms capable of carrying 150
            Tomahawk missiles. The SSGN will also have the capacity and
            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 vehicles to enhance the joint force commander's
            knowledge of the battlespace. The inherently large capacity of
            these hulls will enable us to leverage future payloads and
            sensors for years to come. We still expect our first SSGN to be
            operational in 2007.
      --EA-18G. Last year, you initiated funding at our request to replace
            the aging EA-6B Prowler with the EA-18G Airborne Electronic
            Attack aircraft. Increased EA-6B usage in 2003 has resulted in
            wing center section or outer wing panel fatigue for some 43 EA-
            6B aircraft, making your support last year critical to our
            ability to dramatically accelerate the recapitalization of the
            nation's only joint electronic attack capability. Using the
            demonstrated growth capacity of the F/A-18E/F, the EA-18G will
            quickly recapitalize our Electronic Attack capability at lower
            procurement cost, with significant savings in operating and
            support costs; 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. We
            begin purchasing airframes in fiscal year 2006 and will achieve
            initial operating capability in 2009.
        Sea Shield is the projection of layered, global defensive power.
        Sea Shield will enhance deterrence and war fighting 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 power in the littoral
    and deep inland. 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:
      --Mine Warfare Programs. We intend to field a set of unmanned,
            modular Mine Counter-Measure (MCM) systems employable from a
            variety of host platforms or shore sites to minimize our risk
            from mines and sustain our national economic and military
            access to every corner of the globe. Our future MCM capability
            will be faster, more precise and organic to both Expeditionary
            and Carrier Strike Groups and will ultimately remove both the
            man and our mammals from the minefield. Within the FYDP, we
            expect to reduce the time that it takes to render sea mining
            ineffective by at least half of the time that it takes us
            today.
          Our fiscal year 2005 budget request includes funding to realize
            organic mine warfare capabilities in one Strike Group this
            year, while maintaining the funding necessary for a potent and
            dedicated Mine Countermeasure (MCM) force. We have also
            requested an increase of $167 million across the FYDP for mine
            warfare programs, to include unmanned vehicles such as the
            Long-Term Mine Reconnaissance System (LMRS) to provide a
            clandestine mine reconnaissance capability from our LOS
            ANGELES-class submarines, and the Remote Minehunting System on
            ARLEIGH BURKE-class destroyers (DDGs 91-96). Both of these
            programs are scheduled to reach Initial Operating Capability
            (IOC) milestones this year. Future introduction of the Littoral
            Combat Ship (LCS) with mine warfare mission modules will
            improve the ability of Strike Groups to neutralize mine threats
            in parallel with--not in sequence before--other operations.
      --Littoral Combat Ship (LCS). The role of LCS is to provide access to
            joint forces in the littorals; a capability gap we identified
            as a result of the 2001 Quadrennial Defense Review. During the
            past year and a half, considerable campaign analysis and fleet
            battle experiments have demonstrated that naval forces need
            better ways to fight mines; small, fast, highly armed boats;
            and quiet diesel and advanced air-independent propulsion
            submarines operating in shallow waters. The performance of U.S.
            Navy Patrol Craft and the experimental HSV-X1 JOINT VENTURE in
            the Iraqi littoral was critical to the early detection and
            destruction of the Iraqi mine threat. The same kind of
            capability needs to be delivered in a fast, maneuverable,
            shallow-draft platform that has the survivability to operate
            independently. LCS will have these characteristics, along with
            self-defense, navigation, and command-and-control systems.
          LCS will be built from the keel up to be a part of a netted and
            distributed force, and will be the first ship designed with
            FORCEnet as a requirement. The main battery of LCS will be its
            off-board systems: manned helicopters and unmanned aerial,
            surface and underwater vehicles. It is the off-board vehicles--
            with both sensors and weapons--that will enter the highest
            threat areas. Its modular design, built to open-systems
            architecture standards, provides flexibility and a means to
            rapidly reconfigure mission modules and payloads. As technology
            matures, the Navy will not have to buy a new LCS platform, but
            will upgrade the mission modules or the unmanned systems.
          LCS also will have an advanced hull design and be significantly
            different from any warship that has been built for the U.S.
            Navy. Detail design and construction of the first LCS Flight 0
            ship is planned in fiscal year 2005. The LCS requirements
            process is tailored to support the rapid delivery of two
            flights (Flight 0 and 1) of ships, using an evolutionary,
            ``spiral'' acquisition approach. The spiral development process
            allows time-phased capability improvement for ship and mission
            systems. This incremental development and delivery strategy
            supports the ship's accelerated acquisition schedule, diverse
            threat and capability requirements, and dynamic levels of
            technology push/pull. The ship's modular, open design will also
            enable lifecycle adaptability and affordability. Four LCS's
            have been added since last year's budget plan was submitted.
      --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. We are working
            closely under the authority of the Missile Defense Agency (MDA)
            to deliver this much-needed capability to the nation's
            Combatant Commanders. Our sea-based missile defense programs
            experienced tremendous success on the test range this year,
            scoring two of three intercepts. Continued development and
            testing will support Initial Defensive Operations beginning in
            the fall of 2004, with select ARLEIGH BURKE-class destroyers
            providing Long Range Surveillance and Tracking to the nation's
            capability late this year.
      --Multi-mission Maritime Aircraft (MMA)--Broad Area Maritime
            Surveillance (BAMS). We significantly increased this year's
            research and development funding for the Multi-Mission Aircraft
            to recapitalize our 1950's-era Lockheed ``Electra'' based P-3
            force. Our acquisition plan was further refined this past year
            with the integration of the Broad Area Maritime Surveillance-
            Unmanned Aerial Vehicle (BAMS-UAV) program into the overarching
            Maritime Patrol and Armed Reconnaissance requirement. This
            lethal combination of manned and unmanned reconnaissance
            aircraft will recapitalize our maritime patrol anti-submarine
            warfare, anti-surface warfare and armed intelligence,
            surveillance and reconnaissance capability. We also developed a
            robust sustainment plan for the current P-3 fleet that includes
            special structural inspections (SSI) and kits that extend P-3
            service lives by a minimum of 5,000 hours. This SSI program
            will replace, correct or modify our current P-3 force to ensure
            that they do not prematurely reach the end of their fatigue
            life before we achieve Initial Operating Capability (IOC) of
            the MMA in 2013.
      --VIRGINIA-class submarine (SSN-774). The first ship of this class
            was christened last year and will commission in 2004. This
            class will replace LOS ANGELES-class (SSN-688) attack
            submarines and will incorporate new capabilities, including
            unmanned vehicles, and the ability to support Special Warfare
            forces. It will be an integral part of the joint, networked,
            dispersed 21st Century Fleet. Our fiscal year 2004 budget
            funded the first of five submarines under the multi-year
            procurement (MYP) contract authorized by Congress last year.
            The second submarine of the MYP contract is funded in fiscal
            year 2005. Approximately $240 million in economic order
            quantity advance procurement is funded in fiscal year 2005 in
            support of this contract.
      --CG Modernization. Funding for the TICONDEROGA-class cruiser
            modernization continues in fiscal year 2005. The Cruiser
            Modernization 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 area air defense to the
            joint force commander. These modifications include
            installations of the Cooperative Engagement Capability, which
            enhances and leverages the air defense capability of these
            ships, and an ASW improvement package. These converted cruisers
            could also be available for integration into ballistic missile
            defense missions when that capability matures. Our first
            cruiser modernization begins in fiscal year 2006.
        FORCEnet is the operational construct and architectural framework
    for naval warfare in the joint, information age. It will allow systems,
    functions and missions to be aligned in a way that will transform our
    situational awareness, accelerate speed of decisions and allow naval
    forces to greatly distribute its combat power in a unified, joint
    battlespace. FORCEnet provides the world-class IT tools that we need to
    continue to be the world-class Navy.
        Programs that will enable the future force to be more networked,
    highly adaptive, human-centric, integrated, and enhance speed of
    command include:
      --Navy Marine Corps Intranet (NMCI). NMCI is operational and
            providing commercial IT services for more than 300,000 DON
            employees and two Combatant Commanders. This initiative, as
            part of our FORCEnet strategy, is providing a single, secure
            shore-based network and will link with our tactical networks to
            provide end-to-end collaboration within the DON and across the
            joint community. Fiscal year 2005 funding of $1.6 billion
            provides for NMCI operations and, at the same time, continues
            transition of the remaining legacy IT networks to NMCI
            enterprise network services. This past year, with the help of
            the authorizing language you provided, the NMCI program
            finalized a full partnership agreement with the Defense
            Information Systems Agency for operations and provisioning.
      --Mobile User Objective System (MUOS). The new MUOS Satellite
            Communications (SATCOM) program will increase DOD Narrowband
            UHF SATCOM capacity by roughly 1,300 percent over current
            capabilities. MUOS is a $6.4 billion joint interest program,
            and it supports a particularly important ``Comms-on-the-Move''
            capability for handheld terminals, aircraft, missiles, and UAVs
            in urban and heavily wooded terrain. We plan to reach the
            Initial Operating Capability milestone in 2009, with Full
            Operational Capability in 2013.
      --Joint Aerial Common Sensor (JACS). We have partnered with the Army
            in the Joint Aerial Common Sensor development program in our
            pursuit of a replacement for the aging EP-3 airborne
            information warfare and tactical signals intelligence (SIGINT)
            aircraft. JACS will provide multi-intelligence strike targeting
            data and Signals Intelligence capabilities, and will include a
            Synthetic Aperture Radar, Ground Moving Target Indicator,
            Electro-Optical and Infrared Sights, and Measurements and
            Signature capabilities. These will be coupled with automatic/
            manual data fusion. Our fiscal year 2005 request includes $25
            million for this program.
      --Joint Tactical Radio System (JTRS). JTRS will be the wireless
            ``last tactical mile'' component of the Global Information Grid
            (GIG) and will transform Navy's tactical communications systems
            by incorporating Internet Protocol (IP) communications over
            multi-spectral radio frequency (RF) media. JTRS is a software
            programmable, multi-band, multi-mode family of net-workable
            radios, capable of simultaneous voice, data, video
            communications and mobile ad hoc networking. Our fiscal year
            2005 request includes $56 million for JTRS.
      --Deployable Joint Command Control System (DJC\2\). DJC\2\ is the
            SECDEF and CJCS priority C\2\ transformation initiative. DJC\2\
            will provide a standing, fully deployable, scaleable, and
            standardized command and control (C\2\) capability to the
            Regional Combatant Commanders (RCC) and Joint Force Commanders.
            DJC\2\ responds to the need for joint, deployable C\2\
            capability, with first RCC delivery to PACOM in fiscal year
            2005. DJC\2\ is an enabler for the Standing Joint Force
            Headquarters concept being developed by Joint Forces Command
            (JFCOM). DON is Lead Component for the acquisition program, and
            we ask your support for the $81 million we've requested in
            fiscal year 2005.

    Improving Effectiveness
        As I've testified, your Navy today is the most capable and most
    ready Navy in our history, thanks in large part to the support of the
    Congress and of the American people. But, I believe that we can do
    better--that, in fact, we must do better--as stewards of the public
    trust in determining not just how much we should spend on programs, but
    how those defense dollars are spent. This is especially true today
    because of the strategic challenges posed by the ongoing global war on
    terrorism, because of our need to recapitalize aging, Cold War-era
    infrastructure and capability, and because of the burgeoning
    technological and operational changes that will dramatically alter the
    way we fight. Revolutionizing the way in which our defense dollars are
    spent presents opportunities to increase our effectiveness, both now
    and in the future.
        Sea Enterprise is focusing headquarters leadership on outputs and
    execution, and is creating ideas that will improve our productivity and
    reduce our overhead costs. Its key objectives are to:
      --Leverage technology to improve performance and minimize manpower
            costs.
      --Promote competition and reward innovation and efficiency.
      --Challenge institutional encumbrances that impede creativity and
            boldness in innovation.
      --Aggressively divest non-core, under-performing or unnecessary
            products, services and production capacity.
      --Merge redundant efforts.
      --Minimize acquisition and life-cycle costs.
      --Maximize in-service capital equipment utilization.
      --Challenge every assumption, cost and requirement.
        Department of the Navy senior leadership is actively engaged in
    tracking the execution of ongoing Sea Enterprise initiatives totaling
    approximately $40 billion, and identifying $12.4 billion in cost
    savings and requirements mitigation across the Future Years Defense
    Program (FYDP). We are committed to efficiency and productivity
    improvements that will generate the savings necessary to augment our
    investment stream and implement our Sea Power 21 vision--delivering the
    right force, with the right readiness, at the right cost. Specific
    highlights of these fiscal transformation initiatives include:
      --Right Readiness. Along with the Fleet Response Plan, we have also
            initiated processes ashore that will generate a more effective
            force. As just one example, we have established a single shore
            installation management organization, Commander, Navy
            Installations (CNI), to globally manage all shore
            installations, promote ``best practices'' development, and
            provide economies of scale, increased efficiency,
            standardization of polices, and improved budgeting and funding
            execution. This initiative is anticipated to save approximately
            $1.2 billion across the FYDP.
      --Right Cost. We've taken a hard look at our ``level of effort''
            programs to maximize return on taxpayer investment. This year's
            effort generated $2 billion in future savings in programs not
            supported by specific performance metrics in force structure,
            readiness or cost benefit. In addition, we focused on
            streamlining our organizations and processes as a means to
            harvest efficiencies and control costs. Innovative programs
            like SHIPMAIN and the Naval Aviation Readiness Integrated
            Improvement Program are aiding in developing and sharing best
            practices, streamlining maintenance planning and improving
            performance goals in shipyards, aviation depots, and
            intermediate maintenance activities. We also reorganized the
            Navy Supply Systems Command, including the establishment of the
            Naval Operational Logistics Support Center to consolidate
            transportation, ammunition and petroleum management. We will
            continue to look for additional opportunities in this area
            while leveraging the gains already made.
      --Right Force. We believe transformation to our future force must
            include improving our buying power. To improve upon our force
            structure, we're divesting non-core, redundant, under-
            performing, and outdated products and services. We are using
            multi-year procurement contracts and focusing where possible on
            economic order quantity purchase practices to optimize our
            investments. An excellent example lies in the F/A-18E/F multi-
            year procurement contract that anticipates procurement of 210
            aircraft while saving us in excess of $1.1 billion across the
            FYDP. We also recognize the need to transform our single
            greatest asymmetric advantage, our people. The upcoming year
            will focus on ensuring we not only have the right number, but
            the right mix of military, civilian, and contractor personnel
            to accomplish the mission at the lowest possible cost. You've
            given us a tremendous tool to enhance our flexibility in this
            area, the National Security Personnel System, and we plan to
            take full advantage of it.
        Building on prior efforts, I'm dedicating a significant amount of
    personal time to conducting execution reviews with leadership at the
    major commands across the Navy because, as I see it, leadership
    engagement in execution is an essential step to achieving our Sea
    Enterprise objectives. These reviews have provided me the opportunity
    to focus on the intricate details of the organizations while ensuring
    commanders are aligned with the vision and direction in which we are
    steaming. We focus on ways to swiftly move from strategy to
    implementation, as well as innovative ways to reduce costs and return
    resources to the enterprise for reinvestment.
        In 2005, the Navy will continue to pursue product and process
    efficiencies and the opportunities to be more effective while improving
    our war fighting capability. Harvesting the savings for
    recapitalization is a vital part of that effort, and we will continue
    to balance the benefits of new productivity initiatives against
    operational risks. Our intent is to foster a culture of continuous
    process improvement, reduce overhead, and deliver the right force
    structure both now and in the future.

                                   CONCLUSION

        For us, winning the Global War on Terrorism remains our number one
    objective--and victory is the only acceptable outcome. To achieve this,
    we are accelerating the advantages we bring to the nation.
        The Fleet Response Plan will improve upon the operational
    availability of fleet units, providing forward deployed forces for
    enhanced regional deterrence and contingency response, while at the
    same time, retaining the ability to rapidly surge in times of crisis.
        We are investing in enhanced war fighting capability for the joint
    force, using the extended reach of naval weapons and sensors to reach
    farther and more precisely with striking power, and deliver broader
    defensive protection for joint forces ashore and fully leverage our
    command of the sea.
        We are creating a personnel environment that attracts, retains and
    relies upon creative, effective and competitive people. We are
    investing in the tools, the information technology and the training
    that delivers more meaningful job content to them because it is they
    who offer us our greatest advantage.
        The support of Congress is vital to our readiness today and to
    building the Navy of tomorrow--I thank you for your dedicated efforts
    and support.

    STATEMENT OF GENERAL MICHAEL W. HAGEE, COMMANDANT,
                UNITED STATES MARINE CORPS
        General Hagee. Chairman Stevens, Senator Inouye, and
    distinguished members of this committee, it is my privilege to
    report on the state of your Marine Corps.
        First, like Admiral Clark and Secretary England, I would
    like to thank you for your visits to our servicemen and women
    within and outside the United States. These trips always have a
    positive effect on individual morale. I would also like to
    thank this committee for its support of your marines and their
    families over the past few years. This support is critical to
    ensuring that we remain the expeditionary force that is most
    ready when the Nation is least ready.
        After we withdrew from Southern Iraq, in September of last
    year, we continued to have significant numbers of marines
    deployed to Afghanistan, Horn of Africa, Philippines, Japan,
    the Republic of Georgia, and other regions in support of the
    global war on terrorism. With these ongoing deployments, and in
    the midst of reconstituting our force and equipment, we were
    directed to have approximately 25,000 marines trained and
    prepared to deploy to Iraq within 4 months. Today, we have
    nearly completed, almost 2 weeks ahead of schedule, the
    movement of these marines and sailors to Kuwait and Iraq in
    support of Operation Iraqi Freedom II.
        Simultaneous with this major deployment, we have executed a
    short-notice deployment of over 1,400 marines and sailors to
    Haiti to conduct security and stability operations there. The
    immediate responsiveness, speed, flexibility, and adaptability
    of your marines demonstrate the continued relevance of naval
    expeditionary capabilities to our Nation's security.
        Your sustained commitment and support of the American
    people have been indispensable in my ability to report to you
    that your marines are well trained, well equipped, and highly
    motivated to meet the challenges vital to maintaining the
    Nation's security today and in the future.
        Let me assure you that the Marine Corps' first priority is
    and will continue to be warfighting readiness and excellence in
    support of our Nation. In the near term, the Marine Corps is
    focused on readiness to provide capable forces that meet the
    demanding needs of our Nation. For the long term, the Marine
    Corps and Navy are committed to developing a new
    transformational sea-basing capability that will provide a
    critical joint competency for assuring access and projecting
    combat power ashore worldwide.
        During Operation Iraqi Freedom, we used a combination of
    forward-deployed marine expeditionary units, maritime pre-
    positioning squadrons, two large amphibious task force, and
    strategic air- and sealift to deploy a combat-ready and
    sustainable force of almost 70,000 marines and sailors in less
    than 60 days. No other fighting force in the world can do that.
    Exploding the operational speed, reach, and inherent
    flexibility of sea power, your Navy/Marine Corps team, closely
    integrated with joint and coalition partners and special
    operating forces, engaged in 26 days of sustained combat
    operations, fought ten major engagements, destroying eight
    Iraqi divisions before stopping north of Baghdad, in Tikrit,
    almost 500 miles inland.
        Today, marines are relieving the United States (U.S.) Army
    units in Western Iraq. In preparation for this deployment, we
    work closely with the U.S. Army in and out of Iraq, focusing on
    equipment, tactics, techniques, and procedures. We drew on
    analysis of our experiences in conducting security and
    stability operations last year in Southern Iraq, the tactics of
    the British, and our own extensive small-wars experience. We
    have assimilated these lessons through a comprehensive training
    package that includes rigorous urban operations and language
    and cultural education. We are paying particular attention to
    individual protective equipment, enhanced vehicle and aircraft
    hardening, and aviation survival equipment and procedures.
        However, we also continue to plan for the future. In close
    cooperation and collaboration with the U.S. Navy, as Admiral
    Clark has mentioned, we have developed operational concepts
    that will deliver increased capabilities for the Nation and the
    regional combatant commanders in 10 to 14 days for major
    contingencies, and 0 to 4 days for smaller contingencies, an
    increase in over 50 percent response time.
        The MV-22 Osprey, Expeditionary Fighting Vehicle, Joint
    Strike Fighter, Littoral combat ship, LHA(R), DD(X), and the
    Maritime Pre-positioning Force Future are in the 5-year defense
    plan and are critical to this effort. These platforms will
    comprise a system of systems that will significantly improve
    our warfighting capabilities by leveraging advancements in
    technology. The integration and interdependence of these
    transformational programs will enable us, as part of the joint
    force, to project more combat power ashore in less time with
    the same number of marines. We ask for your continued support
    of these important complementary and transformational programs
    and concepts.
        Your support for quality-of-life issues has been critical
    in our ability to recruit and retain the best young men and
    women America has to offer. The success in these programs is
    reflected in our ability to continue to meet our recruiting and
    retention goals even in these demanding times.

                               PREPARED STATEMENT

        Mr. Chairman, Senator Inouye, members of this committee, I
    would like to emphasize the magnificent performance of your
    individual marine, the most agile and lethal weapons system on
    today's battlefield. On behalf of all marines, I thank this
    committee for its steadfast support, 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 readiness of
    your United States Marine Corps. Your Marines are firmly committed to
    warfighting excellence, and the support of the Congress and the
    American people has been indispensable to our success in the Global War
    on Terrorism. Your sustained commitment to improving our Nation's armed
    forces to meet the challenges of today as well as those of the future
    is vital to the security of our Nation. On behalf of all Marines and
    their families, I thank this Committee for your continued support.

                                  INTRODUCTION

        In the near-term, the Marine Corps' top priorities are to maintain
    our high state of readiness and to provide capable forces that meet the
    demanding needs of the Unified Combatant Commanders in order to
    prosecute the Global War On Terrorism in support of the Nation. For the
    long-term, the Marine Corps and Navy are committed to developing a
    Seabasing capability that will provide a critical joint competency for
    assuring access and projecting power that will greatly improve the
    security of the United States. The marked increase in our warfighting
    capability will be apparent as we introduce new systems such as the MV-
    22 Osprey, the Expeditionary Fighting Vehicle, the Joint Strike
    Fighter, and the Lightweight 155 mm howitzer into our force structure,
    using them to enhance the already potent combat power of our Marine
    Air-Ground Task Forces as integral elements of our Nation's joint
    force.
        The Navy-Marine Corps team continues to play a critical role in the
    Global War On Terrorism and in the establishment of stability and
    security throughout the world. During this past year, the Marine Corps,
    both active and reserve, was engaged in operations from Afghanistan, to
    the Arabian Gulf, the Horn of Africa, Liberia, the Georgian Republic,
    Colombia, Guantanamo Bay, and the Philippines. Most prominent in
    highlighting the value and power of the Nation's naval expeditionary
    capability was the Marine Corps' participation in Operation IRAQI
    FREEDOM. Success in this operation underscored the unique contributions
    of our multi-dimensional naval dominance, our expeditionary nature, our
    flexibility to deal with complex situations and challenges, and the
    adaptability of our forces and individuals in order to defeat the
    challenges posed by adaptive, asymmetric enemies and long-term threats.
        Early last year, the I Marine Expeditionary Force deployed a combat
    ready force of almost 70,000 Marines and Sailors in less than 60 days
    using the full array of our complementary power projection
    capabilities. Forward deployed Marine Expeditionary Units (Special
    Operations Capable) again demonstrated their proven value for immediate
    response. Eleven strategically located Maritime Prepositioned Force
    ships were unloaded in 16 days to provide the equipment and sustainment
    for two Marine Expeditionary Brigades. A seven ship amphibious force
    from each coast embarked a total of 11,500 Marines, Sailors, and their
    equipment and within thirty days these fourteen ships began to arrive
    and offload in Kuwait. Strategic sea and air lift was also vital to our
    success in this effort. Exploiting the operational speed, reach, and
    inherent flexibility of seapower, the Navy-Marine Corps team achieved a
    rapid buildup of sustained warfighting power that was combat ready to
    support U.S. Central Command on March 1, 2003.
        Closely integrated with our joint and coalition partners, as well
    as Special Operations Forces, the I Marine Expeditionary Force provided
    the Combatant Commander with a potent combined arms force comprising a
    balance of ground, aviation, and combat service support elements all
    coordinated by a dynamic command element. This teamwork--the product of
    demanding and realistic Service and joint training--presented a multi-
    dimensional dilemma for the Iraqi regime's forces and loyalists. It
    also greatly increased the range of options available to our leadership
    as they addressed each unique and complex situation. The integration of
    the 1st United Kingdom Division within the I Marine Expeditionary Force
    provides outstanding lessons for achieving merged coalition
    capabilities and consistent goals in the future.
        The combat power of I Marine Expeditionary Force generated an
    operational tempo that our enemy could not match. With short notice
    that operations would commence early, the Marines and their joint and
    coalition partners rapidly secured key strategic objectives. The I
    Marine Expeditionary Force then engaged in 26 days of sustained combat
    operations. Using the tenets of maneuver warfare, they executed four
    major river crossings, fought ten major engagements, and destroyed
    eight Iraqi divisions before stopping in Tikrit--almost 500 miles
    inland. In support of Joint Special Operations Forces Northern Iraq,
    the 26th Marine Expeditionary Unit inserted a Marine-Air Ground Task
    Force from the Eastern Mediterranean into Northern Iraq--almost 1,200
    miles distance. The sustained resources of the Marine force, which were
    derived primarily from our seaborne logistics, provided us unrivaled
    advantages. While our logistics were stretched by the operational
    commanders, our combat service support units demonstrated flexibility
    and resourcefulness.
        Highlighting the expeditionary mindset of Marines, our combined
    arms force successfully operated in desert, urban, swamp, and rural
    environments while effectively conducting combat, peacekeeping, and
    humanitarian operations--at times simultaneously. Marines also
    demonstrated the ability to re-task and reorganize to conduct
    unanticipated missions like the taking of the city of Tikrit. Following
    major combat operations, I Marine Expeditionary Force assumed
    responsibility for security and stability in five Central Iraq
    provinces until they were relieved of the last province by coalition
    forces this past September. Flexibility and adaptability are key
    characteristics of an expeditionary force, and they are critical
    advantages that we must seek to optimize for the future, particularly
    in this era of global uncertainty.
        Recent operations also emphasize the increased importance of access
    to key regions for projecting our Nation's power. With global
    interests, the United States must retain the capability to secure
    access as needed. Power projection from the sea greatly increases the
    range of options available to avert or resolve conflicts. A credible
    naval forcible-entry capability is critical to ensure that we are never
    barred from a vital national objective or limited to suboptimal
    alternatives.
        Since the end of major combat operations, the Marine Corps has been
    setting the force in order to enhance warfighting readiness for future
    contingencies. We are reloading combat equipment and materiel on the
    ships of the Maritime Prepositioned Squadrons while also ensuring that
    the requirements for Operation IRAQI FREEDOM II are fulfilled. We are
    using provided funding to repair, refurbish, and where necessary,
    replace equipment. During this period, Marines have continued to
    forward deploy. Marine Corps units are supporting Operation ENDURING
    FREEDOM in Afghanistan, operations in the Horn of Africa, exercises
    critical to supporting the Combatant Commanders' Theater Security
    Cooperation Plans, and counter-drug operations in support of joint and
    joint-interagency task forces. In addition, we have conducted a major
    program to identify and analyze lessons learned from the Iraqi
    campaign. We have also begun to assimilate these lessons and determine
    where and how our force should be rebalanced.
        As the last few years have demonstrated, the Marine Corps Reserve
    is a full partner in our total force. Reserve units participated in all
    aspects of the war in Iraq, providing air, ground, and combat service
    support as well as a large number of individual augmentees to Marine
    and joint staffs. Mobilized Marine reserve infantry battalions have
    also served as ready reaction forces, ``on call'' to support the
    Federal Emergency Management Agency's role in homeland security.

                  BUILDING ON SUCCESS FOR IMMEDIATE OPERATIONS

        We continue to execute global operations and exercises with our
    joint and coalition partners. The Marine Corps is beginning to relieve
    the 3d Armored Cavalry Regiment and the 82d Airborne Division in
    Western Iraq in support of Operation IRAQI FREEDOM II. These forces
    will be deployed in two rotations of seven months each. This rotation
    policy will result in the least disruption for the long-term health of
    the Marine Corps, precluding stop-loss/stop-move and unnecessary
    interruptions in recruit training, career progression and development,
    professional military education, and other deployment requirements. The
    first rotation, from March until September 2004, will include 25,000
    Marines and their equipment and includes almost 3,000 reserve component
    Marines. A second rotation--of like size and composition--will overlap
    the first and ensure a smooth and stable transition.
        In preparation for Operation IRAQI FREEDOM II, I Marine
    Expeditionary Force has analyzed lessons learned from their experiences
    in conducting security and stability operations from March to September
    2003, and recent Army lessons learned. As they did last year, I Marine
    Expeditionary Force is working closely with the Army forces in Iraq;
    they have conducted a number of liaison visits with the Army units they
    will relieve. They have drawn from procedures used by the Los Angeles
    Police Department for neighborhood patrolling in gang dominated areas,
    the tactics of the British in Iraq--which reflect years of experience
    in low intensity conflicts and peacekeeping operations, as well as the
    Marine Corps' own extensive ``Small Wars'' experience. We have
    assimilated these lessons through a comprehensive training package that
    includes tactics, techniques, procedures for stability and counter-
    insurgency operations. We have conducted rigorous urban operations
    training and exercises. Over 400 Marines are receiving Arabic language
    immersion training, and all deploying Marines and Sailors are receiving
    extensive cultural education. Our supporting establishment is focused
    on the equipment, logistics, and training requirements of this force--
    paying particular attention to individual protective equipment,
    enhanced vehicle and aircraft hardening, and aviation survival
    equipment and procedures. This training and support are critically
    important as we send Marines back to war in a volatile, dangerous, and
    changing situation.
        During this next year Marine Expeditionary Units will still deploy
    as part of Naval Expeditionary Strike Groups in support of Combatant
    Commander requirements. Units will continue to rotate to Okinawa and
    Iwakuni Japan, and some of those forces will further deploy in support
    of Operation IRAQI FREEDOM II. While the operational tempo remains
    high, recruiting and retention continue to exceed our goals. We are
    monitoring the health of our Service, and we are focused on ensuring
    that the Marine Corps remains ready for all current and future
    responsibilities.

                             TAKING CARE OF OUR OWN

        Events of the past year continue to highlight the value of the
    individual Marine over all other weapon ``systems.'' While we always
    strive to provide our Marines with the best equipment and weapons, we
    never forget that people and leadership are the foundations of the
    Marine Corps' readiness and warfighting capabilities. Operation IRAQI
    FREEDOM demonstrated that the Marine Corps' recruiting, training, and
    education of the force are extremely successful in maintaining the high
    standards of military readiness our Nation requires. The Marine Corps
    remains committed to taking care of our Marines, their families, and
    our civilian Marines.

    Marines
        End Strength.--The Marine Corps is assimilating the Congressionally
    authorized increase in Marine Corps end-strength to 175,000. The
    increase of 2,400 Marines previously authorized by Congress addressed
    an urgent need to train and maintain enough Marines for the long-term
    requirements associated with the Global War on Terrorism. It has been
    particularly important in enabling us to provide the Nation with a
    robust, scalable force option specifically dedicated to anti-
    terrorism--the 4th Marine Expeditionary Brigade (Anti-Terrorism).
        The Marine Corps is expeditionary by nature and therefore
    accustomed to deploying in support of contingency and forward presence
    missions. We are structured in such a way as to satisfy our enduring
    requirements and meet operational contingencies as long as the
    contingencies are temporary in nature. While the force is stretched, we
    are meeting our current challenging operational commitments. Our high
    operational and personnel tempos have not negatively impacted
    accessions or retention efforts; however, we continue to monitor both
    very closely.
        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 eight years for enlisted recruiting and thirteen years for officer
    recruiting. This past year the Marine Corps recruited over 100 percent
    of its goal with over 97 percent Tier I High School graduates. In order
    to continue attracting America's finest youth, Recruiting Command
    provides its recruiters the best tools available to accomplish their
    mission.
        The Marine Corps Reserve achieved its fiscal year 2003 recruiting
    goals with the accession of 6,174 Non-Prior Service Marines and 2,663
    Prior Service Marines. With regard to our reserve component, officer
    recruiting and retention to fill out the requirements of our Selected
    Marine Corps Reserve units remains our most challenging concern. This
    is primarily due to the fact that we recruit Reserve officers almost
    exclusively from the ranks of those who have first served a tour as an
    active duty Marine officer and currently the Corps is experiencing a
    low attrition rate for company grade officers in our active force. We
    are attempting to alleviate this challenge. Two successful methods
    include increasing awareness of the benefits of service in the Reserves
    to the company grade officers who are leaving the active ranks and
    reserve officer programs for qualified enlisted Marines.
        Retention.--Retaining the best and the brightest Marines is a
    constant goal; history has proven that superb leadership in the staff
    noncommissioned officer ranks is a major contributor to the Corps'
    combat effectiveness. The ranks of this elite group of leaders can only
    be filled by retaining our best enlisted Marines. The Marine Corps has
    two retention measures and both clearly indicate healthy service
    continuation rates. Our First Term Alignment Plan (first tour) has
    consistently achieved its reenlistment requirements over the past nine
    years. With under one-half of the current fiscal year completed, we
    have achieved 82 percent of our first-term retention goal. Furthermore,
    our Subsequent Term Alignment Plan (second tour and beyond) reveals
    that we have already retained 66 percent of our goal for this fiscal
    year.
        Current officer retention is at a nineteen year high, continuing a
    four-year trend of increasing retention. Despite the increased
    retention overall, certain Military Occupational Specialties
    perennially suffer high attrition. We are attempting to overcome this
    challenge by offering continuation pay for those Marines with Military
    Occupational Specialties that include special qualifications and
    skills. 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.--In 2003, the Marine Corps Reserve rapidly
    mobilized combat ready Marines to augment and reinforce the active
    component. Marine Corps Reserve activations in support of Operation
    IRAQI FREEDOM began in January 2003, and peaked at 21,316 Reserve
    Marines on active duty in May 2003. This represented 52 percent of the
    Selected Marine Corps Reserve (SMCR). Of the over 5,400 Reservists
    currently on active duty, almost 1,300 Individual Mobilization
    Augmentees, Individual Ready Reserves, and Retirees fill critical joint
    and internal billets. As of January 2004, the Marine Corps Reserve
    began activating approximately 7,000 SMCR Marines in support of
    Operation IRAQI FREEDOM II. Judicious employment of Reserve Marines
    remains a top priority of the Marine Corps to ensure the Marine Corps
    Reserve maintains the capability to augment and reinforce the active
    component. Marine Corps Reserve units and individuals are combat ready
    and have rapidly integrated into active forces commands demonstrating
    the effectiveness of the Total Force Marine Corps.
        A strong Inspector-Instructor system and a demanding Mobilization
    and Operational Readiness Deployment Test program ensured Marine Corps
    Reserve units achieved a high level of pre-mobilization readiness.
    Marine Reserve Units continuously train to a C1/C2 readiness standard,
    eliminating the need for post-mobilization certification. Ninety-eight
    percent of SMCR Marines called up for duty reported for mobilization
    and less than one percent requested a deferment, delay, or exemption.
    The Marine Corps Reserve executed a rapid and efficient mobilization
    with units averaging six days from notification to being deployment-
    ready, and 32 days after receiving a deployment order they arrived in
    theater. Many activated Marine Reserve units were ready to deploy
    faster than strategic lift could be provided.
        Building on the important lessons of the last year, the Marine
    Corps is pursuing several transformational initiatives to enhance the
    Reserves' capabilities as a ready and able partner with our active
    component. These pending initiatives include: increasing the number of
    Military Police units in the reserve component; establishing a Reserve
    Intelligence Support Battalion to include placing Reserve Marine
    Intelligence Detachments at the Joint Reserve Intelligence Centers;
    returning some of our Civil Affairs structure to the active component
    to provide enhanced planning capabilities to the operational and
    Service Headquarters; and, introducing an improved Individual Augmentee
    Management Program to meet the growing joint and internal requirements.
        When called, the Marine Corps Reserve is ready to augment and
    reinforce. Our Reserve Marines are a vital and critical element of our
    Total Force. The training, leadership, and quality of life of our
    reserve component remain significant Marine Corps priorities.
        Marine For Life.--The commitment to take care of our own includes a
    Marine's transition from active service back to civilian life. The
    Marine For Life Program's mission is to provide sponsorship for our
    more than 27,000 Marines who honorably leave active service each year.
    The program was created to nurture and sustain the positive, mutually
    beneficial relationships inherent in our ethos, ``Once a Marine, Always
    a Marine.'' In cities across the United States, Reserve Marines help
    transitioning Marines and their families get settled in their new
    communities. Sponsorship includes assistance with employment,
    education, housing, childcare, veterans' benefits, and other support
    services needed to make a smooth transition. To provide this support,
    Marine For Life taps into the network of former Marines and Marine-
    friendly businesses, organizations and individuals willing to lend a
    hand to a Marine who has served honorably.
        Initiated in fiscal year 2002, the program will reach full
    operational capability in fiscal year 2004. In addition to 110 Reserve
    Marines serving as ``Hometown Links,'' an enhanced web-based electronic
    network, easily accessed by Marines worldwide, will support the
    program. The end state of the Marine For Life Program is a nationwide
    Marine and Marine-friendly network available to all Marines honorably
    leaving active service, that will improve their transition to civilian
    life.

    Civilian Marines
        Civilian Workforce Campaign Plan.--Recognizing that our Civilian
    Marines are integral to the success of military operations, General
    James L. Jones, the 32nd Commandant of the Marine Corps, charged our
    senior Marine Corps officials with the development and implementation
    of a strategic 5-year plan for the recruitment, development, and
    retention of our Civilian Marines. The Civilian Workforce Campaign Plan
    (CWCP) consists of six strategic goals: (1) nurture, build, and grow
    Civilian Marines; (2) provide flexible career opportunities; (3) create
    leaders at all levels; (4) improve the performance evaluation system;
    (5) strengthen workforce management expertise; and (6) establish an
    integrated Total Force management approach. As Commandant, I have
    provided the following additional implementing guidance.
        Our vision is to make the Marine Corps the employer of choice for a
    select group of civilians imbued with the Marine Corps values of honor,
    courage, and commitment. Through implementation of the CWCP, we will
    not only define what the Marine Corps will offer its Civilian Marines,
    but what the Corps expects from them. We will attract, nurture, build,
    and grow Civilian Marines by providing innovative recruitment,
    development, retention, reward, and acculturation programs throughout
    the work-life cycle.
        National Security Personnel System.--We want to take this occasion
    to thank again the committee and the Congress for enacting the National
    Security Personnel System (NSPS) in the Fiscal Year 2004 National
    Defense Authorization Act. The Act authorized a more flexible civilian
    personnel management system for the Department that allowed the
    Department to be a more competitive and progressive employer at a time
    when our national security demands a highly responsive system of
    civilian personnel management. The legislation ensures that merit
    system principles govern any changes in personnel management,
    whistleblowers are protected, discrimination remains illegal, and
    veterans' preference is protected. The Department will collaborate with
    employee representatives, invest time to try and work out our
    differences, and notify Congress of any differences before
    implementation. In January, Department officials met with union
    representatives to begin the development of a new system of labor-
    management relations. Later this year, following an intensive training
    program for supervisors, managers, human resources specialists,
    employees, as well as commanders and senior management, the Department
    plans to begin implementing NSPS. The Marine Corps, along with the
    entire Department of the Navy, expects to be in the first wave of
    implementation.
        Military-Civilian Conversions.--The Marine Corps will continue to
    actively pursue a review of all functional areas within the Marine
    Corps in an effort to return more Marines to the operating forces.
    Through fiscal year 2003, we have returned over 2,000 manned structure
    spaces to the operating forces, and we will return approximately 650
    more Marines in fiscal year 2004. The fiscal year 2005 President's
    Budget converts roughly an additional 1,400 more billets from Marines
    to Civilian Marines, which will provide us more options to increase
    manning in the operating forces.

    Education
        Amid today's uncertain, volatile security environment, our most
    effective weapon remains the individual Marine who out-learns, out-
    thinks, and out-fights any adversary. Such warfighting competence is
    secured only through intellectual development. Recent events
    demonstrated how quality education instills confidence in Marines. Our
    educational standards and programs produce innovative leaders who take
    initiative and excel during challenging situations involving
    uncertainty and risk. These high educational standards are inculcated
    by the Marine Corps University and are designed to target every rank in
    both our active and reserve forces. Each year the Marine Corps
    University student population includes members of the other armed
    services, various government agencies as well as dozens of
    international military officers from over thirty different countries.
        The Marine Corps endeavors to provide its Marines with ``lifelong
    learning'' opportunities through a variety of educational programs,
    college courses, and library services on our bases and stations.
    Furthermore, distance learning programs through the Marine Corps
    University make continuing education available to Marines regardless of
    their location. In addition, the Marine Corps will continue to fully
    fund the Tuition Assistance Program in accordance with the Department
    of Defense guideline--funding for 100 percent of tuition cost up to
    $250 per semester hour with a maximum of $4,500 per year. In fiscal
    year 2003, there were 25,454 Marines enrolled in almost 80,000 courses
    with the help of the Tuition Assistance Program.
        Joint Initiatives.--The Marine Corps synchronizes its educational
    objectives with those of the other armed services in order to provide
    Regional Combatant Commanders with the most capable joint force. We
    support the proposal for a Joint Advanced Warfighting School (JAWS) and
    for broadening Joint Professional Military Education (JPME)
    opportunities for the Total Force. By working closely with Joint Forces
    Staff College and our sister services, JAWS has the potential to
    empower future combatant commanders with talented officers who are
    experienced in campaign planning. Intent on broadening our joint
    experience base, the Marine Corps is pursuing an accredited advanced
    joint curriculum (JPME Phase II) at the Marine Corps War College and
    will continue to work to provide JPME opportunities for both active and
    reserve components.
        Senior Leader Development Program.--The Senior Leader Development
    Program was developed last year to address General Officer and Senior
    Executive Service career development and to link education
    opportunities to career progression. A study was commissioned to
    identify the competencies required in each of our general officer
    billets in an effort to link core and complimentary curriculum with the
    assignment process. Within the core curriculum, senior leaders will
    attend the Joint Warfare series of courses as prerequisites by rank and
    billet while they study innovation, business transformation, and
    resource management through complementary courses.

    Quality of Life/Quality of Service
        The Marine Corps works to improve the quality of life for Marines
    and their families in order to continue the success of the all
    volunteer force. We provide excellent quality of life programs and
    services, while also helping new Marines to better understand what to
    expect in the military lifestyle. We continuously assess, through a
    variety of means, the attitudes and concerns of Marines and their
    families regarding their quality of life expectations. With 67 percent
    of our Marines deployed away from their home installations at the
    height of Operation IRAQI FREEDOM, we carefully captured lessons
    learned to ensure quality of life programs meet the needs of deployed
    Marines and families who remain at home. Community and Family
    Assistance Centers were established at Camp Lejeune, Camp Pendleton,
    Marine Corps Air Station Miramar, and Marine Corps Base Twentynine
    Palms to provide Marine family members and loved ones access to
    relevant information and referral services.
        To further help Marines and their families before, during, and
    after deployments, the Marine Corps implemented Marine Corps Community
    Services (MCCS) One Source, a Marine Corps-conducted, Department of
    Defense funded pilot program providing around-the-clock information and
    referral services. MCCS One Source is especially useful to our
    activated Marine Reserves and their families as they negotiate the
    requirements and procedures associated with utilization of military
    programs such as TRICARE and other benefit services. In recognition of
    the importance of the transition home after deployments for both
    Marines and their families, the Marine Corps developed a standardized
    return and reunion program consisting of a mandatory warrior transition
    brief for returning Marines, a return and reunion guidebook for Marines
    and family members, a caregiver brief, and briefs designed for spouses.
        We greatly appreciate the supplemental appropriations bills during
    2003, that contained additional help for deployed Marines and their
    families. In 2004, quality of life efforts will continue to focus on
    issues related to supporting deployed forces and their families.

    Safety
        Safety programs are vital to force protection and operational
    readiness. Marine leaders understand the importance of leadership,
    persistence, and accountability in the effort to reduce mishaps and
    accidents. The fiscal year 2003 off duty and operational mishap rates
    were driven upward by the mishaps that occurred during and post
    Operation IRAQI FREEDOM, while the aviation mishap rate decreased. To
    meet the Secretary of Defense's challenge to all Services to reduce
    mishaps by 50 percent in two years, the Marine Corps is focusing on
    initiatives that deal particularly with the development of strategies
    and specific interventions to reduce all mishaps. Our leadership at
    every level understand the challenge, and we are actively involved in
    the effort to safeguard our most precious assets--Marines and Sailors.

                       BUILDING ON SUCCESS FOR THE FUTURE

        The Marine Corps, in partnership with our Navy brethren, provides
    our Nation with unrivaled maritime power to help secure peace and
    promote our national interests. The President's fiscal year 2005
    budget, together with your support, will provide a strong foundation
    for our continued success. The fiscal year 2005 budget--predicated on a
    peacetime operational tempo--sustains a high level of readiness and
    ensures our ability to rapidly respond to emerging situations. It also
    allows us to assimilate new technologies and explore new concepts that
    will help realize the full potential of our people and their equipment.
    We will continue to seek improved means to increase the efficiency of
    our investments and increase the combat effectiveness of our forces.

    Technology and Experimentation
        The Marine Corps has a long history of innovation and adaptation.
    Experimentation is our principle means to explore new ideas and
    technologies in order to develop new capabilities to overcome emerging
    challenges. The Marine Corps Combat Development Command has realigned
    its experimentation program around the Sea Viking campaign. This
    campaign will explore both concept and prototype technology development
    pathways leading to the sea-based expeditionary capabilities envisioned
    for the future, to include forcible entry from the sea. The Sea Viking
    campaign is complementary to the joint concept development and
    experimentation campaign of Joint Forces Command and the Navy's Sea
    Trial experimentation process. As an integral part of this effort, the
    Marine Corps is refining the expeditionary combat capabilities best
    suited to participate in future Expeditionary Strike Group and
    Expeditionary Strike Force operations. It is also exploring the
    potential for an expanded Seabasing capability in support of future
    joint operations.
        The Marine Corps Warfighting Laboratory has experimented with
    several new pieces of equipment to enhance individual and small unit
    effectiveness. Based on successful experimentation, limited numbers of
    the M16A4 Modular Weapons System, Rifle Combat Optic, and the
    Integrated Intra Squad Radio were fielded for use during Operation
    IRAQI FREEDOM. The Marine Corps continues to seek enhanced capabilities
    for the future as we continue to improve and transform the force. In
    addition, we have procured sufficient quantities of the Outer Tactical
    Vest and its Small Arms Protective Insert plates to ensure all Marines
    participating in Operation IRAQI FREEDOM II are equipped with enhanced
    ballistic protection.

    New Concepts and Organizations
        The Expeditionary Force Development System implemented this past
    year is a methodological process that is designed to facilitate the
    development and realization of military operational concepts. It is a
    streamlined and integrated system that covers all phases of concept
    development to the acquisition of necessary equipment and weapons
    systems. The Expeditionary Force Development System proved to be of
    great value to our forces engaged in combat operations and is proving
    to be a helpful means of ensuring that the Marine Corps quickly profits
    from recent operational experiences. The system is compatible with and
    supports naval and joint transformation efforts as it integrates
    transformational, modernization, and legacy capabilities and processes.
    Several emerging concepts and organizational structures are maturing
    that will benefit the Marine Corps and ensure we can meet the future
    demanding requirements of the Combatant Commanders.
        The Seabasing Concept.--Seabasing, envisioned as a National
    capability, is our overarching transformational operating concept for
    projecting and sustaining multi-dimensional naval power and selected
    joint forces at sea. As stated by the Defense Science Board in its
    August 2003 Task Force report: ``Seabasing represents a critical future
    joint military capability for the United States.'' It assures joint
    access by leveraging the operational maneuver of forces globally from
    the sea, and reduces joint force operational dependence upon fixed and
    vulnerable land bases. Seabasing unites our capabilities for projecting
    offensive power, defensive power, command and control, mobility and
    sustainment around the world. This will provide our Regional Combatant
    Commanders with unprecedented versatility to generate operational
    maneuver. Seabasing will allow Marine forces to strike, commence
    sustainable operations, enable the flow of follow-on forces into
    theater, and expedite the reconstitution and redeployment of Marine
    forces for follow-on missions. As the core of Naval Transformation,
    Seabasing will provide the operational and logistical foundation to
    enable the other pillars of Naval Transformation (Sea Strike, Sea
    Shield, Sea Base, and FORCEnet).
        This year, the Marine Corps has continued to refine plans for the
    Marine Expeditionary Brigade of 2015, in concert with our concept for
    sea-based operations. Similarly, the Analysis of Alternatives for our
    Maritime Prepositioning Force (Future), a critical component of
    Seabasing, will provide valid choices for achieving Seabasing
    capabilities. These initiatives will complement, rather than replace,
    the amphibious lift and forcible entry capacity of the LHA(R), LPD-17,
    and LHD, and will provide the Nation a deployment and employment
    capability unmatched in the modern world.
        Expeditionary Strike Groups.--The Marine Corps and Navy continue
    the series of experiments that will refine 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 enhanced Marine Expeditionary Units
    (Special Operations Capable) to provide greater combat capabilities to
    Regional Combatant Commanders. Navy combatants are incorporated within
    the existing training and deployment cycle of the Amphibious Ready
    Group. Further experimentation will also allow us to test command-and-
    control arrangements for the Expeditionary Strike Group (ESG). The ESG-
    1, composed of West Coast Navy and Marine forces, recently completed
    the pilot deployment in this series. The ESG-2, composed of East Coast
    Navy and Marine forces, will deploy later this year. Currently, the
    Marine Corps Combat Development Command is working with Navy and Marine
    operating forces to capture critical information from these
    experimental deployments to ensure that the ESG capability thoroughly
    integrates doctrine, organization, training, materiel, leadership,
    education, personnel, and facilities. Also, the Marine Corps Combat
    Development Command is working with the Navy to develop the concept for
    the employment of the additional capabilities that the ESG provides
    Regional Combatant Commanders. Finally, the Center for Naval Analyses
    is evaluating the series of experiments through embedded analysts
    deployed with both ESGs and will submit their consolidated reports to
    the Navy and Marine Corps in October 2004.
        Marine Corps--U.S. Special Operations Command Initiatives.--The
    Marine Corps continues to aggressively improve interoperability with
    Special Operations Forces. The U.S. Special Operations Command-Marine
    Corps Board has developed over 30 initiatives to support our
    interoperability goals. The Marine Corps and U.S. Special Operations
    Command are working to leverage existing pre-deployment and deployment
    training as a means to ``operationalize'' our relationship. Our
    deploying Marine Expeditionary Units (Special Operations Capable)
    exchange liaison officers with the Theater Special Operations Commands
    as the Marine Expeditionary Units deploy within the various theaters.
    On June 20, 2003, a Marine Corps ``proof of concept'' Detachment that
    is task organized to complement U.S. Special Operations Command mission
    areas in Direct Action, Special Reconnaissance, Coalition Support and
    Foreign Internal Defense formally stood up at Camp Pendleton,
    California. The Detachment transferred to the operational control of
    U.S. Special Operations Command last December, to facilitate joint pre-
    deployment training and is scheduled to deploy in April 2004, with a
    Naval Special Warfare Squadron supporting U.S. Central Command.
    Finally, we are conducting joint training with U.S. Special Operations
    Command in the areas of fixed and rotary wing air support of special
    operation missions.
        Reestablishment of Air-Naval Gunfire Liaison Companies.--During
    this past summer the Marine Corps reestablished an Air-Naval Gunfire
    Liaison Company in I Marine Expeditionary Force and another in the II
    Marine Expeditionary Force. These companies provide teams that
    specialize in all aspects of fire support--from terminal control to
    support of division fire support coordination centers. They greatly
    enhance Marine Air-Ground Task Force Commanders' liaison capability--
    with foreign area expertise--to plan, coordinate, employ, and conduct
    terminal control of fires in support of joint, allied, and coalition
    forces. Each company will be fully stood up by this summer, and a
    separate platoon will be stood up in III Marine Expeditionary Force in
    October 2004.
        Tactical Aircraft Integration.--Naval Tactical Aircraft (TacAir)
    Integration makes all Naval Strike-Fighter aircraft available to meet
    both Services' warfighting and training requirements. As part of the
    TacAir Integration plan, a Marine Fighter-Attack squadron will
    eventually be attached to each of the ten active Carrier Air Wings and
    will deploy aboard aircraft carriers. In addition, three Navy Strike-
    Fighter squadrons will be assigned into the Marine Corps' Unit
    Deployment Program for land-based deployments. Force structure
    reductions associated with this plan should result in a total cost
    savings and cost avoidance of over $30 billion. The integration of the
    fifth Marine squadron into a Carrier Air Wing and the first Navy
    squadron into the Unit Deployment Program are scheduled for later this
    year.
        TacAir Integration retains our warfighting potential and brings the
    Naval Services a step closer to the flexible sea based force we
    envision for the future. A leaner, more efficient naval strike-fighter
    force is possible because of three underlying factors. The first factor
    is ``Global Sourcing''--the ability to task any non-deployed Department
    of Navy squadron to either Service's missions, allowing for a reduction
    in force structure. Second, ``Level Readiness''--applying the proper
    resources to training, maintenance, and modernization, will ensure the
    smaller force is always capable of responding to the Services' and
    Nation's needs. Third, the development of an operational concept that
    will efficiently manage the employment of this integrated strike-
    fighter force within the naval and joint context. Support of readiness
    accounts, modernization programs, and our replacement of the F/A-18 and
    AV-8B with the Short Takeoff and Vertical Landing (STOVL) Joint Strike
    Fighter will ensure the potential promised by this integration.
    Better Business Practices
        The Secretary of Defense and Secretary of the Navy have emphasized,
    and the Marine Corps is committed to, business transformation in order
    to optimize resource allocation. The Marine Corps is employing a
    variety of business transformation initiatives including: competitive
    sourcing of over 3,500 commercial billets to save $57 million annually;
    outsourcing garrison food service in our mess halls in the continental
    United States in to free up 594 Marines for other duties; using public-
    private ventures to fund new family housing and to increase the
    quantity of safe, comfortable, and affordable homes; consolidation of
    equipment maintenance from five to three echelons in order to improve
    maintenance effectiveness and efficiency; and, regionalizing garrison
    mobile equipment to realign Marines and dollars with higher priorities.
    The Marine Corps continues to develop its activity based costing
    capability in order to support fact based decision making.
        In March 2003, the Marine Corps began participation in the Navy
    Marine Corps Intranet (NMCI)--a network outsourcing initiative that
    will provide a common end-to-end Department of Navy information system
    capability for voice, video, and data communications. By outsourcing
    information technology services not considered to be core competencies,
    the Marine Corps has been able to return 355 supporting establishment
    personnel structure spaces to the operating forces. As a result of this
    improved business practice, the NMCI operating environment will promote
    greater naval interoperability. The Marine Corps will continue to
    refine our business practices and increase the effectiveness of
    warfighting potential.

                   OUR MAIN EFFORT--EXCELLENCE IN WARFIGHTING

    Training
        Training at Eglin Air Force Base.--In anticipation of the cessation
    of naval expeditionary forces training in Vieques, Puerto Rico, efforts
    began in September 2002 to establish a new training capability at Eglin
    Air Force Base (AFB). Training at Eglin AFB is envisioned to provide a
    near term pre-deployment training capability for East Coast Navy
    Amphibious Ready Groups/Expeditionary Strike Groups and Marine
    Expeditionary Units (Special Operations Capable), with the potential to
    be part of the long-term solution. The training concept was designed
    for up to two 10-day training periods per year. The long-term objective
    is that during each 10-day event, the Expeditionary Strike Groups will
    be able to conduct the full spectrum of training required. The Marine
    Corps has invested approximately $4.2 million in environmental
    assessment/mitigation and infrastructure development required to
    establish an initial training capability at Eglin AFB.
        In December 2003, the Marine Corps completed its first 10-day
    training period at Eglin AFB, at an additional cost of approximately $1
    million. The Marine Corps is assessing the quality the training offered
    at Eglin AFB while continuing to explore and develop other options,
    both within the United States and abroad. While Eglin AFB has the
    potential for enhanced live fire and maneuver training, developing this
    capability will require a significant investment by the Department of
    the Navy and Department of Defense to upgrade existing facilities.
        Joint National Training Capability.--As described by the Deputy
    Secretary of Defense: ``The centerpiece of our Training Transformation
    effort will be a Joint National Training Capability.'' The Joint
    National Training Capability is one of the three pillars of Training
    Transformation, and will improve joint interoperability by adding
    certified ``joint context'' to existing Service training events. The
    Joint National Training Capability is a cooperative collection of
    interoperable training sites, nodes, and events that synthesizes
    Combatant Commander and Service training requirements with the
    appropriate level of joint context.
        The first in a series of pre-Initial Operational Capability Joint
    National Training Capability exercises was held in January 2004,
    linking a Marine Corps Combined Arms Exercise with live Close Air
    Support sorties, a Navy Stand-off Land Attack Missile Exercise, an Army
    rotation at the National Training Center, and an Air Force Air Warrior
    Exercise. The Marine Corps will be actively involved in future Joint
    National Training Capability exercises including Combined Arms
    Exercises and Marine Aviation Weapons and Tactics Squadron-1 evolutions
    scheduled for fiscal year 2005. The Marine Corps is fully engaged in
    the Joint National Training Capability program development, and is on
    track to enhance Service core-competency training with the appropriate
    level of joint context. In concert with the other Services, the Marine
    Corps is working with Joint Forces Command to refine the phrase ``joint
    context,'' certify ranges, and accredit exercises to ensure the force
    is training properly.

    Infrastructure
        Blount Island Facility.--The acquisition of the Blount Island
    facility in Jacksonville, Florida, is critical to our Nation and to our
    Corps' warfighting capabilities. Blount Island's peacetime mission is
    to support the Maritime Prepositioning Force. Its wartime capability
    and capacity to support massive logistics sustainment from the
    continental United States gives it strategic significance. The Blount
    Island facility has a vital role in the National Military Strategy as
    the site for maintenance operations of the Maritime Prepositioning
    Force. The Marine Corps thanks Congress for your role in supporting
    this acquisition project. Phase II, funded by the $115.7 million
    appropriated in the Defense Authorization Act of 2004, gives the Marine
    Corps ownership of the leased maintenance area and supporting dredge
    disposal site consisting of 1,089 acres.
        Encroachment.--We are grateful to Congress for providing a tool to
    facilitate the management of incompatible developments adjacent to or
    in close proximity to military lands. We are working with state and
    local governments and with non-governmental organizations such as the
    Trust for Public Lands, The Nature Conservancy, the Sierra Club, and
    the Endangered Species Coalition to acquire lands buffering or near our
    bases including Camp Lejeune, Marine Corps Air Station Beaufort, and
    Camp Pendleton. In return for our investment, the Marine Corps is
    receiving restrictive easements that ensure lands acquired remain
    undeveloped and serve as buffer zones against future encroachment on
    our bases.
        We are also grateful to Congress for codifying legislation that
    gives us the opportunity to partner with the U.S. Fish and Wildlife
    Service and State fish and game agencies in order to manage endangered
    species present on military lands. Management via our Integrated
    Natural Resources Management Plans, which we prepare in partnerships
    with these agencies, allows us to protect and enhance populations of
    these species on our lands while allowing Marines to train. Finally, we
    support the Secretary of Defense's efforts to provide flexibility under
    the Clean Air Act and to clarify the governing authorities under which
    DOD would manage operational ranges. The Marine Corps strives to be a
    good environmental steward and the growing number of endangered species
    on our lands and their increasing populations are examples of our
    successes. We remain committed to protecting the resources entrusted to
    us by the American people.
        Base Realignment and Closures.--A successful Base Realignment and
    Closure process, resulting in recommendations in 2005, is critically
    important to the Nation, the Department of Defense, and the Department
    of Navy. By eliminating excesses and improving efficiencies, the armed
    services will achieve a transformation of our infrastructure in the
    same way we are achieving a transformation of our forces.
    Recommendations will be developed only after a thorough and in-depth
    review.

    Command and Control
        Naval expeditionary warfare will depend heavily on the ability of
    the forces to share linked and fused information from a common source
    which will, in turn, ensure command and control of widely dispersed
    forces. Exploiting the use of space, ground and aerial platforms
    requires a networked, protected, and assured global grid of
    information. Leveraging command and control technology to improve our
    interoperability continues to be our focus of effort.
        Advances in technology and a need to leverage existing
    infrastructure requires us to establish a new Information Technology
    (IT) framework--one that is more reliable, efficient, secure, and
    responsive. This new IT framework must provide enhanced information
    access and improved information services to the operating forces. By
    streamlining the deployment of IT tools and realigning our IT
    resources, the Marine Corps Enterprise IT Services will shift the
    burden away from the operating forces by establishing a new IT
    environment. This IT environment will fuse and integrate Department
    wide, net-centric enterprise services to provide a common set of
    sharable IT services to the entire Marine Corps. By eliminating
    individual organizations providing duplicative and redundant services,
    we will reduce the IT burden on the operating forces through enterprise
    provided IT services, and improve our ability to process information
    and enhance the speed of decision-making.

    Intelligence
        Our fiscal year 1996 through fiscal year 2004 enhancements to
    Marine intelligence improved the intelligence capability within Marine
    units and established a ``reach-back'' intelligence production
    capability between forward deployed units and our Marine Corps
    Intelligence Activity in Quantico, Virginia. These improvements are
    proving to be remarkably beneficial to our efforts in Operation IRAQI
    FREEDOM and Operation ENDURING FREEDOM. Marine intelligence is
    concurrently supporting ongoing operations, preparing for near term
    operations, and transforming our intelligence systems to meet future
    warfighting requirements. Marine Intelligence Specialists have provided
    significant contributions to ongoing operations in Iraq, Afghanistan,
    and Djibouti and will play a crucial intelligence role as Marine Forces
    return to Iraq in larger numbers this year. Before again deploying to
    Iraq, we will train over 400 Marines in basic Arabic to aid in our
    efforts to work with the Iraqis at the patrol level, and we will
    provide enhanced language training for some of our Arabic heritage
    speakers and others trained linguists to increase our operational
    influence and effectiveness. Meanwhile, we prepare for future conflicts
    by ensuring that our intelligence training and systems funded in the
    fiscal year 2005-2009 program incorporate the latest technological
    advances and become more capable of seamless interoperability with the
    systems used by other armed services and national agencies.

    Mobility
        As preliminary assessments of operations in Iraq highlight,
    operational and tactical mobility are essential to overcome the current
    range of threats. The ability to rapidly respond and then flexibly
    adapt to a changing situation is critical to address future challenges.
    Increasing the speed, range, and flexibility of maneuver units that are
    enhanced by logistical power generated from the sea, will increase
    naval power projection. The following initiatives are vital to achieve
    greater operational mobility:
        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 range, speed,
    payload, and survivability will generate truly transformational
    tactical and operational capabilities. With the Osprey, Marine forces
    operating from a 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.--Continued replacement of our aging KC-130 fleet with KC-
    130J aircraft is necessary to ensure the viability and deployability of
    Marine Corps Tactical Air and Assault Support well into the 21st
    Century. Acquisition of the KC-130J represents a significant increase
    in operational efficiency and enhanced refueling and assault support
    capabilities for the Marine Corps. The KC-130J provides the aerial
    refueling and assault support airlift resources needed to support the
    Osprey, the Joint Strike Fighter, and the Marine Air-Ground Task Force
    and Joint Force Commanders.
        Expeditionary Fighting Vehicle (EFV).--The EFV, formerly known as
    the Advanced Amphibious Assault Vehicle (AAAV), will provide Marine
    surface assault elements the requisite operational and tactical
    mobility to exploit fleeting opportunities in the fluid operational
    environment of the future. Designed to be launched from Naval
    amphibious shipping from over the horizon, the EFV will be capable of
    carrying a reinforced Marine rifle squad at speeds in excess of 20
    nautical miles per hour in sea state three. This capability will reduce
    the vulnerability of our naval forces to enemy threats by keeping them
    well out to sea while providing our surface assault forces mounted in
    EFVs the mobility to react to and exploit gaps in enemy defenses
    ashore. Once ashore, EFV will provide Marine maneuver units with an
    armored personnel carrier designed to meet the threats of the future.
    EFV will replace the aging Assault Amphibious Vehicle (AAV). With its
    high speed land and water maneuverability, highly lethal day/night
    fighting ability, and advanced armor and Nuclear Biological and
    Chemical protection, the EFV will significantly enhance the lethality
    and survivability of Marine maneuver units and provide the Marine Air
    Ground Task Force and Expeditionary Strike Group with increased
    operational tempo across the spectrum of operations.
        Power Projection Platforms.--Combined with embarked Marines,
    amphibious warships provide our Nation with both a forward presence and
    a flexible crisis response force. These power projection platforms give
    decision-makers immediately responsive combat options. As the Seabasing
    concept matures, enhanced naval expeditionary forces will be optimized
    to provide a full spectrum of capabilities.
        Inherent in the Sea Strike pillar of the Seabasing concept is the
    ability to both strike with fires from the sea base and from units
    maneuvering within the littoral region. The dilemma that these two
    offensive capabilities impose on an enemy and the multitude of options
    they create for our leadership increase our ability to achieve success
    effectively and efficiently. The built-in flexibility and survivability
    of amphibious ships coupled with their combat sustainment capability
    ensure the rapid achievement of a full range of offensive operations
    that either allow us to accomplish operational objectives directly or
    enable us to set the conditions for major joint operations. The ability
    to defeat an anti-access strategy--before it is completed or even once
    it is developed--is vital to our national security objectives.
        The LPD 17 class amphibious ships, currently planned or under
    construction, represent the Department of the Navy's commitment to a
    modern expeditionary power projection fleet. These ships will assist
    our naval forces in meeting the fiscally-constrained programming goal
    of lifting 2.5 Marine Expeditionary Brigade (MEB) Assault Echelons
    (AEs). The lead ship detail design has been completed and the
    construction process is over 80 percent complete with a successful
    launch in July 2003. Production effort is focused on meeting test
    milestones for a November 2004 delivery. Construction of LPD 23 has
    been accelerated from fiscal year 2006 to fiscal year 2005, leveraging
    fiscal year 2004 Advance Procurement resources provided by Congress.
    LPD 17 replaces four classes of older ships--the LKA, LST, LSD, and the
    LPD--and is being built with a 40-year expected service life.
        LHAs 1-5 reach their 35-year service life at a rate of one per year
    in 2011-15. LHD-8 will replace one LHA when it delivers in fiscal year
    2007. In order to meet future warfighting requirements, the Navy and
    Marine Corps leadership is evaluating LHA (Replacement)--LHA(R)--
    requirements in the larger context of Joint Seabasing, power
    projection, the Global War On Terrorism, and lessons learned from
    Operations ENDURING FREEDOM and IRAQI FREEDOM. The resulting platform
    will provide a transformational capability that is interoperable with
    future amphibious and Maritime Preposition Force ships, high-speed
    connectors, advanced rotorcraft like the MV-22, Joint Strike Fighter,
    and Expeditionary Fighting Vehicles.
        Maritime Pre-positioning Force.--The leases on the current Maritime
    Prepositioning Ships begin to expire in 2009. The Maritime
    Prepositioning Force (Future)--MPF(F)--will be a key enabler to sea-
    based operations. It will allow us to better exploit the maneuver space
    provided by the sea to conduct joint operations at a time and place of
    our choosing. When the MPF(F) becomes operational, the maritime
    prepositioning role will expand far beyond its current capability to
    provide the combat equipment for a fly-in force. MPF(F) will serve four
    functions that the current MPF cannot: (1) at-sea arrival and assembly
    of units; (2) direct support of the assault echelon of the Amphibious
    Task Force; (3) long-term, sea-based sustainment of the landing force;
    and (4) at-sea reconstitution and redeployment of the force. The
    enhanced capabilities of these ships will significantly increase the
    capability of the Sea Base--in the Seabasing concept--to provide
    unimpeded mobility and persistent sustainment. This enhanced sea base
    will minimize limitations imposed by reliance on overseas shore-based
    support, maximize the ability of the naval elements of the joint force
    to conduct combat operations from the maritime domain, and enable the
    transformed joint force to exploit our Nation's asymmetric advantage of
    our seapower dominance. The ability to rapidly generate maneuver forces
    from this sea base will augment our forward presence and forcible entry
    forces, increasing the overall power and effect of the joint campaign.
    Acceleration of the lead MPF(F) from fiscal year 2008 to fiscal year
    2007 in the fiscal year 2005 budget reflects an emphasis on Seabasing
    capabilities. The fiscal years 2005-2009 plan procures three MPF(F)
    ships and advanced construction for an MPF(F) Aviation variant.
        High Speed Connectors.--High Speed Connectors (HSC) possess
    characteristics that make them uniquely suited to support the Sea Base
    and sea-based operations. HSCs are unique in combining shallow draft,
    high speed and large lift capacity into a single platform. HSCs will
    help create an enhanced operational capability by providing commanders
    with a flexible platform to deliver tailored, scalable forces in
    response to a wide range of mission requirements. The range and payload
    capacity of HSCs, combined with their ability to interface with current
    and future MPF shipping and access austere ports greatly enhances the
    operational reach, tactical mobility, and flexibility of sea-based
    forces.
        Mine Countermeasure Capabilities.--There is a great need to
    continue the development of our mine countermeasure capabilities. A
    major challenge for the Navy-Marine Corps Team is ensuring the
    effective delivery of ground forces ashore when mines and other anti-
    access measures are employed in the surf zone or ashore beyond the high
    water mark. We are currently exploring with the Navy how the technology
    of Joint Direct Attack Munitions (JDAM) promises a short-term solution
    and may lead to a better long-term solution to the challenge of mines
    in the surf zone. Using unitary bombs, fuses, and JDAM tail kits, we
    have designed a mine countermeasure known as the JDAM Assault Breaching
    System (JABS). Preliminary test results are showing promise as an
    interim solution for breaching surface laid minefields and light
    obstacles in the beach zones. Further testing and characterization of
    the JABS system is proceeding throughout fiscal year 2004 with tests
    against Surf Zone Mines and obstacles.
        Some aspects of JABS development may lead to a long-term solution
    to the mine threat. One possible solution that is envisioned includes
    developing bomb-delivered darts that physically destroy buried mines in
    the Beach Zone and Surf Zone region. In addition, the Navy has adopted
    the Marine Corp Coastal Battlefield Reconnaissance and Analysis (COBRA)
    mine sensor system for the beach zone with a planned product
    improvement enhancement for COBRA called the Rapid Overt Airborne
    Reconnaissance (ROAR) that extends detection to the very shallow water
    and the surf zone regions by 2015. In addition, the Marine Corps seeks
    to improve breaching capability beyond the high water mark by
    developing both deliberate and in-stride breaching systems. These
    include the Advanced Mine Detector program and the Assault Breacher
    Vehicle program.

    Fires and Effects
        As events over the past year have demonstrated--and suggest for the
    future--the increased range and speed of expeditionary forces and the
    depth of their influence landward has and will continue to increase. To
    fully realize these capabilities the Nation requires a range of
    complementary, expeditionary lethal and non-lethal fire support
    capabilities. During Operation IRAQI FREEDOM, sixty AV-8B Harrier
    aircraft were based at-sea aboard amphibious shipping--minimizing the
    challenge of airfield shortages ashore. This prelude to future sea-
    based operations was extremely successful with over 2,200 sorties
    generated--mostly in support of I Marine Expeditionary Force ground
    units. A key factor to this success was the employment of forward
    operating bases close to the ground forces which allowed the AV-8B to
    refuel and rearm multiple times before returning to their ships. In
    addition, the complementary capabilities of surface and air delivered
    fires were highlighted in this campaign. Further, the importance of
    both precision and volume fires was critical to success. Precision
    fires assisted in reducing both collateral damage and the demands on
    tactical logistics. I Marine Expeditionary Force also validated the
    requirement for volume fires in support of maneuver warfare tactics.
    These fires allow maneuver forces to take advantage of maneuver warfare
    opportunities before precision intelligence can be developed and
    precision fires can be employed against fleeting targets or rapidly
    developing enemy defensive postures.
        Short Take Off Vertical Landing Joint Strike Fighter (STOVL JSF).--
    The STOVL JSF will be a single engine, stealth, supersonic, strike-
    fighter capable of short take-offs and vertical landings. The aircraft
    is designed to replace the AV-8B and FA-18 aircraft in the Marine Corps
    inventory. The operational reliability, stealth, and payload capability
    designed into the STOVL JSF represents a great improvement in combat
    capability over existing legacy platforms. The aircraft is in the
    second year of a 10-12 year development program. The STOVL JSF force is
    integral to our future warfighting capabilities. Its design and
    capabilities will fulfill all Marine Corps strike-fighter requirements
    and better support the combined arms requirements in expeditionary
    operations. Continued support of the STOVL JSF is vital to the Marine
    Corps.
        Indirect Fires Support.--In response to identified gaps in our
    indirect fires capability, the Marine Corps undertook an effort to
    replace the aging M198 155 mm towed howitzers and provide a full
    spectrum all-weather system of systems fires capability. Operations in
    Iraq confirmed this requirement and the direction that the Marine Corps
    has undertaken. This system of systems will be capable of employing
    both precision and volume munitions.
        The Lightweight 155 mm howitzer (LW 155) is optimized for
    versatility, pro-active counter fire and offensive operations in
    support of light and medium forces. It supports Operational Maneuver
    from the Sea and replaces all M198's in the Marine Corps, as well as
    the M198's in Army Airborne, Light Units and Stryker Brigade Combat
    Teams. Compared to the current system, the LW 155 is more mobile,
    capable of more rapid deployment, more survivable, and more accurate.
    Initial operational capability is expected during fiscal year 2005, and
    a full operational capability will be reached three years later.
        The High Mobility Artillery Rocket System (HIMARS) fulfills a
    critical range and volume gap in Marine Corps fire support assets by
    providing twenty-four hour, all weather, ground-based, responsive,
    General Support, General Support-Reinforcing, and Reinforcing indirect
    fires throughout all phases of combat operations ashore. HIMARS will be
    fielded in one artillery battalion of the active component and one
    battalion of the reserve component. An initial operational capability
    is planned for fiscal year 2007 with a full capability expected during
    fiscal year 2008. An interim capability of one battery during fiscal
    years 2005-2006 is also currently planned.
        The Expeditionary Fire Support System (EFSS) is the third element
    of the triad of ground firing systems, and it will be the principal
    indirect fire support system for the vertical assault element. EFSS-
    equipped units will be especially well suited for missions requiring
    speed, tactical agility, and vertical transportability. The estimated
    Approved Acquisition Objective is eighty-eight systems. Initially, this
    provides eleven batteries to support our Marine Expeditionary Units
    (Special Operations Capable). Initial operational capability is planned
    for fiscal year 2006 and full operational capability is planned for
    fiscal year 2008.
        Naval Surface Fire Support.--An important element of our fires and
    effects capability will continue to be surface ships that provide
    direct delivery of fires from the sea base. 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. In the critical
    period of the early phases of the forcible entry operations when
    organic Marine Corps ground indirect fires are not yet or just
    beginning to be established, the landing force will be even more
    dependent on the complementary capability required of naval surface
    fire support assets. To date, no systems have been introduced or are
    being developed which meet near or mid-term Naval Surface Fire Support
    requirements. The DD(X) destroyer--armed with two 155 mm Advanced Gun
    Systems--continues to be the best long-term solution to satisfy the
    Marine Corps' Naval Surface Fire Support requirements. Our Nation's
    forcible entry, expeditionary forces will remain at considerable risk
    for want of suitable sea-based fire support until DD(X) joins the fleet
    in considerable numbers in 2020. Currently, the lead ship of this class
    will not be operational until fiscal year 2013. In addition, the Marine
    Corps is closely monitoring research into the development of electro-
    magnetic gun technology to support future range and velocity
    requirements. Electro-magnetic guns could potentially provide Naval
    Surface Fire Support at ranges on the order of 220 nautical miles, and
    could eventually be incorporated into ground mobile weapon systems like
    the future Expeditionary Fighting Vehicles as size, weight, and power
    technology hurdles are overcome.
        H-1 (UH-1Y/AH-1Z).--The current fleet of UH-1N utility helicopters
    and AH-1W attack helicopters is reaching the end of their planned
    service life and face a number of deficiencies in crew and passenger
    survivability, payload, power availability, endurance, range, airspeed,
    maneuverability, and supportability. The Department of the Navy has
    determined that the H-1 Upgrade Program is the most cost effective
    alternative that meets the Marine Corps' attack and utility helicopter
    requirements until the introduction of a new technology advanced
    rotorcraft aircraft. The H-1 Upgrade Program is a key modernization
    effort designed to resolve existing safety deficiencies, enhance
    operational effectiveness of both the UH-1N and the AH-1W, and extend
    the service life of both aircraft. Additionally, the commonality gained
    between the UH-1Y and AH-1Z (projected to be 84 percent) will
    significantly reduce life-cycle costs and logistical footprint, while
    increasing the maintainability and deployability of both aircraft. On
    October 22, 2003, the program to enter Low-Rate Initial Production
    (LRIP), and on December 29, 2003 the LRIP Lot 1 aircraft contract was
    awarded to Bell Helicopter.
        Information Operations.--The Marine Corps is exploring ways to
    ensure Marines will be capable of conducting full spectrum information
    operations, pursuing the development of information capabilities
    through initiatives in policy and doctrine, career force, structure,
    training and education, and programs and resources. Marine forces will
    use information operations to deny, degrade, disrupt, destroy or
    influence an adversary commander's methods, means or ability to command
    and control his forces.
        New Weapons Technologies.--The Marine 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 to potentially support a tactical gunship high
    energy laser weapon, (2) Active Denial System--a high-power millimeter-
    wave, non-lethal weapon, (3) Free Electron Lasers for multi-mission
    shipboard weapons application, and (4) various promising Counter
    Improvised Explosive Device technologies.

    Logistics and Combat Service Support
        Logistics Modernization.--Since 1999, the Marine Corps has
    undertaken several logistics modernization efforts to improve the
    overall effectiveness of our Marine Air-Ground Task Forces as agile,
    expeditionary forces in readiness. Some of these initiatives have
    reached full operational capability or are on track for complete
    implementation. Applying the lessons learned from Operation IRAQI
    FREEDOM resulted in new initiatives concerning naval logistics
    integration, naval distribution, and the integration of the Combat
    Service Support Element with Marine Corps Bases.
        The Marine Corps' number one logistics priority is the re-
    engineering of logistics information technology and the retirement of
    our legacy systems, which is described in the next section. The Marine
    Corps is working to enhance the integration of its distribution
    processes across the tactical through strategic levels of warfare,
    providing the warfighter a ``snap shot'' view of his needed supplies in
    the distribution chain to instantly locate specific items that are en
    route. This capability, described in the following section, will result
    in increased confidence in the distribution chain and will reduce both
    the quantity of reorders and the amount of inventory carried to support
    the war fighter.
        Logistics Command and Control.--The Global Combat Support System-
    Marine Corps is the Marine Corps' portion of the overarching Global
    Combat Support System Family of Systems as designated by the Joint
    Requirements Oversight Council and the Global Combat Support System
    General Officer Steering Committee. It is a Marine Corps acquisition
    program with the responsibility to acquire and integrate commercial off
    the shelf software in order to satisfy the information requirements of
    commanders, as well as support the Marine Corps Logistics Operational
    Architecture. The Global Combat Support System-Marine Corps program
    will provide modern, deployable information technology tools for all
    elements of the Marine Air-Ground Task Force. Existing Logistics
    Information Systems used today in direct support of our Marine Air
    Ground Task Forces are either not deployable (mainframe based) or are
    deployable with such limited capability (tethered client server) that
    our commanders lack in-transit and asset visibility. Global Combat
    Support System-Marine Corps requirements include a single point of
    entry, web based portal capability to generate simple requests for
    products and services, logistics command and control capability to
    support the Marine Air Ground Task Force, and back office tools to
    assist in the management of the logistics chain. These capabilities
    will improve warfighting excellence by providing commanders with the
    logistics information they need to make timely command and control
    decisions. The key to improving the accuracy and visibility of materiel
    in the logistics chain is to establish a shared data environment.
        End-to-End Distribution.--The Marine Corps is aggressively pursuing
    standardization of the materiel distribution within the Marine Corps to
    include interfacing with commercial and operational-level Department of
    Defense distribution organizations. Furthermore, distribution processes
    and resources used in a deployed theater of operations need to be the
    same as those used in garrison. We strongly support United States
    Transportation Command's designation as the Department of Defense's
    Distribution Process Owner. In this capacity, United States
    Transportation Command can more easily integrate distribution processes
    and systems at the strategic and operational levels and provide the
    Department of Defense a standard, joint solution for distribution
    management. Materiel End-To-End Distribution provides Marine commanders
    the means to seamlessly execute inbound and outbound movements for all
    classes of supply while maintaining Total Asset and In-transit
    Visibility throughout the distribution pipeline.

                                   CONCLUSION

        The Marine Corps remains focused on organizing, training, and
    equipping our forces to best support combatant commanders throughout
    the spectrum of combat. Incorporating recent experiences, increasing
    our forces' integration with joint capabilities, exploiting the
    flexibility and rapid response capabilities of our units, and
    preserving the adaptability of our Marines, will collectively lead to
    more options for the combatant commanders. The Marine Corps' commitment
    to warfighting excellence and the steadfast support we receive from
    this Committee will lead to success in the Global War On Terrorism
    while helping to ensure America's security and prosperity.
                                     ______

                Biographical Sketch of General Michael W. Hagee

        General Hagee graduated with distinction from the U.S. Naval
    Academy in 1968 with a Bachelor of Science in Engineering. He also
    holds a Master of Science in Electrical Engineering from the U.S. Naval
    Postgraduate School and a Master of Arts in National Security and
    Strategic Studies from the Naval War College. He is a graduate of the
    Command and Staff College and the U.S. Naval War College.
        General Hagee's command assignments include: Commanding Officer
    Company A, 1st Battalion, 9th Marines (1970); Platoon Commander,
    Company A and Commanding Officer Headquarters and Service Company,
    First Battalion, First Marines (1970-1971); Commanding Officer,
    Waikele-West Loch Guard Company (1974-1976); Commanding Officer, Pearl
    Harbor Guard Company (1976-1977); Commanding Officer, 1st Battalion,
    8th Marines (1988-1990); Commanding Officer, 11th Marine Expeditionary
    Unit (Special Operations Capable) (1992-1993); Commanding General, 1st
    Marine Division (1998-1999); and Commanding General, I Marine
    Expeditionary Force (2000-2002).
        General Hagee's staff assignments include: Communications-
    Electronics Officer, 1st Marine Air Command and Control Squadron
    (1971); Assistant Director, Telecommunications School (1972-1974);
    Training Officer, 3d Marine Division (1977-1978); Electrical
    Engineering Instructor, U.S. Naval Academy (1978-1981); Head, Officer
    Plans Section, Headquarters Marine Corps (1982-1986); Assistant Chief
    of Staff, G-1, 2d Marine Division (1987-1988); Executive Officer, 8th
    Marines (1988); Director Humanities and Social Science Division/Marine
    Corps Representative, U.S. Naval Academy (1990-1992); Liaison Officer
    to the U.S. Special Envoy to Somalia (1992-1993); Executive Assistant
    to the Assistant Commandant of the Marine Corps (1993-1994); Director,
    Character Development Division, United States Naval Academy (1994-
    1995); Senior Military Assistant to the Deputy Secretary of Defense,
    Washington, D.C.; Executive Assistant to the Director of Central
    Intelligence (1995-1996); Deputy Director of Operations, Headquarters,
    U.S. European Command (1996-1998); and Director Strategic Plans and
    Policy, U.S. Pacific Command (1999-2000).
        His personal decorations include the Defense Distinguished Service
    Medal with palm, Defense Superior Service Medal, Legion of Merit with
    two Gold Stars, Bronze Star with Combat ``V'', Defense Meritorious
    Service Medal, Meritorious Service Medal with one Gold Star, Navy
    Achievement Medal with one Gold Star, the Combat Action Ribbon, and the
    National Intelligence Distinguished Service Medal.

        Senator Stevens. Well, gentlemen, those are some of those
    finest statements I have heard in my period on this committee,
    and I thank you all very much for the depth of your comments
    and for the reports you've made.

                              FLEET RESPONSE PLAN

        Admiral, could you explain a little bit more about this
    Fleet Response Plan?
        Admiral Clark. Absolutely, Mr. Chairman.
        Fundamentally, it goes like this. We had deployed--I like
    the word ``surge''--Operation Iraqi Freedom, we surged over 50
    percent of the fleet. One of our tasks was to--our business,
    was telling our people, ``Look, our job is to make sure that we
    get the most bang for the buck for the taxpayers of America.
    And is there any way we can put this back together when we
    bring it home that will make it more effective than it is
    today?'' And, fundamentally, Mr. Chairman, what we've done is
    this. We put a group of sailors in the room, and asked them,
    ``Are there things that we can do that will make us better?''
    They came back with an approach, and said, ``If we look at
    different ways to phase our training, if we look at new ways we
    can put maintenance concepts together that will increase the
    operational availability of our units, we will be able to
    provide 50 percent more operational capability in response to
    the President if a national emergency occurs.''
        And what that means today is this. We analyzed the risk and
    the requirement for naval forces. As the major combat phase of
    Operation Iraqi Freedom wound down, the Secretary of Defense
    looked at where we were. And I said, ``If we bring these forces
    home now--the risk looked like we can bring the principal naval
    force home--we will put this back together in a way that makes
    it more ready than ever before.'' And, Mr. Chairman, I can tell
    you, this morning, if the requirement came today, I could surge
    that force forward again, the exact same force that we sent
    forward for Operation Iraqi Freedom. It is ready to go this
    morning. And what we have done is give the Nation a more
    responsive Navy that can respond to a crisis and an emergency
    anywhere in the world.
        Senator Stevens. Thank you very much.

                                      V-22

        General Hagee, I thank you, again, for the opportunity to
    fly the V-22. It was an experience of a lifetime. I enjoyed
    being in the aircraft. But I understand now that there's been
    flight restrictions placed upon the V-22. Could you tell us
    what's caused that?
        General Hagee. Yes, sir, I can. And we appreciate you
    coming down and flying in that truly transformational platform.
        Back in December, when one of the--it happened to aircraft
    number ten, which is instrumented, was flying towards the edge
    of the envelope in an area where we're normally not going to
    conduct flight operations, an input at the control caused some
    yawing in the aircraft. We brought the aircraft down. It took
    us some time to reproduce that particular phenomena. It was not
    uncontrolled. There was no effect on safety of flight. This
    aircraft happened to have a new flight control software package
    put into it. So we believe it is a problem in the software. We
    are investigating that right now. We haven't come to complete
    closure on how to solve that. We are very confident that we
    can.
        We have put no flight restrictions on any of the
    instrumented aircraft. We have put some flight restrictions on
    the uninstrumented aircraft. We believe that we'll have a
    solution to this software, possibly hardware solution, by May
    of this year. We do not see that impacting the continued
    evaluation of the aircraft, sir.
        Senator Stevens. Will it affect the period for testing? It
    this going to prolong the period of testing the V-22.
        General Hagee. Sir, I think on the operational tests we're
    not quite sure on that. But, as you know, this is not a time-
    driven evaluation; this is an event-driven evaluation. We'll
    have a much better feel for that in about April or May, sir.
        Senator Stevens. Well, again, I think it was a joy to be
    able to fly that airplane. It does things that one would never
    expect to be able to do, and particularly because of the
    software that you've adapted into it. I would appreciate it if
    you'd keep me posted on that if there's anything additional we
    can do. I would like to be sure that we do keep the schedule
    for putting that aircraft really into full operation, as far as
    the marines are concerned.
        General Hagee. We will keep this committee informed, Mr.
    Chairman.
        Senator Stevens. Thank you.

                                     DD(X)

        Admiral Clark, the DD(X) includes transformational
    technologies that bring what my staff believes are
    revolutionary capabilities to the fleet. Can you accomplish the
    acquisition strategies for the DD(X) within the cost and
    schedule that is currently outlined, in view of those new
    technologies?
        Admiral Clark. Well, Mr. Chairman, I agree completely with
    your staff and their assessment of what DD(X) is all about. It
    is a revolutionary platform. And I believe that when we have
    DD(X), it is going to change the way we do everything. And what
    I think is going to happen is that when we realize these
    capabilities, it will set us on a path to spiral to our other
    platforms, as well.
        Let's talk about cost and schedule. As you know, we
    received permission to fund this ship in Research and
    Development. There are certainly risk areas in the development
    of something that is this revolutionary, including an all-
    electric platform, an advanced gun system that will fire, with
    precision, at a [deleted]. You know, this will give us the
    ability to support General Hagee and all of his marines, and
    cover [deleted] more area in support of them than we can do so
    today with a gun system. And I have great confidence in that
    path that we're on, because there have been mitigation
    strategies put in place to address the new technologies that
    we're bringing on. However, I would not be so bold as to say
    that any of us can predict the future. But I have great
    confidence in the team that is putting the plan together to
    create the future. And what does that mean? Well, it means
    this. One of the reasons that we asked to put this platform in
    research and development is that we wanted to have the same
    kind of tools to do this kind of new development that we have
    with other combat systems, and we haven't done that with ships
    before. And we believe that this was the right way to go at
    this.
        So I don't see any cause for concern on the horizon. I'm
    confident with where we are in the reports that I'm getting
    from the acquisition community. But I also believe that the
    path that we set on last year to fund this in research and
    development (R&D) is absolutely the right approach.

                            END STRENGTH REDUCTIONS

        Senator Stevens. Mr. Secretary, I am informed that there
    are plans to reduce the end strength of the Navy by 7,900
    sailors, and another 8,700 sailors over the next 4 years. We're
    told, to be on the safe side, that that is premature. What do
    you say to that?
        Mr. England. Well, let me reiterate, to some extent, the
    opening comments that Admiral Clark made regarding our
    manpower. We do want the very best-trained force, but we also
    do not want an extra force. We do not want people that we do
    not need in this great Navy, frankly. And as we have made
    improvements, in terms of our ships, in terms of our manning--
    for example, if you go back, Senator, to the ships, Senator
    Inouye, that are sitting out in Hawaii, the U.S.S. Missouri, it
    had almost 2,000 sailors when it was active. Now we have about
    350 sailors on our destroyers. That will go down, on DD(X), to
    about 150 sailors. So our manpower demands are less. A lot of
    our older ships, we are retiring, where most of the manpower
    has the highest demands. Also, our maintenance is better, our
    reliability is better on these ships, technology is helping us.
        So we are not stressed, in terms of our force, Senator. I
    mean, we have efficiencies in the system, effectiveness, in
    terms of better performance, that we can reduce the size of our
    force. So this is a planned program, and we are not doing this
    in advance. I mean, we clearly understand the forces we need,
    and we are taking them down after we have new processes and new
    technology in place. So this reflects, frankly, the
    effectiveness, the efficiency of the Navy and our plans, in
    terms of staffing this great naval force.

                           JOINT STRIKE FIGHTER (JSF)

        Senator Stevens. Could you briefly--I've got a minute
    left--briefly tell us about the Joint Strike Fighter? Just an
    update on the Joint Strike Fighter?
        Mr. England. First, I hope one day you'll be able to fly
    the Joint Strike Fighter, Senator. But, look, it is a very,
    very important program. There are three development programs
    going on simultaneously. As you may know, we delayed the
    program 1 year because we wanted to keep them together, and we
    wanted to make sure that we solved all the problems early as we
    transitioned from the prototypes into development. So we did
    delay the program deliberately 1 year because our feeling is,
    by doing this now, we will save a lot of money and time later
    on. These are very important programs to us. There is an Air
    Force version and a Navy version. They are both, frankly,
    overweight, but not to the point that they will miss their key
    performance parameters. So we know we will realize significant
    improvement there.
        The short take-off and vertical landing (STOVL) version,
    which is now both for the Marine Corps and also for the U.S.
    Air Force, also is experiencing a weight problem, because it is
    the most difficult design challenge. On the other hand, it
    provides us the greatest advantage, and it will replace the AV-
    8B, which is currently becoming long in the tooth and having
    difficulty in the Marine Corps. So it provides us the very
    greatest step forward, in terms of capability. It is harder to
    do, but I am absolutely convinced the design is on track and we
    will achieve the key performance parameters for these three
    airplanes.
        This program also has a large international content. We
    have about $4.5 billion funded by our friends and allies around
    the world, who are also relying on these three airplanes. This
    is a highly integrated program. It is technically challenging,
    but it is also very achievable, and the results will be
    dramatic for the entire military and for our friends and allies
    around the world.
        I would encourage full support for this program, because it
    is so crucial to so many services. And, Senator, I can tell
    you, from my own personal experience, I am convinced that these
    three airplanes will all be of significant value, major value,
    to our military forces.
        Senator Stevens. I'm smiling, Mr. Secretary, because
    someone the other day asked me why do people use that phrase
    ``long in the tooth,'' as when we get older, our teeth get
    shorter.
        Senator Inouye.

                           SUBMARINE FORCE STRUCTURE

        Senator Inouye. Mr. Secretary, your stated submarine force
    structure calls for 55 boats, but it appears that by 2020, we
    may have about 30. You have indicated that this would be
    unacceptable. Do you have alternative programs or platforms to
    adjust this force structure?
        Mr. England. Senator, right now, as you probably recall, we
    start a multi-year--last year, we were authorized to go into a
    multi-year, so we have a five-submarine multi-year program that
    will continue for 5 years. So we are, frankly, fixed at this
    rate of one a year for the next 5 years. That was the program
    authorized by the Congress. At the same time, you are right, if
    we continue at that level, our submarine force will, indeed,
    shrink. So, recognizing that, we have initiated a study to
    better understand the size of our submarine force and how we
    might afford a larger force as we go forward. That study will
    be part of our 2006 deliberations. So we will come to the
    Congress next year with our submarine program, in terms of
    recommendations. We are working that now. We will be briefing
    that shortly within the Department of Defense, and that will be
    part of our whole development of the fiscal year 2006 budget.
    So, with your permission, I would like to defer a final answer
    on that. Frankly, for the next 5 years, next 4 years now, we
    are locked into this one submarine a year because of the multi-
    year program. So it does give us some time to work, and we will
    have that resolved in fiscal year 2006.
        Senator Inouye. Well, we'll wait for your study.

                                  END STRENGTH

        Admiral Clark, the Secretary spoke of how your end strength
    may be reduced. As the operational chief here, do you agree
    with that?
        Admiral Clark. I certainly do, Senator. And, in fact, you
    can blame me for this, or give me credit, whichever way you
    choose to do so. I have been--I want to report publicly, I have
    been under no pressure from anybody senior to me in the chain
    of command to affect my manning.
        What we have been doing is this. Actually, I've learned a
    lot from working with Secretary England. He worked in the big-
    business world. And, you know, I grew up driving destroyers and
    haven't run an operation nearly as big as we're now given the
    task to operate. Part of our journey, Senator, is that we
    have--as I said in my opening statement, we have come to grips
    with the cost of manpower. And I've made a commitment to our
    people that goes like this. ``We will invest in your growth and
    development if you promise to serve and support and defend the
    Constitution of the United States and be part of the Navy. We
    are going to invest in you. And we're going to make sure that
    you have opportunities to make a difference in our Navy.''
    That's what I promised them. But I've also asked my leaders,
    the Senior Executive Service (SES) civilians and the admirals
    in this organization, that are given the task to function as
    executives, ``Look, we've got to figure out how to run this
    business more effectively. This is for the taxpayers. How do we
    give them the most return on their investment?'' And I will
    tell you that we are actively seeking ways to learn how to
    operate this organization more effectively and more
    efficiently. We are making great progress, and that is the
    result of the 7,900 you see today.
        My objective is this. I've learned that 10,000 people
    equals $1.5 billion a year, and I'm turning that money into
    recapitalization. The year I got to this job--and, Mr.
    Chairman, you indicated this is my fourth visit to see you
    all--the year I got here, the investment in shipbuilding was
    $4.7 billion. The investment today is $11.1 billion, and I've
    been shooting to get toward a goal of $12 billion a year. We
    have done this fundamentally by redirecting resources inside
    the Navy and becoming more effective. And so we intend to
    continue working toward that, and I want to promise you that
    part of this is because the technology insertion is allowing us
    to do tasks with fewer people. As he said, DD(X) is going to
    have far fewer people, the CVN 21 is going to have a 900-person
    reduction in the crew, and these kinds of things make these
    savings possible. And our investments make it possible. We
    intend to keep looking for ways to operate more effectively and
    put that money in tomorrow's Navy.

                              SHIP FORCE STRUCTURE

        Senator Inouye. Mr. Secretary, I'm certain you recall that
    about 10 years ago, when we discussed warfare, they spoke of
    major war, regional war, guerrilla war, et cetera, and you
    needed so many ships for that, and so many men for that. Is the
    force structure that you're proposing for regional war or
    global war?
        Mr. England. Senator, it's for whatever the Navy is called
    upon, sir. I mean, I believe as we go forward, and particularly
    what is in the 2005 budget, with our new ships, our Littoral
    combat ship and DD(X), along with LHA, the new LHA(R) we're
    looking at and the new ships that we'll have, in terms of pre-
    positioning, the future ships, there are concepts there that
    provide us significantly greater flexibility, in terms of
    projecting power forward. As General Hagee said, we believe
    this is a 50-percent improvement, in terms of response time to
    put power forward, which is very, very important, in terms of
    affecting the outcome of whatever events may be occurring.
        I think my judgment--and I believe I can speak for the CNO
    and the Commandant here--it's our judgment we have approaches
    now that allow the Navy and the Marine Corps, our naval force,
    to respond to any type of threat to America, whether it be
    regional or a larger war. I mean, we are prepared now to
    respond and do this very, very quickly. That's our objective--
    very, very quick response.

                                 FORCIBLE ENTRY

        Senator Inouye. General Hagee, the Department, last year,
    announced that it had initiated a study on forcible entry
    options. And we've been told that this study may have an impact
    upon programs like the LPD-17, the LHA(R), and the
    Expeditionary Fighting Vehicle. What is the status? And what
    can we expect?
        General Hagee. Thank you for that question, sir.
        First, there are two studies, really. There is a joint
    forcible-entry study that the Navy and the Marine Corps took
    the lead on and conducted last year. That is going to inform a
    much larger joint study on joint forcible entry that's being
    led by the joint staff right now. We hope to have the results
    of that study sometime late spring, early summer. I think it's
    really important to look at forcible entry from a joint
    standpoint.
        As I mentioned in my opening statement, the joint forcible-
    entry study that we did within the Navy and the Marine Corps,
    the analysis of alternatives that we received on LHA(R), and
    the analysis of alternatives that we have just received a
    preview on for the maritime pre-positioning force has helped
    inform us on how we can project combat power faster, more
    combat power ashore faster, in the future. And what you're
    going to see Admiral Clark, myself, and the Secretary talk
    about is the integration of these platforms. They are
    complementary platforms. The maritime pre-positioning ship, the
    new maritime pre-positioning ship, the new LHA(R), which--we
    want to leverage the Joint Strike Fighter and the MV-22
    capabilities; we want to make that ship more aviation-capable--
    the LPD-17, the connectors between those platforms, the DD(X),
    the Littoral combat ship, all will come into play, and we are
    starting to inform ourselves on what the advantages and
    disadvantages of having one platform versus the other. For
    example, on your maritime pre-positioning-ship future, if that
    has a well deck, or if that has what we're calling an
    integrated landing platform, which is platform external to the
    ship, where the ship can put that platform on the leeward side
    and actually do offloads onto that platform in a higher-state
    sea, this could impact the ultimate design of other amphibious
    ships and what we would be carrying on those amphibious ships.
        So we are trying very hard and, I think, somewhat
    successfully, in looking at how all of these platforms come
    together to deliver a better capability, a more agile
    capability to the regional combatant commander.
        Senator Inouye. And this is realistic?
        General Hagee. Yes, sir. We have talked with scientists, we
    have talked with physicists. This is not a physics problem;
    this is an engineering problem. It's also a finance problem, or
    an issue. And that's why the Secretary of the Navy and Admiral
    Clark and myself have urged support of the fiscal year 2005
    budget, sir.
        Senator Inouye. I thank you very much, General.
        Admiral Clark. Mr. Chairman, may I comment on that
    question?
        Senator Stevens. Yes, sir, Admiral.
        Admiral Clark. Senator Inouye, I'd just like to say that
    our task is to deliver the Marine Corps to the fight. And I see
    the integration between MPF(F), Maritime Pre-Positioned Force
    Future, and the LHA(R) as a critical intersection of new
    capability unlike what we have today. I absolutely do not
    believe that LHA(R) is just a repeat of the LHDs that we have
    today. It is going to be a much better, more capable platform
    that optimizes the aviation capability we are investing in. And
    that, coupled with the new concepts that we are pushing forward
    on MPF future, will give the marines much more surgeable
    capability. We talked about surging the Navy; it will improve
    the Marine Corps' surgeable capability, too, which is why the
    future will see General Hagee and the marines producing combat
    capability faster anywhere in the world we have to. And these
    two new capabilities are going to make that happen.
        Senator Inouye. Thank you very much. I'll be waiting for
    your report.
        Admiral Clark. Yes, sir.
        Senator Stevens. Thank you very much.
        Senator Cochran.

                    LHA(R) AND SHIPBUILDING INDUSTRIAL BASE

        Senator Cochran. Mr. Chairman, thank you.
        Mr. Secretary, I notice, in the budget submission, the
    construction of the LHA(R) has been delayed 1 year from what
    was planned in last year's 2004 budget, and that you've
    identified $250 million for the construction of the LHA(R) as
    an unfunded requirement. I understand that a delay in the
    construction of this ship is likely to lead to an increase in
    the cost of the ship. Can you discuss the need to maintain the
    shipbuilding industrial base associated with the construction
    of the LHA(R)?
        Mr. England. Senator, I'd be happy to. You raised a valid
    issue here. We originally had LHA(R) proposed for fiscal year
    2007, in terms of our planning in the Future Years Defense
    Program (FYDP). We moved that out to fiscal year 2008, and we
    did it, frankly, because of funding issues. We are required, as
    you know--to fully appropriate the money, fund the ship
    immediately, on day one. That would have required, in fiscal
    year 2007, that we fund the full value of the ship in fiscal
    year 2007. Frankly, we did not have the resources to do that,
    so we've moved it to fiscal year 2008, where it was affordable,
    in terms of our projection on fiscal year 2007 and on fiscal
    year 2008. It does leave us with a problem right now, in terms
    of the yard, because we would like to start at least advanced
    procurement, some incremental funding, I guess you would call
    it, at that point in time. But, at this point, we are required
    to fund the full ship. Now, as we go forward in 2006 and 2007,
    we're going to have to look at those funding profiles to see
    how we can handle that situation. But, frankly, that was--your
    point is valid--it was strictly a decision we had to make based
    on what we saw as the funding profiles in those years.
        Senator Cochran. Thank you.

                    LARGE DECK AMPHIBIOUS SHIPS REPLACEMENT

        General Hagee, can you discuss the need to replace the
    large-deck amphibious ships that have exceeded their designed
    service life?
        General Hagee. Yes, sir, Senator. Thank you, also, for that
    question. And it really goes back to my answer to Senator
    Inouye.
        I don't think that we can look at one individual ship. As
    Admiral Clark talked about, we're looking at the LHA(R), which
    is going to be, as I mentioned, an increased aircraft-capable
    ship. We're going to leverage the Joint Strike Fighter and the
    MV-22 capabilities. It's also going to complement the Maritime
    Pre-Positioning Force Future ship, and will complement the LPD-
    17. So as we build the LHA(R), and as we build MPF future, I
    believe that you will see some of the equipment that has, in
    the past, been carried on these large amphibs, move over to the
    Maritime Pre-Positioning Force Future ship.
        What we want is the capability to operate from the sea base
    in a state-four sea. We want to be able to do to the reception,
    staging, onward movement, integration, the arrival and
    assembly, at sea. Today, we cannot do that, because we--as
    Admiral Clark mentioned, we dense-pack our maritime pre-
    positioning ships, so we cannot do a selective offload. So as
    we replace the amphibs, we're looking at how LHA(R), LPD-17,
    LHD, which is going to be around for some time, thank goodness,
    and Maritime Pre-Positioning Force Future are going to
    integrate with one another.

                           TILT-ROTOR PILOT TRAINING

        Senator Cochran. Mr. Secretary, last year's appropriations
    bill and the accompanying report indicated the importance of
    training student pilots in the same type aircraft that they
    would eventually be called on to fly in the fleet after they
    graduate from pilot training. The report required the
    Department of the Navy to submit a tilt-rotor pilot training
    roadmap to the committee prior to the submission of this year's
    budget request, although this report has not been submitted. I
    wonder if you have any information about whether we can expect
    this report or whether you can share with us now what the
    response of the Navy is to this provision in last year's bill
    directing the Department to consider tilt-rotor pilot training
    at an existing naval training site?
        Mr. England. Senator, my apologies. The report is somewhat
    late, because, frankly, it's gone through some revision. But we
    are about to publish that report, and we should have that
    report to you here, I would expect, in about 1 week. So we're
    very close to having that out.
        And if you don't mind, I'm going to defer the question to
    General Hagee, since it's his V-22 and his pilots, I believe
    he's probably better able to answer this question for you.
        But we will have the report to you in about 1 week, sir.
        [The information follows:]

                               Information Paper

        Subject: V-22 Tilt-rotor pilot training roadmap
    1. Purpose
        The Defense Appropriations Bill, 2004, directed the Secretary of
    the Navy to submit a Tilt-rotor pilot training roadmap before the
    presentation of the fiscal year 2005 budget estimate.
    2. Key Points
        The MV-22 Student Undergraduate Pipeline Training and Fleet
    Replacement Squadron Analysis, Final Report, 1999, was conducted by
    Logicon, Inc.
        The purpose of the study was to examine the MV-22 pilot, aircrew
    and maintainer training pipelines and determine if the planned training
    could meet the demands of an increased aircraft delivery rate. If the
    planned training was insufficient to meet the demand, alternatives must
    be developed to increase the throughput. If the demand could be met
    with planned resources, the recommendations for improving the training
    in order to produce more capable personnel in the most efficient and
    cost effective manner must be provided.
        The study's recommendations have been included and expanded on in
    the V-22's training plan. Interactive Media Instruction (IMI), state of
    the art procedural trainers and simulators as well as the activation of
    an Aircrew Training Systems (ATS) command to address the intricacies of
    the training continuum are some examples.
        The current tilt-rotor pilot training roadmap represents a non-
    material solution to implement the study's recommendations. A powered
    lift trainer for Undergraduate Pilot Training would address the
    inefficiencies in the current roadmap, increase the number of trainable
    tasks, and decrease time to train while increasing throughput.
        The current tilt-rotor pilot training roadmap has three major
    elements: Primary, Advanced and Fleet Replacement training (Figure 1).
    Each element contains academics, simulator and aircraft phases.
      --Undergraduate Pilot Training (UPT).--UPT for tilt-rotors begins
            with primary flight training in the TC-34C. Pipeline selection
            occurs upon completion primary training.
        --Students selected for the tilt-rotor training pipeline will
                continue advanced training in the TC-12B.
        --Following training in the TC-12B tilt-rotor UPT students will
                complete their advanced training in the TH-57B/C.
        --Upon completion of the advanced training students are designated
                Naval aviators and are assigned to the Fleet Replacement
                Squadron for training in the MV-22.
      --Fleet Replacement Squadron (FRS).--Provides combat capable tilt-
            rotor training for selected aircrews.
        --Combat capable training consists of the completion of the 100
                level training tasks listed in Marine Corps Order P3500.34A
                (Aviation Training and Readiness Manual, MV-22).
        --Advanced Tilt-rotor Training Unit (ATTU). The ATTU is resident in
                the FRS and trains selected aircrew in advanced tactics
                instruction (200 level and above as specified in the Marine
                Corps Order P3500.34A). The ATTU provides transitioning
                squadrons the experience base to complete the transition as
                a core capable squadron per the MV-22 T&R.
        The Deputy Commandant for Aviation has submitted a Universal Needs
    Statement (UNS) for a powered lift trainer for Undergraduate Pilot
    Training. Successful incorporation of the UNS in the requirements
    generation process will form the basis for an Analysis of Alternatives
    at Milestone A.

        Senator Cochran. Okay.
        General Hagee, do you have any comments?
        General Hagee. Yes, sir, I do. First off, we are absolutely
    committed to having a joint training site. Any service that's
    going to fly the MV-22, we think we could get a lot of synergy
    by having one training site. We have initially stood up the
    training squadron down at New River, North Carolina. But I can
    tell you, Senator, we are open to looking at any and all sites
    that might work better.

                                MISSILE DEFENSE

        Senator Cochran. Admiral Clark, we've talked before about
    the plans that you envision for the Navy participation in
    missile defense. We have the near-term ballistic missile threat
    to the homeland that has attracted the attention of planners.
    Could you update the committee on the progress the Navy is
    making in the area of ballistic missile defense and how it fits
    in your overall sea-shield strategy?
        Admiral Clark. Yes, sir. Thank you, Senator. That's a very
    important question for the future, and clearly the kind of
    things that General Hagee and I envision the Navy/Marine Corps
    team doing in the future requires our ability to climb in the
    ring with an enemy, and to be able to defend ourselves, and
    project defense and offense. And so ballistic missile defense
    capability is crucial to the future, no doubt about it.
        The way, of course, as you well know, it is unfolding, the
    acquisition--the development responsibility and acquisition
    responsibility, has been given to the Missile Defense Agency
    (MDA). What that suggests is that--General Kadish has been
    given the responsibility to develop what's best for the Nation.
    And this year has been an exciting year in the Navy. Under MDA,
    we have participated in several tests this year. All but one
    have been fully--completely successful, and one had a problem
    in a late-guidance phase of the test. But what that suggests to
    us is this, sea-based missile defense is going to be a part of
    the interim missile defense capability that has been called
    down by the President. That will stand up in fiscal year 2005,
    this budget year that we're talking about here this morning.
        And I would just also report to you, Senator, that during
    Operation Iraqi Freedom, we had prototype capability
    functioning in the Arabian Gulf, and operating from one of our
    Aegis DDGs. They experienced significant success tracking
    missiles that were fired by the Iraqis at our forces, and we
    were connected in an integrated way. We could not--we were not
    equipped to fire, but detect and track; and that detect and
    track algorithm functioned very successfully.
        And so the bottom line of the status report is that we
    anticipate modifying a number of our Aegis destroyers to bring
    this kind of capability to the Nation by the end of this
    calendar year, and we will be a part of that interim
    capability.
        Senator Cochran. Thank you.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you.
        Senator Burns.
        Senator Burns. Thank you, Mr. Chairman. I think we have--
    I've already submitted my statement. And thank you, gentlemen,
    for your service to your country and for coming today.
        I will probably focus on some of the things that interest
    me. My main interest is the troops on the ground, our enlisted
    people that are in harm's way, and especially like an operation
    like we have in Iraq, who are most vulnerable to being hurt
    very badly, and most vulnerable in a hostile action.

                              SHIPBUILDING PROGRAM

        But I wanted to ask Admiral Clark--since you've increased
    the funds on shipbuilding from the $4.7 billion to the $11.1
    billion, with what has happened in the world and the changing
    landscape, have you changed the thrust of your investment to
    meet those times? And could you give me an example on the
    challenges you face, now that the landscape does change from
    time to time?
        Admiral Clark. Well, absolutely.
        Here's the way I would lay it out. And Senator Inouye asked
    this question of the Secretary, do we have the numbers right?
    And, you know, where do we need to go? This morning, we have
    295 ships in the Navy. Is this enough? I don't believe it is. I
    have said that for 3 years and 8 months.
        Having said that, I believe we're on the right track. We
    can't undo history. And we didn't buy enough ships in the
    1990s. Over the decade of the 1990s, our shipbuilding budget
    averaged just slightly over $6 billion a year. And in order to
    have the Navy--when I got to this job, the Congressional Budget
    Office (CBO) had just put out a study that said you had to
    invest $12 billion a year to sustain yourself, and that's why
    $12 billion was my target.
        How does it stack out in priorities? And, by the way, I
    have said I think we need about 375. I've never said it's
    exactly 375. We have to move toward the capability of the
    future, and capability is more important than numbers. But
    there's a fact here--is that--we've studied this long and hard,
    Senator; I haven't figured out how to defy the laws of physics
    and make a ship be in more than one place at a time. You know,
    it's a fundamental reality.
        I want to say that the Secretary has allowed me to speak to
    that number. It's not a number that has been sanctioned by the
    Department. It is the CNO's view. My view this morning is that
    we're continuing to learn.
        Let me give you an example. We are completing, as I speak,
    an experiment that I've had going on for 2 years. I have had a
    destroyer, forward deployed, has been in Operation Iraqi
    Freedom every step of the way, for 2 years. I have been
    rotating crews to that ship. That's a Pacific-based ship, and a
    Pacific-based ship spends at least one-third of its
    deployment--because it's a vast area, of course--one-third of
    its 6-month deployment, is spent in transit. I've had it over
    there 2 years, rotated four crews. It'll be home soon. We're
    going to put the technical people onboard, and we're going to
    learn the lessons from that. But I'll tell you what it's
    already shown me is that that's a concept I need to exploit. It
    gives me more operational availability for the investment.
        What have I learned about the priorities? Senator Cochran
    asked about missile defense. It absolutely is a requirement for
    the future. We do not have money in the budget yet, but I have
    spoken openly, and it's in my written testimony, that CG(X), a
    ship designed from the ground up to do that missile-defense
    mission, is going to have to be built. It has to be built when
    we know exactly what the size and shape of the future missile
    defense systems are going to be.

                           LITTORAL COMBAT SHIP (LCS)

        More importantly, the Littoral combat ship that is at the--
    down-select--in the next 2 months, this new class ship is
    designed to do one principal thing: take on the enemies where
    they're going to take us on. No Navy is going to take us on toe
    to toe. We are too big and too strong. They're going to come
    after us in the littorals, they're going to come after us
    asymmetrically. Senator, I need that ship tomorrow morning. I
    cannot get it fast enough. I need the ability to take on the
    way they're going to come at us, anti-submarine warfare in the
    near-land arena, anti-surface attacks, mine warfare. And we're
    going to build this ship from the ground up to be optimized to
    handle unmanned vehicles, and we're going to change the
    calculus on the enemy. This is going to be a much smaller ship,
    and we're going to have to build it in numbers. And I think we
    need 50 or 60 of them. But the reason I don't know the exact
    number is that I'm still working the manning concept, and am I
    going to be able to keep them forward, like I've just done with
    this ship for 2 years. And if I can, I will need not as many as
    if I had to rotate them every time. So those are the way I see
    the priorities. Coupled with what we described with General
    Hagee in the new Navy/Marine Corps team and the capability that
    we will project with MPF Future, which I believe should be
    considered as an integral part of the fighting force. Today's
    MPF maritime pre-positioned ship is a warehouse, floating
    warehouse. Tomorrow's MPF isn't going to be like that. It will
    have command and control spaces in it, it will have aviation
    decks on it to surge aircraft forward and so forth. That's the
    way I see the future, Senator.

                           RECRUITMENT AND RETENTION

        Senator Burns. General Hagee, give me an idea--recruitment
    and retention of our troops, are you making your quotas? Are
    you getting the kind of people that you want? I would ask all
    three of you that. Are there areas of concern or--how are we
    doing?
        General Hagee. Sir, thank you for that question. I am happy
    to report to you that we are doing very well in both areas.
    Last November, we had 100 straight months of meeting mission,
    recruiting, and we are getting the right type of young American
    man and young American woman, and I think you saw that in
    Operation Iraqi Freedom. Unbelievable quality. Just had a
    report yesterday, we are on track to make mission this month.
    But we are doing very well on recruiting.
        As far as retention is concerned, for this fiscal year we
    are about 80 percent of attaining our first-term re-enlistment
    goal, and we are about 85 percent of achieving our second-term
    re-enlistment goal. And, of course, we have all the way to
    September to accomplish those two missions.
        So I am very happy with where we are right now. I have to
    be--I'll be frank with you, sir, we are putting a lot of
    demands on our marines. The sun never sets on the Marine Corps.
    It is around the world, and they are doing a magnificent job.
    And I have asked all the commanders to keep a good feel on the
    pulse of the marines and their families for any indication that
    retention or recruiting is going to turn in the wrong
    direction. Right now, we do not have those signals, sir.
        Senator Burns. Admiral Clark, do you want to comment about
    that?
        Admiral Clark. Yes, I sure do. Highest retention in the
    history of the Navy, ever, 38 or 39 straight months. Quality,
    we have increased quality 4 percent, to the 94 percent level
    last year, and our goal was 95 percent high-school graduates.
    Quality is high. It's fundamentally because of the things the
    Congress has done. And at the end of my opening statement, I
    said that they're reading the signals of the citizens of
    America. They're listening. They're watching. And the support
    that America is sending to our people is resonating with them.
    They believe in their cause, and they're committed to making a
    difference.
        Now, here's one concern I have. Because we're successful,
    please don't take my tools away. The tools that I've got are
    the things that are allowing me to reshape my force, and I need
    them. And our people are responding to this challenge we're
    giving them. ``We're going to give you a chance to make a
    difference, and we're going to invest in your growth and
    development,'' and that's what they're responding to, Senator.
        Senator Burns. Mr. Secretary, do you want to make a
    comment? Because I have another question and comment.
        Mr. England. Just one comment. When I first testified, we
    were recruiting 58,000 a year, in terms of sailors, and now we
    are recruiting about 40,000 because our retention is so high.
    So it's an indication, just in terms of numbers that we're
    recruiting, much lower than we were in the past.

                       AIRSPACE AVAILABILITY FOR TRAINING

        Senator Burns. We lost our ability to train into--at
    Vieques, as you well know, down in Puerto Rico. It continues to
    be a problem among all our services that have a flight wing to
    them, or whatever. And I noticed that, in your statement, you
    mention Eglin as a joint place where you're training. I would
    just make a comment that we, in Montana, are--when you look at
    this country, and the airspace that we have in which to train,
    it continues to shrink. And I think we should look at some
    areas where we have airspace in which to train, and also the
    infrastructure in which to hold those people that are in
    training, and their aircraft. So we would visit with you about
    that.

                       IMPROVISED EXPLOSIVE DEVICE (IED)

        And then I have some other questions about detecting these
    explosives in Iraq. I know--you know, that's why I say, our men
    and women are in a most vulnerable position. They are the
    target, and they're unprotected, and I'm concerned about body
    armor. Are they protected? Can we detect those roadside bombs,
    General Hagee? And is there new technology which allows us to
    do that? And if not, are we looking into maybe some
    unconventional areas to gain that technology?
        General Hagee. Yes, sir. That is, without a doubt, our
    highest priority right now, is to ensure that all of our
    servicemen and women overseas are protected. I can tell you
    that the 25,000 marines and sailors that are going into
    Operation Iraqi Freedom, they all have the so-called Small Arms
    Protective Inserts (SAPI) plates. Everyone will be wearing it.
        There is no magic answer, there is no one solution for the
    improvised explosive device. It is a combination of
    technologies and tactics and procedures. We have worked very
    closely with the United States Army to learn everything that we
    can from them. The Army has stood up a task force called Task
    Force IED, improvised explosive device. It is a joint task
    force that is focused on this particular problem. What
    technologies we can bring to bear, what are the tactics,
    techniques, and procedures that we need to use on the
    battlefield, and, probably most importantly, where do we have
    gaps? Because every time that we come up with a solution, the
    opposing side is looking for a way to get around that
    particular solution. So we are working very hard in those
    particular three areas.
        We're going to have about 3,000 vehicles of various kinds--
    Humvees, 5 ton, 7 ton--on the road and in harm's way. Every one
    of those vehicles, before it goes out on patrol in Iraq, will
    be hardened. We have a few of the so-called up-armored Humvees,
    but not very many of those. So what we have done is, we have
    purchased kits, we have cut steel, and we have sufficient
    quantity to harden every single one of those vehicles.
        We have done the same with our aircraft. We have put on the
    most modern aircraft survivability equipment that this Nation
    has produced. We have also taken our pilots, every single one
    of them that will be going over there, they've gone through a
    2-week very intensive training course down in Yuma, Arizona,
    flying against the type of threat that we believe is over
    there. Once again, marrying the technology and the tactics,
    techniques, and procedures.
        Once again, to be frank, sir, it's still a dangerous place
    over there. We are aware of that, and all of us are working
    very hard in that area.
        Senator Burns. Well, you know, my father was always
    criticized for working mules. You know, everybody else worked
    horses. This was back in the old days, and they said, ``Why do
    you work them darn mules? You know, they'll kick you, bite you,
    and everything else.'' And Dad would kind of say, under his
    breath--he said, ``Well, you've got to be smarter than the
    mule.'' So we've got to be a little bit smarter, too, and a
    jump ahead. And I thank you for your thoughts.
        Senator Stevens. Senator McConnell.

                                      MK45

        Senator McConnell. Thank you, Mr. Chairman.
        Let me begin by thanking all three of you for your
    extraordinary contributions to the war on terrorism, which has,
    so far, been successful beyond anyone's expectations. It's been
    a great American success story, and it continues.
        Mr. Secretary, despite the efficiencies and cost savings
    achieved by the privatization of the Louisville Naval Ordnance
    Station, the Navy has relied heavily on congressional add-ons
    in order to meet its requirements for overhauls and for
    procurement of large-caliber guns. This committee has provided
    sufficient additional funding for the MK45 gun overhaul orders
    to extend the life of this important weapon. And several of us
    have sought funding for modifications that allow the Navy to
    modernize this gun so that it can bridge the gap between the
    Navy's budget for this program and its requirements until the
    Navy's cruiser modernization and DD(X) destroyer programs
    actually begin production.
        It's my understanding the Navy's request today contains no
    provision for MK45 gun modifications to support cruiser
    modernization, and despite Congress' efforts to restore this
    program last year and this committee's expression of the
    importance of the MK45 gun modernization. The so-called cost
    savings associated with this move are not particularly
    impressive with cutting these modifications, particularly given
    the negative impact this will have on the Navy's industrial
    base, the Marine Corps' requirement for naval surface-fire
    support, and the costs associated with restarting the
    production line for the DD(X) advanced gun system.
        That having been said, General Hagee, it's my understanding
    that the Marine Corps supports the modernization of the MK45
    gun to improve its capacity for precision fire support. Would
    reinvesting in the modernization of this gun improve the Navy's
    ability to provide the kind of fire support you need for your
    marines onshore?
        General Hagee. Sir, I think Admiral Clark and I have
    discussed this. We like that gun. But it's an affordability
    issue, as you mentioned. And what we have to do is balance the
    weapon systems that we have out there with the risks. We've got
    DD(X) coming on, which is going to have a significant
    capability. The aviation fires is, of course, a part of this
    particular equation, and moving the lightweight 155 and the
    expeditionary fire-support system ashore is also a part of the
    fires equation. So it's integrating all of the fires that we're
    going to have.
        I would repeat, would we like to have that gun? Yes, sir.
    But when you look at the affordability, the risk, and then look
    at all the other fire systems that we have out there, I support
    Admiral Clark in his decision.
        Senator McConnell. So then are you telling me that the
    marine's near-term need for precision naval surface fire
    support is adequate?
        General Hagee. No, sir, I'm not. It is not.
        Senator McConnell. Therefore, Secretary England, I hope you
    will reconsider the decision to cut funding for this important
    modification to the MK45 gun system. It seems to me, clearly,
    you need this, at least on an interim basis, until you get to
    the next weapon. Do you have any observations about this?
        Mr. England. Just one, and then I would turn it over to the
    CNO--all right, go ahead----
        Admiral Clark. Why don't I----
        Senator McConnell. Jump right in.
        Admiral Clark. All right. We're excited about the extended
    range guided munition (ERGM) development, and the round that is
    going to give us extended-range precision capabilities for the
    marines. Senator, General Hagee's got it exactly right. When I
    sit down at the end of the day, I don't have all the resources
    I'd like to have; I've got more than I've ever had before, but
    technology costs money. And so I made this judgement that, with
    the cruisers, who would be primarily focused on operations near
    the carrier, and not in the near-land scenario supporting the
    marines, I would not do the modification for the cruisers, but
    I would focus that money on the DDGs. So that's the decision
    that we made. If we had unlimited resources, we absolutely
    would have procured this modernization for every one of the
    guns that we have. We would.
        We expect this--even though AGS, the advanced gun system,
    is coming, we expect that this gun is going to be around for a
    long time. And, frankly, when you look at future warfare, the
    ability to provide precision on the battlefield to the Marine
    Corps is what is going to help us transform the way we fight.
        So it's an affordability issue. We made the judgement based
    upon where the cruisers will spend most of their life, and
    that's, you know, more in the deep-blue environment instead of
    the near-land brown-water environment.
        Senator McConnell. Summing it up, if you had the resources,
    you'd like to do what I suggest.
        Admiral Clark. That is correct.
        Senator McConnell. I thank you.
        Thank you, Mr. Chairman.

                                     CG(X)

        Senator Stevens. Thank you very much.
        Admiral, I went to the archives to look up the CG(X) that
    you presented in May 2003, a long-range shipbuilding plan, that
    indicated that those would be procured sometime after the end
    of this first decade. As a matter of fact, it looks like the
    first procurement would be 2018. The description you just gave
    it indicates that it probably is going to be needed sooner. Are
    you going to revise the plan?
        Admiral Clark. I would tell you that the far-out plan
    doesn't have great granularity to it yet, Mr. Chairman. I
    believe that this is contingent totally upon the way the
    technology develops and the size missile system that MDA
    decides that this platform is going to have to carry--all of
    that work is still ongoing.
        I do believe that 2018 is likely to be too far away. I have
    not refined it because we're outside the FYDP--this platform I
    expect to be fundamentally built upon the hull and the
    technology that exists in DD(X), so that we will spiral the
    technology from DD(X) to CG(X). And I would like to tell you
    that I don't have great confidence in the date that is in that
    extended projection, and it is one of the issues that we have--
    that we are analyzing as we move forward with the Missile
    Defense Agency.
        Senator Stevens. Well, is the DD(X) to be designed so that
    it could be evolved into the CG(X)?
        Admiral Clark. It is my intention to recommend that we do
    just that, and that is what our intent has been. But I would
    reserve this point, Mr. Chairman, that it might have to be
    scaled up to do the kinds of things that may be required. So
    what I'm really trying to say is, we will spiral the technology
    in DD(X), and that's all of the pieces, including all electric
    and the hull form. You know, we kind of stopped talking about
    how advanced this platform really is. I mean, let me just give
    you one fact as an example. This ship, in its size, is going to
    have the radar cross-section of a fishing boat because of the
    advanced design, stealthy design, of the platform. That's the
    kind of technology we want for the future. We want the
    technology that gives us the ability to man it with fewer
    people.
        So I expect it to be built upon the frame of a DD(X). It
    might have to be made a little bit larger.
        Senator Stevens. Do you have money in the research budget
    now for that CG(X)?
        Admiral Clark. I do not have that money in the budget yet.
    No, sir, I do not.
        Senator Stevens. Is any additional money needed for the
    DD(X) to evolve into the CG(X)?
        Admiral Clark. We have placed the emphasis on the research
    and development to do the risk mitigation that I spoke about in
    my earlier answer, to develop DD(X). And, you know, when we're
    2 to 3 years into this, into the construction, I believe we're
    going to know the things that we need to know, where we need to
    put the follow-on research and development.
        It is fundamentally going to be an issue of the hull form,
    and scaling it up, and we do need to get started on that
    development.

                           ADVANCED RADAR TECHNOLOGY

        Senator Stevens. What about the development of the radar
    suite and the other air-to-air missile defense research? Is
    that in the budget?
        Admiral Clark. There are resources against advanced radar
    technology. We have resources against digitalizing the new
    Aegis architecture. I could take, for the record, the specifics
    to--I want to make sure I'm telling you that we've got the
    right levels there, because, frankly, this interfaces with MDA
    and their budget, and I need to go check that out.
        [The information follows:]

        The Navy is already conducting solid-state S-Band
    prototyping and we have requested $220 million in additional
    research and development funding in the fiscal year 2005
    budget. This solid-state active phased array radar would allow
    increased capability against cruise missile and air-breather
    threats, as well as simultaneous performance of long-range
    Ballistic Missile Defense missions.
        Our current plan puts us on a path for initiation of radar
    system development in fiscal year 2008 and ultimately,
    integration with the CG(X) platform in the 2020 timeframe. It
    is important to note that we are continually analyzing the rate
    and evolution of future threats to refine the pace of our own
    capabilities development. As we gain fidelity in the timeline
    for CG(X), we will likely need to adjust future budget
    submissions to appropriately align the schedules.
        The nexus of this capability will greatly enhance the
    forward, credible, assured access of our Naval forces through
    mid-century.

        Senator Stevens. Well, I was just going to ask whether that
    interface has taken place yet. The National Missile Defense
    System has a substantial amount of research money. Are you
    included in that?
        Admiral Clark. Absolutely. For example, I indicated that by
    the end of this year I expect to have 15 ships modified to our
    existing Aegis systems, with advanced algorithms in the
    software to do the detect and track, and the funds for that
    activity are coming from MDA.
        Senator Stevens. Well, I think we'd like to visit with you
    later, in a classified situation, to discuss this. At least I
    would. Because I would like to make sure, during our watch,
    that this thing is moving forward as rapidly as possible.
        Admiral Clark. Yes, sir. We'd be very--I absolutely believe
    that would be very helpful.
        Senator Stevens. Senator Inouye.
        Senator Inouye. Thank you very much.

                              SUPPLEMENTAL FUNDING

        General Hagee, you have a significant contingent of marines
    in Haiti, and this deployment was not accounted for in fiscal
    year 2004. And now you are going to be deploying a large
    contingent to Iraq. Can you fund this without a supplemental?
        General Hagee. Sir, as you know, the Department did receive
    a supplemental for fiscal year 2004, and we are capturing those
    costs, both the costs that we're starting to incur with the
    deployment of marines down into Haiti, and we are most
    definitely capturing those costs of deployment into Iraq. And
    we are reporting those costs up to the Office of the Secretary
    of Defense (OSD), and we expect to be reimbursed for those
    funds.

                                   BODY ARMOR

        Senator Inouye. Mr. Secretary, Senator Burns brought up a
    very interesting, but tragic, matter. Unofficially, I've been
    advised that in Operation Iraqi Freedom, there are
    disproportionately more amputees than chest or stomach
    injuries. For one thing, you have body armor that cover your
    chest and stomach area, but nothing for the legs and arms. Are
    we doing any research to, for example, protect the foot and
    ankle or the hands and wrists?
        Mr. England. Senator, there's a lot of work underway. And
    I'd like to, if I can, get together with you separately on this
    subject, because there is work, but I'd rather not discuss it
    here, if we can. But there's definitely work underway to expand
    the type of coverage we have, in terms of protection for our
    men and women in combat. But, if we can, we can bring some
    people in and have that discussion with you, sir.
        Senator Inouye. All right. I appreciate that, sir.
        Thank you very much, Mr. Chairman.

                           AMPUTEE MEDICAL TREATMENT

        Senator Stevens. On that subject, Mr. Secretary, I was
    talking to some of the surgeons out at Walter Reed, and they
    tell me that a lot of the people that they need to deal with,
    the problems that Senator Inouye is discussing, are in theater,
    but are really not used there, because people are injured with
    this type of situation, in arms and legs, are being brought
    home. Are you familiar with that?
        Mr. England. I'm not familiar with that subject at Walter
    Reed. No, sir, I'm not.
        Senator Stevens. I would ask that you look into it, because
    they tell me that they have not enough at Walter Reed, and
    there are people that are over there, that are reservists that
    have been called up, and they don't have the facilities to do
    the work. It's long-term work, and not emergency work, in
    theater. I would urge you to take a look at that. That, from
    one of the most senior and trusted surgeons in Walter Reed,
    tells me that they're hard-pressed. I'd like to see if you'd
    look into that, please.
        Senator Cochran.
        Mr. England. We will do so, Senator.
        [The information follows:]

        The Department of the Navy is not in a position to comment
    on the staffing of Army medical treatment facilities, or their
    concept of operating and staffing medical treatment facilities
    in direct support of operating forces.
        What Naval Medicine can comment on is its current
    deployment status as relates to orthopedic surgeons and its
    ongoing process of tracking medical services in the military
    treatment facilities. Currently, there are 4 orthopedic
    surgeons deployed with U.S. Marine Corps Surgical Companies in
    Iraq. On a monthly basis, or more frequently as required, the
    Naval medical treatment facilities provide a Medical Service
    Availability Report that details the services that they can
    offer to their beneficiaries. Should an event like this
    deployment interrupt a military treatment facility's ability to
    provide specific services, it is determined early so that the
    Bureau of Medicine and Surgery (BUMED) can apply mitigating
    strategies utilizing resources from across all of Naval
    Medicine to minimize the impact from the loss of services. In
    this case, no Naval medical treatment facilities have reported
    an inability to provide orthopedic services.
        The Department of the Navy would respectfully defer comment
    on the level of staffing at Walter Reed Army Medical Center to
    the Army Surgeon General.

                           MARITIME NORAD CAPABILITY

        Senator Cochran. Admiral Clark, you've indicated that
    you're convinced of the necessity to build a maritime aerospace
    defense command for North America. I understand that the
    littoral surveillance system, which is part of the distributed
    common-ground station, may already be able to accomplish many
    of these mission requirements. I also understand that Northern
    Command and the Pacific Command are looking at this capability
    for separate initiatives in the Gulf of Mexico and Pacific Rim.
    In your opinion, is there an opportunity to leverage existing
    capabilities of the littoral surveillance system to reduce
    research and development costs and to expedite delivery of a
    maritime NORAD capability?
        Admiral Clark. Well, I absolutely believe--while I'm not
    expert on the system, I absolutely believe that there's
    potential to help us have a system with much better information
    in it, that would be akin to what I have dubbed the Maritime
    North American Aerospace Defense Command (NORAD). And here's
    the way I look at it--and, by the way, I have discussed this
    extensively with the Commandant of the Coast Guard, who, I
    believe, fundamentally has this responsibility, but that we
    understand that we've got to be a great partner to the Coast
    Guard. And I believe that we are partnering better than we ever
    have before. We, just the other day, completed another
    headquarters-level cooperation talk so that we can better align
    our efforts.
        Having said that, and that the littoral surveillance system
    will improve the process, I do believe that ultimately--and I
    would say that the Commandant of the Coast Guard agrees with
    me--that what makes the NORAD system so effective is the
    transponder system that exists in aircraft, so that they are
    actively transmitting who they are and where they are. The
    reason I believe that this is the kind of capability that we're
    going to have to have, is that people that don't have anything
    to hide are going to be anxious to tell you that they don't
    have anything to hide, and here they come.
        I believe we have the technology today to advance our
    knowledge to better protect ourselves. Where I had an
    opportunity to talk about ways that we could better defend the
    United States of America, I made these recommendations. I'm
    happy to report to you that the Commandant of the Coast Guard
    is working through his channels in Homeland Security--and this
    is an international challenge, of course--that they are
    actively working toward how we would put together such a
    capability.

                         UNMANNED AERIAL VEHICLES (UAV)

        Senator Cochran. As we all know, unmanned aerial vehicles,
    such as Global Hawk, are proving to be very valuable to current
    operations. I'm informed that the Navy broad-area maritime
    surveillance UAV is not scheduled for operational capability,
    until fiscal year 2010, but the Air Force's Global Hawk program
    is on track for fiscal year 2006 for initial operating
    capability. It seems there is an opportunity to achieve the
    desired capability ahead of schedule with interoperability with
    the Air Force. Can you tell us what the likelihood is that the
    Navy may choose to delay a decision on the Navy broad-area
    maritime surveillance UAV and to accelerate the program by
    selecting a joint platform?
        Admiral Clark. Well, I cannot talk about the acquisition
    decision, because the acquisition authority rests with the
    Secretary and the Assistant Secretary, who make those
    decisions. But let me just say what I can talk about.
        I agree with the foundation of your question. Your question
    suggests, well, you know, ``Admiral Clark, why aren't you
    exploiting what the Air Force is doing?'' And that's where we
    are. We laid money in the budget this last year and this year,
    in execution--to get started in this direction, because we
    desperately need this kind of capability. And so we funded and
    let the contract recently to buy Global Hawks as initial
    demonstrators for us to then mature this capability in the
    maritime domain.
        I'm happy to report to you, Senator, that we'll get our
    first platform about 1 year from now. I believe it's scheduled
    for April 2005. And then we will get the second platform in
    late 2005. The acquisition executive will have to make a
    determination if we can build upon that or if we will be
    required to compete from that point, and I can't--I will not be
    the one that makes a decision on that.
        We have taken this direction because I want to be as joint
    as I can, I want to partner and capitalize on the research and
    development of the United States Air Force in this case every
    time I get an opportunity, instead of spending R&D of my own,
    of our own. And so I'm very excited about the rapid
    introduction of this capability. And, frankly, what we looked
    at is--we redefined that program in the 2005 submit to you,
    because we said--we had more money in the demonstration phase
    of it, and said, ``The Air Force has already done a lot of this
    demonstration, so why do we need to do that?'' And, in the
    process, we saved several million dollars. And so the future--
    the decision is that in the future, I'm very happy with where
    we are in buying these two demonstrator vehicles, which will
    deliver 1 year from now.
        Senator Cochran. Thank you.
        Mr. Secretary, do you have any comments, views on that
    subject?
        Mr. England. Only, Senator, that there are some competition
    issues as we go forward, in terms of, do we sole-source? Do we
    have competition? But what the CNO said is right, we are buying
    some Global Hawks. As we go forward, though, the discussion
    we're having now is, Is there going to be a competition for
    follow-on vehicles, and what will that be?

                                    SEABEES

        Senator Cochran. Mr. Secretary, I understand that Seabees
    have played a very important role during our combat operations
    in Iraq, and they continue to be an important resource. In
    fact, I think there were two individuals from the Navy
    construction regiment, based down in Gulfport, the Navy
    Construction Battalion Center, that were awarded Bronze Star
    Medals for their recent actions. Could you tell us something
    about the work that Seabees have performed and the important
    contributions that they've made in Iraq?
        Mr. England. Senator, thanks for the opportunity to
    recognize the Seabees, because I can tell you, we are
    tremendously proud of the men and women in the Seabees. They
    have served with distinction in Operation Enduring Freedom,
    supporting the Marine Corps, and also the Navy, ashore. They
    were deployed with the IMEF. There were approximately 5,000
    Seabees, and almost 2,000 from the reserve, that supported that
    effort. And today we have well over 500 Seabees, active duty,
    and about 500 Seabees, reserved, who are deploying with the
    marines on this deployment to Iraq. And they will be tasked
    with force protection, doing structures and facilities, and
    also for reconstruction of some of the civilian infrastructure
    in Iraq. So the Seabees have been very important, very
    instrumental. Like I say, we're tremendously proud of their
    effort.

                               UPARMORED HUMVEES

        Senator Cochran. There has already been a question about
    the problem with the improvised explosive devices. I understand
    that, in the case of the marines, there is an effort being made
    to upgrade the deployment of Humvees with armor that would
    provide additional protection. And I know there are other
    things that are being done in this area that can't be discussed
    in open session. But will the Marine Corps have adequate
    numbers of up-armored Humvees to help deal with this situation?
        General Hagee. Sir, we won't have the up-armored Humvees.
    As I mentioned, we're going to have about 3,000 vehicles in
    Iraq, a combination of Humvees, 5 tons, 7 tons, and other
    moving stock. Any of those vehicles that will go in harm's way
    on patrol will be hardened. They're not the M1114, which is the
    up-armored Humvee, but they will be hardened, either with kits
    or with steel that we have cut to fit the platforms.

                        LIGHTWEIGHT 155 HOWITZER PROGRAM

        Senator Cochran. There is a request in the budget for funds
    for 97 Lightweight 155 Howitzers. Could you provide us with
    your assessment of how this program is progressing?
        General Hagee. Sir, the Lightweight 155 is going very well.
    There was a minor problem here a month or so ago with the weld
    on the tail of the 155. That's been resolved. We are very
    confident that we'll be able to go to a full-rate production,
    and we'll have a positive decision in January 2005.
        Senator Cochran. Thank you very much, General.
        Thank you, Mr. Chairman.

                                  GLOBAL HAWK

        Senator Stevens. Secretary England, I noted the comments of
    the Senator from Mississippi about the Global Hawk. And,
    Admiral Clark, we have done some work with the Coast Guard in
    trying out the Predator for long-range activities along the
    maritime border off Alaska. And they've reported that that has
    been fairly successful. I do hope there's going to be some
    competition, because I see the Global Hawk as one platform; the
    Predator and some of these other smaller ones are different
    platforms, and they have different utilities as we go along.
    Are you exploring all of these possibilities for competition
    with the Global Hawk?
        Mr. England. Yes, we are. That was really the gist of my
    comment, that we're now talking specific platforms. We are
    specifically looking at the competitive environment and who
    should compete in this. But we will definitely compete if there
    are systems that meet the requirements, Senator.
        Senator Stevens. As a matter of fact, I was out at Stanford
    Research Institute recently, and one of them you could hold in
    your hand. Very interesting derivation of the concept of
    unmanned aircraft. But I do think the future is in utilizing a
    whole series of them, and I hope we stay current with the whole
    concept, and not just one.
        Mr. England. No, actually, we agree. I mean, this is not
    only in the air, but this is on the surface of the Earth, it's
    on the surface of the water, it's undersea. We're working a
    wide variety of unmanned, across a full spectrum of utility in
    combat. And, Senator, I agree with you, I think there's far
    more utility in the future than we expect.
        Senator Stevens. Not that I have anything against Global
    Hawks. They're a very sound platform. But it's high-altitude,
    long-range, and long-endurance. I think it's a very vital
    portion of our system, but there are other challenging areas
    where it just cannot fit in. And so I hope we pursue them all.
        Yes, Admiral?
        Admiral Clark. If I can add, Mr. Chairman, I think this is
    really something for us to collectively consider. The
    technology is moving so fast. We are going to send the marines
    over, and, at the Naval Research Laboratory (NRL), we have
    developed a hand-launched UAV that they're taking with them.
    It's called Silver Fox. The marine will launch it like this. It
    will link directly to him. The marine will be carrying a
    computer. He won't be bothering with the satellites and all
    this stuff. We've got to have mechanisms to be able to tap into
    this technology and turn it in a hurry. And by the time we
    finish our demonstrations, it's impossible to say today how
    much the technology is going to have moved in this area. And so
    we need the acquisition system to be agile enough for us to be
    able to exploit.
        This is our asymmetric advantage, Mr. Chairman. We'd like
    to think of this enemy that we're fighting, that they're the
    ones with the asymmetric advantage; ours is that we can turn
    technology faster than anybody in the world. And the marines
    are going with this brand-new system.
        General Hagee. If I could pile on for a minute, Mr.
    Chairman. I could not agree more with both the Secretary and
    Admiral Clark. We're also bringing a UAV called Dragon Eye,
    which is a hand-launched UAV, that can give the company
    commander visibility over the next hill. And, of course, we
    have Pioneer.
        To me, what is critical is the ability to link all of these
    platforms--whether they're tactical, whether they're
    operational, or whether they're strategic--that we have the
    communication architecture down there to where that company
    commander, battalion commander, or ship driver, can get that
    information, and it's not stove-piped down to one ground
    station. I think that's where our concentration needs to be.
        Senator Stevens. And it's going to be linked up to the
    cockpit of the manned aircraft, too. So I think this is the
    future, and I hope you are doing what we're doing, and that is,
    visiting some of those people in graduate school who are
    thinking out of the box and trying to really push the
    envelope----
        Mr. England. Actually----
        Senator Stevens [continuing]. On the whole subject.
        Mr. England. I'm sorry, Senator. But, you know, a lot of
    this is operational. I mean, even in the war that we're
    conducting, in Operation Enduring Freedom (OEF) and, before,
    Operation Iraqi Freedom (OIF), we actually had unmanned tied in
    with manned aircraft. And it's interesting, when you listen to
    the conversation, you don't know if the pilot's on the ground
    or in the airplane. So it's quite interesting how this all ties
    together. We have made, I think, giant strides in this area.
        Senator Stevens. Well, the three of you make us proud.
        Do you have any further questions, Senator?

                         ADDITIONAL COMMITTEE QUESTIONS

        Without any question, we've seen a lot of teams at that
    witness table, in my time on this subcommittee; I think you're
    the finest we've seen, and we appreciate what you're doing.
    You've got a grand group of young men and women serving our
    country under your command. So we couldn't be more pleased with
    the way you're conducting your activities. And I do hope that
    we can find ways to work together and make sure that we deliver
    the funds to you in the areas that they're needed.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                 Questions Submitted to Hon. Gordon R. England
                Questions Submitted by Senator Pete V. Domenici

                           WATER PURIFICATION PROGRAM

        Question. Mr. Secretary, as you know the Office of Naval Research
    (ONR) has begun a water purification research program in southern New
    Mexico.
        The goal of this program is to study techniques in reverse osmosis
    that will lead to the production of a transportable water purification
    unit.
        In turn, these units would be used by Marines engaged in
    humanitarian and disaster relief efforts. They would also help meet the
    water demands of our expeditionary war-fighters.
        What is the schedule to produce the first water purification system
    with the upgraded technology being developed by the Navy?
        Answer. The Office of Naval Research (ONR) is the program
    coordinator for the Expeditionary Unit Water Purification (EUWP)
    program. The EUWP program is in the near term building state of the art
    demonstrators, and for the long term is investing in significant
    science and technology enhancements.
        In the near term, the EUWP program is designing a 100,000 Gallon
    Per Day (GPD) system. This system is transportable by C-130 aircraft
    and encompasses state of the art commercially available technology. It
    will ultimately be fielded to the Tularosa Basin National Desalination
    Research Facility (TBNDRF), Alamogordo, New Mexico, and is on schedule
    with delivery planned for January 2005.

                         NAVY HIGH ENERGY LASER TESTING

        Question. What is the status of the Navy high energy laser testing
    against anti-ship missiles at White Sands?
        Answer. The Navy is in the process of upgrading the Sea-Lite Beam
    Director (SLBD) acquisition and tracking systems from its circa 1970s
    technology to more state of the art technologies. The name of this
    program is High Energy Laser Precision Acquisition and Track (HEL-PAT).
    At present, two new cameras, mid wave infrared, and long wave infrared,
    have been purchased and are on site. A new Automatic Aimpoint Selection
    and Maintenance (AUASM) telescope and Hot Spot Tracking (HST) optics
    are being manufactured. A new Tracking Processor Unit (TPU) has been
    procured and the associated tracking software is being developed. The
    new TPU will allow object oriented tracking as opposed to edge tracking
    currently employed.
        Starting in April 2004, the TPU and one of the new cameras are
    being installed and integrated with the SLBD using a surrogate AUASM
    telescope. This will ensure that the TPU can properly control the SLBD
    for tracking. First tests will be on a stationary target board. Later
    tests will track military aircraft. The goals of the SLBD upgrades are
    to allow the tracking and engagement of low contrast targets against a
    clutter background and to maintain the high energy laser beam on
    target. In addition, tracking through the full aperture will be
    utilized. Low power laser engagements will begin in June 2004 and high
    power engagements in November 2004.
        Question. Is the Navy interested in developing laser weapons for
    the all-electric ship?
        Answer. The Navy is interested in high-energy lasers as a future
    concept, but does not consider the technology to be mature enough for
    inclusion in an acquisition program. Adequate power generation is a
    limiting factor in the development of these weapons. We continue to
    invest in Science and Technology programs to attain methods for
    generating the required power levels. One example is the ongoing
    program in free electron laser development sponsored by the Office of
    Naval Research. Additionally, we continue to coordinate with other
    Services and Agencies on related high energy laser development
    projects.

                              JOINT STRIKE FIGHTER

        Question. The success of the Joint Strike Fighter (JSF) program is
    vital to the future of tactical aviation of all the services,
    especially the fighter bases in New Mexico.
        What is the status of the JSF program, especially the problem of
    being over-weight? Do you expect any significant impact on the
    schedule?
        Answer. The Joint Strike Fighter (JSF) program has completed two
    years of an 11-year development program. To date, the development of
    all three variants has gone very well in propulsion, subsystems,
    avionics, and autonomic logistics areas. The Air System Preliminary
    Design Review was completed in June 2003, and the F-135 First Engine to
    Test was successfully completed in October 2003.
        The Department does have concerns regarding the aircraft's airframe
    design. At this time, the airframe design is heavier than the
    established goal. Reducing the weight of the airframe is an important
    step in meeting performance requirements. We believe current weight
    issues are solvable within normal parameters of design fluctuation, and
    we are re-planning JSF System Development and Demonstration (SDD) to
    make sure we succeed. Specifically, our SDD plan recognizes that Short
    Takeoff and Vertical Landing (STOVL) performance is absolutely vital
    and is focusing upfront efforts to ensure STOVL viability for our war
    fighters. In addition, we are aggressively pursuing trade studies to
    improve performance by reducing weight, as well as aggressively
    pursuing propulsion enhancements to improve performance. Additionally,
    the Department has formed an independent review team to look at the
    entire program, including a near-term engineering view, assessing the
    present design, with specific emphasis on weight, aircraft structural
    design, and other technical risk areas.
        Additional design work required to address technical issues,
    primarily weight projections, will result in an SDD schedule delay and
    a one-year slip to starting Low Rate Initial Production to fiscal year
    2007 vice fiscal year 2006. In addition, Initial Operational Capability
    (IOC) dates will be extended as a result of adjusting the program with
    the STOVL variant's IOC moved from fiscal year 2010 to fiscal year
    2012, the Conventional Takeoff and Landing (CTOL) variant moved from
    fiscal year 2011 to fiscal year 2013, and the Carrier Variant (CV)
    moved from fiscal year 2012 to fiscal year 2013.
                                     ______

                 Question Submitted to General Michael W. Hagee
                   Question Submitted by Senator Thad Cochran

                                  M4 CARBINES

        Question. General Hagee, I noted with some concern an unfunded
    requirement of $4.9 million for the procurement of 5,400 M-4 Carbines
    to be used by forward deployed Marines. Also, I recently became aware
    of a new technology for coating weapons that could enable weapons such
    as the M4 Carbine to operate without lubrication. I understand that
    this technology could greatly improve the reliability of the weapons
    concerned while decreasing the workload of the Marine.
        Could you update the Committee on your small arms shortfall, and
    are you aware of this technology? If so, are you investigating the
    feasibility of its application to Marine Corps weapons?
        Answer. As the result of lessons learned in recent operations,
    certain Marines are inappropriately armed with the M9 pistol or the
    M16A4 rifle. The M4 carbine is a shorter, lighter version of the
    standard M16A2 service rifle and is deemed a better weapon for specific
    applications due to its smaller profile. Therefore, the Marine Corps
    recently established a 10,119 Table of Equipment (T/E) requirement for
    the M4 carbine variant of the Modular Weapon System (MWS). The M4
    carbine replaces some of the current M16A2 rifles and M9 pistols. This
    increase of 4,420 weapons raises the MWS requirement to 69,883 weapons.
    This is comprised of 59,764 M16A4 rifles and 10,119 M4 carbines. The
    $4.9 million will procure 5,400 M4 carbine variants.
        The Marine Corps Infantry Weapons and Weapons Maintenance program
    is actively investigating coating technology for small arms. A
    Universal Chemical Technologies, Inc. product will increase wear and
    corrosion resistance and reduce friction. The Marine Corps will
    continue to investigate coating technology sources to reduce weapons
    lifecycle costs.

                              SUBCOMMITTEE RECESS

        Senator Stevens. Our next Defense Subcommittee meeting is
    scheduled for Wednesday, March 24, at 10 a.m.
        Thank you very much.
        [Whereupon, at 11:42 a.m., Wednesday, March 10, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    March 24.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                           WEDNESDAY, MARCH 24, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:15 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Inouye, Leahy, Dorgan,
    and Durbin.

                             DEPARTMENT OF DEFENSE

                          Department of the Air Force

    STATEMENTS OF:
            HON. JAMES G. ROCHE, SECRETARY
            GENERAL JOHN P. JUMPER, CHIEF OF STAFF

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. I apologize, Mr. Secretary and General. I
    was Chair of the Senate, and my relief did not show up. But
    we're happy to have you here this morning. It's an important
    time for all of us, very important hearing concerning the
    future of the Air Force.
        As you know, some of us just returned from a trip to Iraq
    and Afghanistan, and I know you're confronted with the
    difficult task of modernizing the Air Force. We're pleased to
    have your leadership.
        I'll put my statement completely in the record because I am
    late.
        [The statement follows:]

                   Prepared Statement of Senator Ted Stevens

        Secretary Roche, General Jumper, it is good to welcome you
    back before the subcommittee at this time of importance for the
    nation and the Air Force. As we meet here today, the Air Force
    continues to support the nation's forces committed to
    operations in Iraq and Afghanistan. At the same time you are
    both confronted with the difficult task of modernizing the Air
    Force. The country is fortunate to be able to call upon your
    leadership.
        The committee has begun its review of the fiscal year 2005
    Defense budget. Clear from the President's request is the Air
    Force effort to modernize fighters by investing in the F/A-22
    and the Joint Strike Fighter, and to commit the Department to
    the next generation of space capability.
        We look forward to hearing today of your priorities in the
    budget request.
        We will make your full statements a part of the committee's
    record.
        Before you proceed, I would like to ask my colleague from
    Hawaii if he has any opening remarks.

        Senator Stevens. All of your statements are completely in
    the record, by the way.
        Senator Inouye, our co-chairman, do you have a statement?

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Yes, I did want to put the rest of my
    statement in the record. Mr. Chairman, I wish to begin by
    congratulating the Secretary and the General for the
    performance of the men and women in the Air Force in Iraq,
    Afghanistan, and other places around the world. And I'd like to
    thank all of you and your command, because we are in your debt.
    Thank you very much for your service.
        And may I ask that the rest of the statement be made part
    of the record?
        Senator Stevens. Yes, sir.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Secretary Roche, General Jumper thank you for being here
    today to testify before this subcommittee on your fiscal year
    2005 budget request.
        Gentlemen, I want to begin by congratulating you on the
    performance of the men and women in the Air Force in Iraq,
    Afghanistan and around the world.
        The last few years have been very demanding on our military
    with frequent family separations from overseas deployments,
    periods of intense combat which heighten concern for our loved
    ones, and the stress that comes from knowing that we are living
    in a very dangerous era.
        Particularly at times like these, it is critical that we
    demonstrate our support and express our thanks to these fine
    officers and airmen, and their families.
        I look forward to hearing from you today about how the
    fiscal year 2005 budget request will accomplish this task.
        Mr. Chairman, I want to note also that there are several
    important issues in this budget request. The Air Force is
    recommending changes in its aviation force structure, with the
    retirement of ten F-117s. Furthermore, many other adjustments
    are being contemplated.
        For instance, I am told you are considering buying
    additional F-15 and F-16 fighters, retiring C-5as, and
    restoring B-1 bombers back to the fleet.
        Some of these might prove controversial, and I encourage
    you to include us in the decision making process as you
    proceed.
        Gentlemen, the proposed budget includes an increase of over
    $4 billion in your investment accounts, while the other
    services did not fare as well. I understand that some of your
    increase is due to classified activities, but I would like you
    to address the unclassified increases for space and other
    programs today and why they are priorities at this juncture.
        I look forward to hearing your remarks today on these and
    other topics as we review the state of the Air Force.
        Finally, Mr. Secretary, General Jumper I want to thank each
    of you for your service to the Air Force and the country. We
    are in your debt.

        Senator Stevens. Senator Dorgan, do you have a statement?
        Senator Dorgan. Mr. Chairman, I do intend to ask some
    questions today about a number of things, but let me, again,
    echo your comments and the comments of Senator Inouye. I
    appreciate the work that the Secretary does, and General
    Jumper's, and the men and women of the Air Force.
        Senator Stevens. Thank you, sir.
        I have a statement from Senator Burns for the record.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        Thank you, Mr. Chairman. I would like to thank Secretary
    Roche and General Jumper for coming to brief this Committee on
    the Air Force budget, and I thank you for your service to our
    great Nation. Your airmen are critical to winning this global
    war on terror. I intend to honor our men and women serving and
    those who have made the ultimate sacrifice for our country by
    ensuring that our forces have the resources they need. With
    16,000 airmen deployed to 25 locations in southwest Asia,
    including 12 new bases, our Air Force is fully committed to
    support the Global War on Terror.
        Members of the 120th Fighter wing of the Montana Air
    National Guard were one of many Air Guard units mobilized and
    deployed to Saudi Arabia last year in support of the war. As
    part of the Air and Space Expeditionary Forces (AEF), they have
    performed superbly. I urge you to ensure the Air National Guard
    units called to active duty have the most current equipment
    available. We must depart from the cold war premise that equips
    the Air Guard with older generation equipment transitioned from
    Active Duty Air Force units. Today, our Air Force Guard and
    Reserve components fight beside their active counterparts. I
    urge you to ensure that all units deployed overseas are
    equipped with the best technology our country can provide.
        We have witnessed the successful employment of unmanned
    aircraft within our forces. We have seen an increase in the
    number of Unmanned Air Vehicles in use by our forces at all
    echelons. Feedback I have seen from the soldiers on the ground
    is that they wish they had more of these systems, not less. I
    urge the Air Force to consider expanding the force structure of
    unmanned aircraft into the Air National Guard. The Air Force
    would benefit from retention of a strategic reserve of this
    capability as operational tempo subsides in the coming years,
    and the Air National Guard would benefit from force structure
    that could support homeland security or disaster relief
    missions. I will be interested to hear whether or not you have
    plans for achieving this balance between the active Air Force
    and Air National Guard.
        I am encouraged by Air Force investments in advanced
    technology that enables us to maintain superiority in sensor
    coverage and the ability to provide rapid, precise application
    of force. This investment is critical to our continued success
    in operations under our new operational model, which relies on
    precision engagement weapons and rapid identification of
    targets to augment traditional firepower and maneuver
    formations. I would hope that the Air Force continues its
    investment in the development of cutting edge, creative
    applications for the warfighter of today and the future.
        The key to future combat is knowledge provided by rapid
    processing of data from pervasive sensors, empowered with quick
    response precision engagement capability. Air Force programs
    like satellite communications and space based radar support the
    growth in bandwidth required of our combat network resulting
    from integration of high resolution multi-spectral sensors,
    precision weapons, and maneuver formations.
        I read daily of our forces in the field using American
    ingenuity to develop unconventional solutions to solve the many
    unconventional problems they face. I appreciate your efforts as
    the leaders of the Air Force to seek innovation in technology,
    acquisition processes, and doctrine to meet the challenges of
    the evolving battlefield.
        Again, I thank you for being here today and look forward to
    the discussion this morning. Thank you.

        Senator Stevens. Senator Cochran.
        Senator Cochran. Mr. Chairman, I join you in welcoming the
    distinguished Secretary and Chief of Staff of the Air Force,
    and commend them on the outstanding leadership they're
    providing to the Air Force at this very important time.
        Thank you.
        Senator Stevens. Maybe I should be late every morning, Mr.
    Secretary.
        We'd get to you quicker this way.
        I thank the Senators for their courtesy, and we'd be
    pleased to hear your statement.
        Dr. Roche. Thank you, Mr. Chairman. We very much appreciate
    the comments you made about our wonderful airmen. They really
    are spectacular young men and women, and we're terribly proud
    of them.
        So, Mr. Chairman, Senator Inouye, and members of the
    committee, it is our great pleasure to appear before this
    distinguished committee and to represent the 700,000 Active,
    Guard, Reserve, and civilian airmen who are engaged in
    defending our Nation. General John Jumper and I are extremely
    proud of their achievements and service this past year and the
    years before that. They have contributed significantly to our
    Nation's global fight against terrorism, to our military
    successes in Iraq and Afghanistan, and to our homeland defense
    mission. They are devoted servants to our Nation, and have our
    utmost respect and confidence.
        And, sir, I would also want to point out how honored I am
    to serve alongside such an outstanding leader as General John
    Jumper, a wonderful officer, a superb gentleman, a renaissance
    man, and a good friend.
        Our highest priority continues to be warfighting through
    delivering capabilities that enable us to remain decisive in
    combat. Through the efforts of this committee, your colleagues
    in the Congress, and the dedicated professionals of the
    Department, we are proud to report we are meeting these
    objectives.
        As highlighted in our written testimony, we continue
    adapting the Air Force to realize the President's and Secretary
    Rumsfeld's view of transformation. Our strategy is to exploit
    the sources of strength that give us the military advantages we
    enjoy today. Our goal is to build a portfolio of advantages,
    one that uses operational concepts to guide investments that's
    relevant to the joint character of warfare and is useful in the
    increasingly asymmetric conduct of warfare. With the support of
    this committee, we have delivered combat effects never before
    imaginable on the battlefield, and we'll sustain this dominance
    in the future. The portfolio of capabilities, which I will be
    speaking of, will continue to provide joint force air and space
    dominance, enable battlefield operations, and produce decisive
    joint-combat effects.

                                     F/A-22

        Let me start with the F/A-22, Mr. Chairman. Today, the F/A-
    22 is not just a program on a piece of paper, but a real
    aircraft, a revolutionary aircraft that is moving to the field
    now. Ten jets assigned to Edwards Air Force Base, California,
    are completing developmental tests, and they're well into
    operational tests. At Nellis Air Force Base, Nevada, five
    Raptors are developing operational tactics and techniques. And
    at Tyndall Air Force Base, Florida, four jets, and counting,
    are training pilots.
        I recently visited our airmen at Tyndall--I've been to all
    of the facilities, but most recently at Tyndall Air Force
    Base--and heard firsthand the glowing reports of this
    transformational weapons system, from the airmen who maintain
    it and operate it. In fact, as I departed, two Raptors were
    taxiing back from another successful mission. Later, I was told
    that both aircraft landed Code 1, which means they'd be ready
    to go for its next mission after routine servicing.
        With these aircraft in the inventory, we are now focusing
    on operational testing, expanding the flight envelope,
    integrating more weapons, and improving our maintenance
    processes. One year ago, we had completed 16 missile shots.
    Today, after 5,000 flight test hours, we've had 47 successful
    missile shots, and major elements, flight envelope and weapons
    envelope, are cleared for Initial Operational Test and
    Evaluation (IOT&E) start. In fact, as General Jumper will tell
    you, pilots flying the aircraft today believe that if war were
    to break out, they would like to take the aircraft to war
    today.
        Additionally, through your commitment, stable production of
    the F/A-22 program is producing cost savings. Earlier this
    year, we exercised an option to add one F/A-22 aircraft to our
    LOT-3 contract, increasing our buy to 21 planes for the price
    of 20. While such dramatic savings won't be available every
    year, this is happening because of gains in supplier
    confidence, which led to reduced costs. With 65 percent of
    aircraft costs associated with over 1,400 suppliers in 46
    States, a firm commitment to program stability is absolutely
    essential to create conditions where suppliers view efficiency
    gains as a path to increased orders. Again, your commitment to
    F/A-22 program stability is what has allowed this to happen,
    and we thank you.
        At the same time as we strive for program stability, we are
    transforming the F/A-22's capabilities. Through deliberate
    spiral development, we are integrating new avionics and weapons
    to make it a premier air-to-ground strike system, as well. In
    addition to obtaining and sustaining air dominance, the F/A-22
    will counter existing and emerging threats, such as advanced
    surface-to-air missile systems of the SA-20 and the SA-400
    family, time-sensitive targets, moving targets, and cruise
    missiles, protecting our Navy colleagues, our deployed soldiers
    and airmen, or, God forbid, even our homeland, to a greater
    fidelity than anything we have in our legacy systems.
        And we just completed Defense Acquisition Board the day
    before yesterday, and it was characterized by all members as
    very encouraging. Members were satisfied. We expect to enter
    into an initial operational test and evaluation near the end of
    April, but it'll be event-driven. As of now, we see no
    impediments to enter.
        Also as part of a test, we were required to do a test
    against the F-15, because there had been requirement that the
    F/A-22 demonstrate that it was at least twice as good as the F-
    15 in air-to-air combat. The head of the Air Force test
    organization tells General Jumper and me that, in fact, the F/
    A-22 proved to be roughly five times as good as the F-15.
        We have also just completed LOT-4 negotiations for 22
    aircraft. That means that we are at a position where the
    recurring cost--not including research and development, but the
    recurring cost of each airplane is under $110 million a copy.
    We are on the price curve, as we had wished to be. And, again,
    we thank you for the stability that's allowed us to do that.
        Our F/A-22 budget request continues much needed program
    stability and supports its transition from development to
    operational tests with Initial Operational Capability (IOC) at
    the end of calendar year 2005. The $4.8 billion request
    includes funding for production of 24 aircraft, and continues
    our smooth ramp-up to 32 jets per year. As you recall from last
    year, Mr. Chairman, we have decided not to try and go beyond 32
    because it would require additional facilities and other
    things. We much prefer to have something that's stable, because
    when you have a stable production line, you can work very hard
    at finding efficiencies in order to get costs down and get
    reliability up.
        We look forward to the delivery of the first F/A-22 to
    Langley Air Force Base, Virginia, this November as part of the
    first operational squadron. IOC is clearly within sight, and
    the Air Force is postured to deliver this transformational
    capability, as anticipated, to the Joint Warfighter.

                           JOINT STRIKE FIGHTER--F-35

        With respect to the Joint Strike Fighter, a complementary
    capability to the F/A-22 should be provided by the F-35 Joint
    Strike Fighter. This aircraft is expected to provide a
    sustainable, focused close air-support platform for the Joint
    Force commander. The benefits potentially to be gained from the
    F-35 commonality across services and major allies will have no
    comparison to any system in the fleet today.
        With the F-35 only in its second year now of an 11-year
    development program, we can effectively apply the production
    quality and Operational Test and Evaluation (OT&E) lessons that
    we learned on the F/A-22. In fact, every time there's a Defense
    Acquisition Board meeting on the F/A-22, we require the F-35
    team to be there to learn any lessons so that they don't repeat
    any mistakes we might have made.
        Together, these aircraft will be integral to our support of
    ground forces in various environments flying different
    profiles. They are not the same aircraft; they are very
    different aircraft. They are not substitutes; they are
    complements.
        We, in the Air Force, are in the process of improving our
    commitment to close air-support capability by planning to
    acquire Short Takeoff and Vertical Landing (STOVL) and STOVL
    variants of the F-35 to better support land forces, be they
    Marine, Army, Coalition, or special operators.
        In moving our Air Force into the STOVL world, with an
    emphasis on the short takeoff for air support, we will look to
    gain training efficiencies by working jointly with the Marine
    Corps on facility use and course development. Additionally, we
    are pressing for the early development of STOVL capability in
    the program cycle to reduce risk.
        Right now, there's a weight problem in the F-35 program,
    and it most greatly affects the STOVL variant. We are working
    with the Navy and with the people in Acquisition and the
    Program Office to change the program so that risk reduction on
    the STOVL becomes one of the paramount things to do in the
    short-term, because if we cannot build a STOVL aircraft, then
    we really don't--we should not proceed with the F-35 program.
        A STOVL is key for a number of reasons--commonality with
    the Conventional Take Off and Landing (CTOL), the fact that the
    Marine Corps are very dependent on it, the fact that we will
    become dependent on it. If we were merely to be designing a
    plane to replace the F-16, we would probably have taken a
    different route.
        We believe this is doable, and we believe it is what you
    would want us to do, which was to find the toughest part of the
    program and to demonstrate to you that, in fact, the program is
    a viable program. Since the Air Force will be taking over this
    program sometime in June, end of May or June, we are committed
    to being as transparent as possible to you about the program--
    when there's a problem, tell you about the problems; when
    there's something good, tell you about something good. Right
    now we think what we owe you most is to prove that, in fact,
    the short takeoff and landing aircraft can be developed from
    this design, and can do it with the amount of weight that's
    reasonable.

                                    BOMBERS

        With respect to our bombers, Mr. Chairman, during Operation
    Iraqi Freedom and Operation Enduring Freedom we continue to
    demonstrate our ability to link air and ground forces with our
    airmen combat controllers, turning the battlefield air
    operations from a concept into a reality, and giving Joint
    Forces the tools they need to bring devastating fires to bear.
    These young airmen, who operate on the ground, sometimes to the
    back of forces in remote locations, have proven their worth to
    our country, and they and their colleagues, as part of our
    battlefield airmen field, will only be developing over time.
    And we are working with the United States Army--in particular,
    General Jumper and General Schoomaker--to assure that, as the
    Army reorganizes and has smaller maneuver combat units, that we
    will have the airmen for each of those units to be able to
    bring air power to bear to support those ground forces.

                                      B-52

        A decade ago, we were concerned with the relevance of the
    B-52. And, as John has pointed out, General LeMay never would
    have predicted we'd employ B-52s from 39,000 feet in a close
    air-support mission with such precision, but he would be proud.
        And last year, during Operation Iraqi Freedom, reserve B-52
    units from Louisiana figured out how to incorporate the
    Litening II sensor pod on a ``BUFF'', and conducted the first
    combat laser-guided employment. We were able to drop Laser-
    Guided Bombs (LGBs) from a B-52. The first time the crew saw
    the targets, they were actually attacking, and it became--these
    planes became the two weapons of choice for the Combined Forces
    Air Component Commander (CFACC) in the area, because they could
    do so much more with them. We are now expanding that to cover
    about 14 of the B-52s.
        At one point, there were those who were writing off the B-
    1, but we adapted the fleet. Today, we are using it in ways
    never conceived. We removed the stores bay fuel tank to give it
    increased carriage capability, and we developed tactics that
    make it useful for new missions. With increased range and
    duration over a target area measured in hours because of the
    changed way we employ this aircraft, and the capability of
    stacking aircraft in benign areas for execution of time-
    sensitive or emerging targets, the B-1 and our whole bomber
    force--have become theater weapons of choice, and we're
    especially proud of the men and women who have made the B-1 so
    effective.
        Our bomber fleet of B-1s, B-2s, and B-52s are combat-
    proven. Thanks to this committee, increased spare-parts funding
    and your commitment to platform modernization and fleet
    consolidation have resulted in record mission-capable rates and
    a fleet that is more lethal and survivable. We truly have
    achieved something together, sir.

                                      B-1

        Our B-1s achieved their highest mission-capability rate in
    history thanks to a smaller fleet, improved availability of
    spares, and the concentration on two bases with the best
    maintainers split between those two bases, instead of five.
    We've done well.

                                      B-2

        The B-2 fleet story is similar. We currently have 21 B-2
    aircraft achieving their best mission-capable rate since its
    IOC in 1997. With congressional support, shelters are now
    available to support global B-2 expeditionary operations.
        Today, we are investing in future technologies for enabling
    long-range strike for 2025 and beyond. Over the next year or
    so, we will determine what form that long-range strike
    capability will take. Our long-range strike strategy and
    investment plan will sustain our legacy force and provide a
    future stealthy, possibly regional bomber to deliver combatant
    commanders combat effects. When we say ``regional bomber'', we
    mean a bomber that is big enough to carry a number of weapons,
    and stealthy, able to fight or to evade a fight and, thereby,
    be able to be daytime stealth, because right now all our
    stealthy systems can only be operated at night. The exact range
    is to be determined, but could be something like three-quarters
    that of a B-2 or, for certain design, might even exceed that of
    a B-2.

                                      C-17

        C-17 next, sir. Another warfighting success story rests
    with a key enabler of our strategic mobility, the C-17, and
    this committee has been heavily involved in it from the very,
    very beginning. Therefore, we're proud to say that we have a
    fleet that now includes 116 aircraft, of which 79 are available
    for immediate global mobility with a mission-capable rate of
    86.7. This is the highest mission-capable rate in our manned-
    aircraft fleet.
        Combat employment of the C-17 has been even more
    impressive, and would not have been possible without the
    support of you and your colleagues, Mr. Chairman. For instance,
    while we were constrained from access by land, 15 Air Force C-
    17s airdropped over 950 paratroopers from the 173rd Airborne
    Brigade, and 23 airmen, into Northern Iraq. This successful
    mission opened Bashur airfield and assured the United States
    (U.S.) ground forces could be resupplied in the northern part
    of Iraq. As of today, the C-17 has flown the bulk of U.S.
    airlift missions supporting Operation Iraqi Freedom and
    Operation Enduring Freedom flying over 40 percent of all
    aircraft sorties, delivering 260,000 tons of cargo. The
    additional 60 C-17s approved in the multi-year buy is a
    continued step in the right direction to support this nation's
    airlift requirements. With your committee's support, the C-17
    program and the multi-year funding profile provides the
    stability and maximizes production, while enabling suppliers to
    gain efficiencies, providing cost savings. We still believe
    that the 60 multi-year, as you've allowed us to do it, sir,
    enables us to save at least $1 billion over the course of the
    program. That's equal to four more planes. We are getting 60
    planes for roughly the price of 56.

                                    TANKERS

        Tankers, Mr. Chairman. As you know, our tanker
    recapitalization initiative is on hold. The initiative is
    complicated enough, as you know, so I am in complete agreement
    with Secretary Rumsfeld's desire to review the program and
    ensure that it is not tainted in any way.
        Meanwhile, we are programming money, starting at fiscal
    year 2006, to conduct a KCX tanker replacement program, and
    that has been our plan all along. As a critical joint enabler
    of U.S. power projection, our global aerial refueling fleet
    serves Air Force, Navy, Marine Corps, and Coalition aircraft.
    Recapitalization of the KC-135 fleet, over 540 aerial refueling
    aircraft, will clearly take years to complete, and their
    average age, as you are well aware, is roughly 43 years. The
    Air Force is committed to an acquisition approach for this
    program that brings the best capability to the Joint Warfighter
    at the lowest possible cost and in the most efficient manner.

                            UNMANNED AERIAL VEHICLES

        If I may now, I'll just touch on Unmanned Aerial Vehicles
    (UAVs). We, again, would like to thank this committee for its
    contribution to our UAV force and remotely piloted aircraft. I
    know, personally, a number of you were interested in this
    subject long before the services were, and now I think you can
    point with pride to your early positions.
        Since beginning operations with these transformational
    systems, you have enabled us to make this a valuable asset in
    the conduct of modern-day warfare and the prosecution of time-
    sensitive targets. In just 2 years, these aircraft have evolved
    from intelligence platforms used to see over the next hill,
    into systems that can now provide Joint and Coalition Forces
    with intelligence, surveillance, reconnaissance, target
    acquisition, and, in the case of the armed Predator, direct
    attack.

                            OPERATION IRAQI FREEDOM

        During Operation Iraqi Freedom, we further refined Predator
    capabilities, as well as Global Hawk capabilities, sending
    realtime Predator feeds to other airborne platforms and to
    ground forces. Now, in fact, we have 20-some of these units we
    call Rover 2's, which are the--to downlink instruments from the
    Predator to the ground forces, that they're going to use in
    Iraq.
        Being able to run five simultaneous combat orbits through
    advanced technology and tactics development was also
    demonstrated. Innovations in our laser Hellfire operation saved
    lives and refined the standards for time-sensitive targeting.
    Last year, we used Predators, as well as our Global Hawk UAV,
    to assist in the effort to preclude Scud launches from the
    western desert of Iraq. Integrated with special operations and
    other air assets, these unmanned aircraft allowed small teams
    to own and control 6 million acres of territory that had been
    the launching points for dozens of Scud missiles during the
    1991 gulf war. With small teams, with that kind of air
    surveillance, backed up by attack aircraft, we suppressed the
    western part of Iraq.
        Mr. Chairman, I know you know that we, in fact, were able
    to practice with the same people, the leaders of this, in the
    western part of the United States night after night after
    night, quite secretly. Our range is the size of Connecticut.
    Two Connecticuts make the size of western Iraq. We moved that
    identical team right over, and these were our Army folk, some
    Navy, Air Force, some Coalition allies, special operators, who
    had trained night after night together, and then we moved them.
        Working with other intelligence/surveillance/reconnaissance
    assets, the Predator also provided target acquisition and
    conducted direct attacks on targets where the chances of
    collateral damage were high. We loved the story of a pilot
    named Yvanna, and she took her Predator to remove Baghdad Bob
    off the airwaves. She had to destroy his satellite dish,
    antennae, and generator, and it was set up only a few yards
    away from international media antennaes, and very close to a
    mosque. She operated the Predator slowly, as she said. As you
    know, Mr. Chairman, this thing only can go 70 knots, at best.
    But she came in slowly, to be very quiet. She coordinated with
    the Combat Air Operations Center (CAOC) in the Kingdom of Saudi
    Arabia. She was flying the vehicle from the United States. She
    flew over downtown Baghdad. She found the target, made sure
    that the laser beamed exactly the right spot, and blew it away,
    and the other media never even noticed. It was a beautiful job,
    and there was no collateral damage.

                                  GLOBAL HAWK

        Another example that we're very proud of is the work of the
    Global Hawk with our Joint Surveillance Targeting Attack Radar
    System (JOINTSTARS) working against the Medina Division in the
    midst of a sandstorm. As my colleague often points out, when
    people talked about a lull in the war, I don't think they ever
    asked the commander of the Medina Division, because he was
    certainly not experiencing a lull, and he found that if he
    moved, he could be identified, and his units were killed.

                                    PREDATOR

        Examples like these reinforce our current plan for a force
    of 68 Predator A's. We expect many of our ongoing initiatives
    in this platform to pay big dividends. Developing multi-
    spectral sensors, improving our weapons integration and
    communication links remain top priorities for our Predator
    force.
        For Predator B production, General Jumper and I have
    directed a more deliberate acquisition program to ensure we
    deliver an effective and sustainable hunter/killer capability
    to the warfighter. And John just visited the Predator B
    yesterday, and he may want to comment on it.
        We have also reviewed the fielding strategy to get us up to
    60 aircraft, the requisite sensors, and ground stations. This
    will allow for early deliveries of interim combat capability,
    support near-term requirements, while ensuring a disciplined
    development program.
        There's a lot we could go on about the Global Hawk, sir. We
    are going to be ordering 34 of these over the Future Years
    Defense Plan (FYDP). These were used differently than ever
    intended during the Iraqi War. Our young teams taught us how
    these things should be used in ways we never envisioned, and we
    are just delighted that they have applied their brains and come
    back with some wonderful new doctrine and tactics.
        In space, sir, may I comment that the leadership--under the
    leadership of Under Secretary of the Air Force Pete Teets, we
    are working to put our space programs on track. Pete inherited
    a number of ongoing programs that needed revitalizing. Besides
    working programs, he has increased the unity of effort among
    the Air Force, the National Reconnaissance Office, and
    intelligence community in ways that we have never seen in the
    past. I can think of no one more knowledgeable to lead our
    space efforts and our space personnel. Recognizing these space
    professionals as a segment of warriors requiring special
    attention, Pete Teets has developed a roadmap designed to
    develop more in-depth expertise in operational and technical
    space specialties.
        This evolving expertise served us well in Operation Iraqi
    Freedom, where Air Force General Buzz Moseley was both the
    CFACC and the senior space authority for all Joint and
    Coalition space activities. These improvements will continue to
    enhance space support for the warfighter, bring a joint
    perspective to our Department of Defense's executive agents--
    our role as the Department of Defense's executive agent for
    space.
        Our next step in space will be to focus on what we call
    Joint Warfighting in space, a new initiative that General
    Jumper and I are trying to undertake. This focus area strives
    to develop rapidly launched, responsive, and survivable
    Microsats that advances our ability to protect our space assets
    and enhances our direct support to Joint Force commanders
    throughout the globe. Part of that support includes Command and
    Control (C\2\) networks. Using both air and space media, we
    envision a C\2\ constellation that is robust, a protected
    network, and globally based command and control system that
    accomplishes all levels of the battle. This network is one that
    allows machines to do the integration and fusion, but leaves
    combat experience and judgement to leaders. It uses battlefield
    management command and control that will consist of command
    sensors--command centers, sensors, and systems, like space-
    based radar (SBR), transformational satellite (TSAT)
    communications, Global Hawk, Predator, other drones, airborne--
    AMTI and GMTI--that's airborne moving target indicator and
    ground moving target indicator--distribute a common ground
    picture in our air operations centers, all geared towards
    achieving the objectives of the joint battlefield commander. We
    are at the very early stages, and now we're thinking through
    what the architecture ought to be.
        Mr. Chairman, our 2005 budget supports the Air Force's
    joint focus. The $98.5 billion budget request invests in a
    portfolio of military advantages, advantages that depend on our
    ability to develop and maintain our airmen, maintain our
    readiness, improve our infrastructure, and provide decisive
    effects-based capabilities to the Joint Force commander
    anytime, anyplace, under any condition. Our budget request
    increases both Research Development Test and Evaluation (RTD&E)
    and procurement to support our emphasis on transformation and
    modernization, consistent with the strategy we discussed.

                        FISCAL YEAR 2005 BUDGET REQUEST

        In the fiscal year 2005 budget request, we make a
    significant investment in a number of critical joint systems--
    14 C-17s, 11 C-130J's, seven Predators, A's and two B's, four
    Global Hawks, and joint space capabilities, including
    transformational communications, space-based radar, and
    military satellite communications (SATCOM). We're also
    investing in joint weapons, including more than 23,000 Joint
    Direct Attack Munitions (JDAMs). Our bottom line, Mr. Chairman,
    is that we are committed to the joint fight. In fact, joint
    enablers account for roughly 50 percent of the Air Force's real
    budget growth.

                          SUPPLEMENTAL APPROPRIATIONS

        Finally, we know there are concerns with respect to our
    ability to continue operating without a supplemental. In the
    Air Force, we have the ability to cash-flow into fiscal year
    2005, preserving our ability of operating at home and abroad.
    This assumes we get no additional bills in any kind of
    rebalancing. Right now, we see ourselves about $2 billion
    short, and that's because of some bills that have come, plus
    some other changes inside the Air Force, and we are looking for
    ways to reprogram to handle those.
        Mr. Chairman and members of the committee, I am proud to be
    a part of the finest Air Force in the world, and I'm honored to
    be part of the joint team that has done so much to defend
    America and our interests. With your continued support and the
    investments--that this budget makes in adapting our force to
    the demands of this new era, we will continue to deliver for
    our Nation.

                               PREPARED STATEMENT

        I look forward to your questions. Thank you so much for all
    your support, sir.
        [The statement follows:]
                   Prepared Statement of Hon. James G. Roche
        Mr. Chairman, Senator Inouye, and distinguished 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.
        Throughout our distinguished history, America's Air Force has
    remained the world's premier air and space power because of our
    professional airmen, our investment in warfighting technology, and our
    ability to integrate our people and systems together to produce
    decisive effects. These Air Force competencies are the foundation that
    will ensure we are prepared for the unknown threats of an uncertain
    future. They will ensure that our Combatant Commanders have the tools
    they need to maintain a broad and sustained advantage over any emerging
    adversaries.
        In this strategic environment of the 21st century, and along with
    our sister services, our Air Force will continue to fulfill our
    obligation to protect America, deter aggression, assure our allies, and
    defeat our enemies. As we adapt the Air Force to the demands of this
    era, we remain committed to fulfilling our global commitments as part
    of the joint warfighting team. In partnership, and with the continuing
    assistance of the Congress, we will shape the force to meet the needs
    of this century, fight the Global War on Terrorism, and defend our
    nation.
        The 2004 Posture Statement is our vision for the upcoming year and
    is the blueprint we will follow to sustain our air and space dominance
    in the future. We are America's Air Force--disciplined airmen, dominant
    in warfighting, decisive in conflict.

                                  INTRODUCTION

        In 2003, U.S. and coalition military operations produced
    unprecedented mission successes--across the spectrum of conflict and
    around the globe. The joint warfighting team demonstrated combat
    capability never previously witnessed in the history of conflict.
    Integrating capabilities from air, land, sea, and space, the U.S. and
    coalition allies achieved considerable progress in the ongoing Global
    War on Terrorism. In our most recent engagements, our armed forces
    fulfilled our immediate obligations to defend America, deter
    aggression, assure our allies, and defeat our enemies.
        The foundation of these achievements can be found in the Department
    of Defense's (DOD) commitment to teamwork and excellence. Operation
    IRAQI FREEDOM (OIF) was a joint and coalition warfighting effort from
    planning to execution. Air, ground, maritime, and space forces worked
    together at the same time for the same objectives, not merely staying
    out of each other's way, but orchestrated to achieve wartime
    objectives. Our air and space forces achieved dominance throughout the
    entire theater, enabling maritime and ground forces to operate without
    fear of enemy air attack. Our airmen demonstrated the flexibility,
    speed, precision, and compelling effects of air and space power,
    successfully engaging the full range of enemy targets, from the
    regime's leadership to fielded forces. When our ground and maritime
    components engaged the enemy, they were confident our airmen would be
    there--either in advance of their attacks, or in support of their
    operations. And America's Air Force was there, disciplined, dominant,
    and decisive.
        These operational accomplishments illustrate the growing maturation
    of air and space power. Leveraging the expertise of our airmen, the
    technologies present in our 21st century force, and the strategies,
    concepts of operation, and organizations in use today, the U.S. Air
    Force continues to adapt to meet the demands of this new era, while
    pursuing the war on terrorism and defending the homeland.
        On September 11, 2001, the dangers of the 21st century became
    apparent to the world. Today, the United States faces an array of
    asymmetric threats from terrorists and rogue states, including a threat
    that poses the gravest danger to our nation, the growing nexus of
    radicalism and technology. As we continue our work in Afghanistan and
    Iraq, we stand ready to respond to flashpoints around the world,
    prepared to counter the proliferation of weapons of mass destruction to
    unfriendly states and non-state entities.
        We are adapting to new and enduring challenges. As we do, we are
    exploiting the inherent sources of strength that give us the advantages
    we enjoy today. It is a strategy predicated on the idea that, if we
    accurately assess our own advantages and strengths, we can invest in
    them to yield high rates of military return. This approach helps us
    create a portfolio of advantages allowing us to produce and continue to
    exploit our capabilities. Our goal is to create a capability mix
    consistent with operational concepts and effects-driven methodology,
    relevant to the joint character and increasingly asymmetric conduct of
    warfare.
        Since 1945, when General Henry ``Hap'' Arnold and Dr. Theodore von
    Karman published Toward New Horizons, the Air Force has evolved to meet
    the changing needs of the nation--with the sole objective of improving
    our ability to generate overwhelming and strategically compelling
    effects from air and now, space. It is our heritage to adapt and we
    will continue to do so. During this comparatively short history, we
    became the best air and space force in the world through our focus on
    the development of professional airmen, our investment in warfighting
    technology, and our ability to integrate people and systems to produce
    decisive joint warfighting effects.
        The Air Force is making a conscious investment in education,
    training, and leader development to foster critical thinking,
    innovation, and encourage risk taking. We deliberately prepare our
    airmen--officer, enlisted, and civilian--with experience, assignments,
    and broadening that will allow them to succeed. When our airmen act in
    the combined or joint arena, whether as an Air Liaison Officer to a
    ground maneuver element, or as the space advisor to the Joint Force
    Commander (JFC), this focused professional development will guide their
    success.
        We are also investing in technologies that will enable us to create
    a fully integrated force of intelligence capabilities, manned, unmanned
    and space assets that communicate at the machine-to-machine level, and
    real-time global command and control (C\2\) of joint, allied, and
    coalition forces. Collectively, these assets will enable compression of
    the targeting cycle and near-instantaneous global precision-strike.
        As we cultivate new concepts of global engagement, we will move
    from analog to digital processes and adopt more agile, non-linear ways
    of integrating to achieve mission success. This change in thinking
    leads to capabilities including: networked communications; multi-
    mission platforms which fuse multi-spectral sensors; integrated global
    intelligence, surveillance, and reconnaissance (ISR); robust, all-
    weather weapons delivery with increased standoff; small smart weapons;
    remotely-piloted and unattended aircraft systems; advanced air
    operations centers; more secure position, navigation, and timing; and a
    new generation of satellites with more operationally responsive launch
    systems.
        Investment in our core competencies is the foundation of our
    preparation for future threats. They ensure we have the tools we need
    to maintain strategic deterrence as well as a sustained advantage over
    our potential adversaries. Ultimately, they ensure we can deliver the
    dominant warfighting capability our nation needs.
        Potential adversaries, however, continue to pursue capabilities
    that threaten the dominance we enjoy today. Double-digit surface-to-air
    missile systems (SAMs) are proliferating. China has purchased
    significant numbers of these advanced SAMs, and there is a risk of
    wider future proliferation to potential threat nations. Fifth-
    generation advanced aircraft with capabilities superior to our present
    fleet of frontline fighter/attack aircraft are in production. China has
    also purchased, and is developing, advanced fighter aircraft that are
    broadly comparable to the best of our current frontline fighters.
    Advanced cruise missile technology is expanding, and information
    technology is spreading. Access to satellite communications, imagery,
    and use of the Global Positioning System (GPS) signal for navigation
    are now available for anyone willing to purchase the necessary
    equipment or services. With this relentless technological progress and
    the potential parity of foreign nations, as well as their potential
    application in future threats, the mere maintenance of our aging
    aircraft and space systems will not suffice. Simply stated, our current
    fleet of legacy systems cannot always ensure air and space dominance in
    future engagements.
        To counter these trends, we are pursuing a range of strategies that
    will guide our modernization and recapitalization efforts. We are using
    a capabilities-based planning and budgeting process, an integrated and
    systematic risk assessment system, a commitment to shorter acquisition
    cycle times, and improved program oversight. Our goal is to integrate
    our combat, information warfare, and support systems to create a
    portfolio of air and space advantages for the joint warfighter and the
    nation. Thus, we continue to advocate for program stability in our
    modernization and investment accounts.
        The principal mechanisms that facilitate this process are our Air
    Force Concepts of Operation (CONOPS). Through the CONOPS, we analyze
    problems we'll be asked to solve for the JFCs, identify the
    capabilities our expeditionary forces need to accomplish their
    missions, and define the operational effects we expect to produce.
    Through this approach, we can make smarter decisions about future
    investment, articulate the link between systems and employment
    concepts, and identify our capability gaps and risks.
        The priorities that emerge from the CONOPS will guide a reformed
    acquisition process that includes more active, continuous, and creative
    partnerships among the requirement, development, operational test, and
    industry communities who work side-by-side at the program level. In our
    science and technology planning, we are also working to demonstrate and
    integrate promising technologies quickly by providing an operational
    ``pull'' that conveys a clear vision of the capabilities we need for
    the future.
        We are applying this approach to our space systems as well. As the
    DOD's Executive Agent for Space, we are producing innovative solutions
    for the most challenging national security problems. We have defined a
    series of priorities essential to delivering space-based capabilities
    to the joint warfighter and the Intelligence Community. Achieving
    mission success--in operations and acquisition--is our principal
    priority. This requires us to concentrate on designing and building
    quality into our systems. To achieve these exacting standards, we will
    concentrate on the technical aspects of our space programs early on--
    relying on strong systems engineering design, discipline, and robust
    test programs. We also have many areas that require a sustained
    investment. We need to replace aging satellites, improve outmoded
    ground control stations, achieve space control capabilities to ensure
    freedom of action, sustain operationally responsive assured access to
    space, address bandwidth limitations, and focus space science and
    technology investment programs. This effort will require reinvigorating
    the space industrial base and funding smaller technology incubators to
    generate creative ``over the horizon'' ideas.
        As we address the problem of aging systems through renewed
    investment, we will continue to find innovative means to keep current
    systems operationally effective. In OIF, the spirit of innovation
    flourished. We achieved a number of air and space power firsts:
    employment of the B-1 bomber's synthetic aperture radar and ground
    moving target indicator for ISR; incorporation of the Litening II
    targeting pod on the F-15, F-16, A-10, and the B-52; and use of a
    Global Hawk for strike coordination and reconnaissance while flown as a
    remotely piloted aircraft. With these integrated air and space
    capabilities, we were able to precisely find, fix, track, target, and
    rapidly engage our adversaries. These examples illustrate how we are
    approaching adaptation in the U.S. Air Force.
        Ultimately, the success of our Air Force in accomplishing our
    mission and adapting to the exigencies of combat stems from the more
    than 700,000 active, guard, reserve, and civilian professionals who
    proudly call themselves ``airmen.'' In the past five years, they have
    displayed their competence and bravery in three major conflicts: the
    Balkans, Afghanistan, and Iraq. They are a formidable warfighting
    force, imbued with an expeditionary culture, and ready for the
    challenges of a dangerous world.
        Poised to defend America's interests, we continue to satisfy an
    unprecedented demand for air and space warfighting capabilities--
    projecting American power globally while providing effective homeland
    defense. This is the U.S. Air Force in 2004--we foster ingenuity in the
    world's most professional airmen, thrive on transitioning new
    technologies into joint warfighting systems, and drive relentlessly
    toward integration to realize the potential of our air and space
    capabilities. We are America's Airmen--confident in our capability to
    provide our nation with dominance in air and space.

                  AIR AND SPACE DOMINANCE IN A NEW ENVIRONMENT

        The U.S. Air Force ensures a flexible, responsive, and dominant
    force by providing a spectrum of operational capabilities that
    integrate with joint and coalition forces. To sustain and improve upon
    the dominance we enjoy today, the Air Force will remain engaged with
    the other services, our coalition partners, interagency teams, and the
    aerospace industry. As we do, we will incorporate the lessons learned
    from rigorous evaluation of past operations, detailed analyses of
    ongoing combat operations, and thoughtful prediction of the
    capabilities required of a future force.
        The pace of operations over the past year enabled us to validate
    the function and structure of our Air and Space Expeditionary Forces
    (AEFs). Operations in 2003 demanded more capability from our AEFs than
    at any time since their inception in 1998. However, for the first time
    we relied exclusively on our AEFs to present the full range of our
    capabilities to the Combatant Commanders. Through our 10 AEFs, our AEF
    prime capabilities (space, national ISR, long range strike, nuclear,
    and other assets), and our AEF mobility assets, we demonstrated our
    ability to package forces, selecting the most appropriate combat ready
    forces from our Total Force, built and presented expeditionary units,
    and flowed them to the theaters of operation in a timely and logical
    sequence. We rapidly delivered them to the warfighters, while
    preserving a highly capable residual force to satisfy our global
    commitments.
        More than three-fourths of our 359,300 active duty airmen are
    eligible to deploy and are assigned to an AEF. Through much of the past
    year, Total Force capabilities from 8 of the 10 AEFs were engaged
    simultaneously in worldwide operations. The remaining elements were
    returning from operations, training, or preparing to relieve those
    currently engaged. By the end of 2003, more than 26,000 airmen were
    deployed, supporting operations around the world.
        In 2004, we will continue to use the AEFs to meet our global
    requirements while concurrently reconstituting the force. Our number
    one reconstitution priority is returning our forces to a sustainable
    AEF battle rhythm while conducting combat operations. Attaining this
    goal is about revitalizing capabilities. For most airmen, that will
    include a renewed emphasis on joint composite force training and
    preparation for rotations in the AEF. Through the AEF, the Air Force
    presents right-sized, highly trained expeditionary units to JFCs for
    employment across the spectrum of conflict.

    Global War on Terrorism
        The year 2003 marked another historic milestone for the United
    States and the Air Force in the Global War on Terrorism. Since
    September 11, 2001, air and space power has proven indispensable to
    securing American skies, defeating the Taliban, denying sanctuary to al
    Qaeda and other terrorist organizations, and most recently, removing a
    brutal and oppressive dictator in Iraq. This Global War on Terrorism
    imposes on airmen a new steady state of accelerated operations and
    personnel tempo (PERSTEMPO), as well as a demand for unprecedented
    speed, agility, and innovation in defeating unconventional and
    unexpected threats, all while bringing stability and freedom to
    Afghanistan and Iraq. The Air Force and its airmen will meet these
    demands.

    Operation NOBLE EAGLE
        High above our nation, airmen protect our skies and cities through
    air defense operations known as Operation NOBLE EAGLE (ONE). The Total
    Force team, comprised of active duty, Air National Guard, and Air Force
    Reserve airmen, conducts airborne early warning, air refueling, and
    combat air patrol operations in order to protect sensitive sites,
    metropolitan areas, and critical infrastructure.
        This constant ``top cover'' demands significant Air Force assets,
    thus raising the baseline of requirements above the pre-September 11
    tempo. Since 2001, this baseline has meant over 34,000 fighter, tanker,
    and airborne early warning sorties were added to Air Force
    requirements.
        This year the Air Force scrambled nearly 1,000 aircraft, responding
    to 800 incidents. Eight active duty, eight Air Force Reserve, and 18
    Air National Guard units provided 1,300 tanker sorties offloading more
    than 32 million pounds of fuel for these missions. Last year, over
    2,400 airmen stood vigilant at air defense sector operations centers
    and other radar sites. Additionally, in 2003, we continued to
    institutionalize changes to our homeland defense mission through joint,
    combined, and interagency training and planning. Participating in the
    initial validation exercise DETERMINED PROMISE-03, the Air Force
    illustrated how its air defense, air mobility, and command and control
    capabilities work seamlessly with other agencies supporting NORTHCOM
    and Department of Homeland Security objectives. The integration and
    readiness that comes from careful planning and rigorous training will
    ensure the continued security of America's skies.

    Operation ENDURING FREEDOM--Afghanistan
        Operation ENDURING FREEDOM--Afghanistan (OEF) is ongoing. Remnants
    of Taliban forces continue to attack United States, NATO, coalition
    troops, humanitarian aid workers, and others involved in the
    reconstruction of Afghanistan. To defeat this threat, aid coalition
    stability, and support operations, the Air Force has maintained a
    presence of nearly 24,000 airmen in and around the region. Having
    already flown more than 90,000 sorties (over 72 percent of all OEF
    missions flown), the Air Force team of active, Guard, and Reserve
    airmen continue to perform ISR, close air support (CAS), aerial
    refueling, and tactical and strategic airlift.
        While fully engaged in ONE and OIF, the men and women of the Air
    Force provided full spectrum air and space support, orchestrating
    assets from every service and ten different nations. Of these, Air
    Force strike aircraft flying from nine bases flew more than two-thirds
    of the combat missions, dropped more than 66,000 munitions (9,650 tons)
    and damaged or destroyed approximately three-quarters of planned
    targets. In 2003 alone, Air Force assets provided more than 3,000
    sorties of on-call CAS, responding to calls from joint and/or coalition
    forces on the ground.
        Last year, the Air Force brought personnel and materiel into this
    distant, land-locked nation via 7,410 sorties. Over 4,100 passengers
    and 487 tons of cargo were moved by airmen operating at various Tanker
    Airlift Control Elements in and around Afghanistan. To support these
    airlift and combat sorties and the numerous air assets of the coalition
    with aerial refueling, the Air Force deployed over 50 tankers. In their
    primary role, these late 1950s-era and early 1960s-era KC-135 tankers
    flew more than 3,900 refueling missions. In their secondary airlift
    role, they delivered 3,620 passengers and 405 tons of cargo. Without
    versatile tankers, our armed forces would need greater access to
    foreign bases, more aircraft to accomplish the same mission, more
    airlift assets, and generate more sorties to maintain the required
    duration on-station.
        Operations in Afghanistan also highlight U.S. and coalition
    reliance on U.S. space capabilities. This spanned accurate global
    weather, precise navigation, communications, as well as persistent
    worldwide missile warning and surveillance. For example, OEF relied on
    precision navigation provided by the Air Force's GPS constellation,
    over-the-horizon satellite communications (SATCOM), and timely
    observations of weather, geodesy, and enemy activity. To accomplish
    this, space professionals performed thousands of precise satellite
    contacts and hundreds of station keeping adjustments to provide
    transparent space capability to the warfighter. These vital space
    capabilities and joint enablers directly leveraged our ability to
    pursue U.S. objectives in OEF.

    Operations NORTHERN WATCH and SOUTHERN WATCH
        During the past 12 years, the Air Force flew over 391,000 sorties
    enforcing the northern and southern no-fly zones over Iraq. With the
    preponderance of forces, the Air Force, along with the Navy and Marine
    Corps, worked alongside the Royal Air Force in Operations NORTHERN
    WATCH (ONW) and SOUTHERN WATCH (OSW). Manning radar outposts and
    established C\2\ centers, conducting ISR along Iraq's borders,
    responding to almost daily acts of Iraqi aggression, and maintaining
    the required airlift and air refueling missions taxed Air Force assets
    since the end of Operation DESERT STORM. Yet, these successful air
    operations had three main effects: they halted air attacks on the
    ethnic minority populations under the no-fly zones; they deterred a
    repeat of Iraqi aggression against its neighbors; and they leveraged
    enforcement of United Nations Security Council Resolutions. Throughout
    this period, our airmen honed their warfighting skills, gained
    familiarity with the region, and were able to establish favorable
    conditions for OIF. For more than a decade, American airmen rose to one
    of our nation's most important challenges, containing Saddam Hussein.

    Operation IRAQI FREEDOM
        On March 19, 2003, our airmen, alongside fellow soldiers, sailors,
    marines and coalition teammates, were called upon to remove the
    dangerous and oppressive Iraqi regime--this date marked the end of ONW/
    OSW and the beginning of OIF. OIF crystallized the meaning of jointness
    and the synergies of combined arms and persistent battlefield
    awareness.
        In the first minutes of OIF, airmen of our Combat Air Forces (USAF,
    USN, USMC, and coalition) were flying over Baghdad. As major land
    forces crossed the line of departure, Air Force assets pounded Iraqi
    command and control facilities and key leadership targets, decapitating
    the decision-makers from their fielded forces. Remaining Iraqi leaders
    operated with outdated information about ground forces that had already
    moved miles beyond their reach. As the land component raced toward
    Baghdad, coalition strike aircraft were simultaneously attacking Iraqi
    fielded forces, communications and command and control centers,
    surface-to-surface missile launch sites, and were supporting special
    operations forces, and ensuring complete air and space dominance in the
    skies over Iraq. Due to these actions and those during the previous 12
    years, none of the 19 Iraqi missile launches were successful in
    disrupting coalition operations, and not a single Iraqi combat sortie
    flew during this conflict. Twenty-one days after major combat
    operations began, the first U.S. land forces reached Baghdad. Five days
    later, the last major city in Iraq capitulated.
        The Air Force provided over 7,000 CAS sorties to aid land forces in
    the quickest ground force movement in history. Lieutenant General
    William S. Wallace, Commander of the U.S. Army V Corps said, ``none of
    my commanders complained about the availability, responsiveness, or
    effectiveness of CAS--it was unprecedented!'' As Iraqi forces attempted
    to stand against the integrated air and ground offensive, they found a
    joint and coalition team that was better equipped, better trained, and
    better led than ever brought to the field of battle.
        Training, leadership, and innovation coupled with the Air Force's
    recent investment in air mobility allowed U.S. forces to open a second
    major front in the Iraqi campaign. Constrained from access by land, Air
    Force C-17s airdropped over 1,000 paratroopers from the 173rd Airborne
    Brigade into northern Iraq. This successful mission opened Bashur
    airfield and ensured U.S. forces could be resupplied.
        Before 2003, the Air Force invested heavily in the lessons learned
    from OEF. Shortening the ``kill chain,'' or the time it took to find,
    fix, track, target, engage, and assess was one of our top priorities.
    This investment was worthwhile, as 156 time-sensitive targets were
    engaged within minutes, most with precision weapons. The flexibility of
    centralized control and decentralized execution of air and space power
    enabled direct support to JFC objectives throughout Iraq. Coalition and
    joint airpower shaped the battlefield ahead of ground forces, provided
    intelligence and security to the flanks and rear of the rapidly
    advancing coalition, and served as a force multiplier for Special
    Operations forces. This synergy between Special Operations and the Air
    Force allowed small specialized teams to have a major effect throughout
    the northern and western portions of Iraq by magnifying their inherent
    lethality, guaranteeing rapid tactical mobility, reducing their
    footprint through aerial resupply, and providing them the advantage of
    ``knowing what was over the next hill'' through air and space-borne
    ISR.
        The Air Force's C\2\ISR assets enabled the joint force in
    Afghanistan as well. This invaluable fleet includes the RC-135 Rivet
    Joint, E-8 JSTARS, and the E-3 AWACS. This ``Iron Triad'' of
    intelligence sensors and C\2\ capabilities illustrates the Air Force
    vision of horizontal integration in terms of persistent battlefield
    awareness. Combined with the Global Hawk unmanned aerial vehicle and
    Predator remotely piloted aircraft, spaced-based systems, U-2, and
    Compass Call, these invaluable system provided all-weather, multi-
    source intelligence to commanders from all services throughout the area
    of responsibility.
        OIF was the Predator's first ``networked'' operation. Four
    simultaneous Predator orbits were flown over Iraq and an additional
    orbit operated over Afghanistan, with three of those orbits controlled
    via remote operations in the United States. This combined reachback
    enabled dynamic support to numerous OIF missions. Predator also
    contributed to our operational flexibility, accomplishing hunter-killer
    missions, tactical ballistic missile search, force protection, focused
    intelligence collection, air strike control, and special operations
    support. A Hellfire equipped Predator also conducted numerous precision
    strikes against Iraqi targets, and flew armed escort missions with U.S.
    Army helicopters.
        Space power provided precise, all-weather navigation, global
    communications, missile warning, and surveillance. The ability to adapt
    to adverse weather conditions, including sandstorms, allowed air, land,
    and maritime forces to confound the Iraqi military and denied safe
    haven anywhere in their own country. As the Iraqis attempted to use
    ground-based GPS jammers, Air Force strike assets destroyed them, in
    some cases, using the very munitions the jammers attempted to defeat.
    As Defense Secretary Donald Rumsfeld noted, this new era was
    illustrated by the coalition's ``unprecedented combination of power,
    precision, speed, and flexibility.''
        During the height of OIF, the Air Force deployed 54,955 airmen.
    Ambassador Paul Bremer, Chief of the Coalition Provisional Authority,
    pronounced, ``In roughly three weeks [we] liberated a country larger
    than Germany and Italy combined, and [we] did so with forces smaller
    than the Army of the Potomac.'' Led by the finest officers and non-
    commissioned officers, our airmen flew more than 79,000 sorties since
    March of 2003. Ten thousand strike sorties dropped 37,065 munitions.
    The coalition flew over 55,000 airlift sorties moved 469,093 passengers
    and more than 165,060 tons of cargo. In addition, over 10,000 aerial
    refueling missions supported aircraft from all services, and 1,600 ISR
    missions provided battlespace awareness regardless of uniform, service,
    or coalition nationality. This was a blistering campaign that demanded
    a joint and combined effort to maximize effects in the battlespace.
        Today, Air Force airmen continue to contribute to the joint and
    coalition team engaged in Iraq. At the end of the year, 6,723 airmen
    from the active duty, Reserve, and Air National Guard conducted a wide
    range of missions from locations overseas, flying approximately 150
    sorties per day including CAS for ground forces tracking down regime
    loyalists, foreign fighters, and terrorists. On a daily basis, U-2 and
    RC-135 aircraft flew ISR sorties monitoring the porous borders of Iraq
    and providing situational awareness and route planning for Army patrols
    in stability and support operations. Providing everything from base
    security for 27 new bases opened by the coalition to the lifeline of
    supplies that air mobility and air refueling assets bring to all joint
    forces, Air Force airmen are committed to the successful accomplishment
    of the U.S. mission in Iraq.

    Other Contingency Operations
        In 2003, the Air Force remained engaged in America's war on drugs
    and provided support to NATO ground forces in the Balkans. Since
    December 1989, Air Force airmen have been an irreplaceable part of the
    interagency fight against illegal drug and narcotics trafficking.
    Deployed along the southern United States, in the Caribbean, and
    Central and South America, airmen perform this round-the-clock mission,
    manning nine ground-based radar sites, operating ten aerostats, and
    flying counter drug surveillance missions. The Air Force detected,
    monitored, and provided intercepts on over 275 targets attempting to
    infiltrate our airspace without clearance. Along with our interagency
    partners, these operations resulted in 221 arrests and stopped hundreds
    of tons of contraband from being smuggled into our country.
        In the Balkans, airmen are fully committed to completing the
    mission that they started in the 1990s. Today, Air Force airmen have
    flown over 26,000 sorties supporting Operations JOINT GUARDIAN and
    JOINT FORGE. These NATO-led operations combine joint and allied forces
    to implement the Dayton Peace Accords in Bosnia-Herzegovina and enforce
    the Military Technical Agreement in Kosovo. At the end of 2003,
    approximately 800 airmen were supporting NATO's goal of achieving a
    secure environment and promoting stability in the region.
        Additionally, the Air Force engaged in deterrence and humanitarian
    relief in other regions. While the world's attention was focused on the
    Middle East in the spring of 2003, our nation remained vigilant against
    potential adversaries in Asia. The Air Force deployed a bomber wing--24
    B-52s and B-1s--to the American territory of Guam to deter North Korea.
    At the height of OIF, our Air Force demonstrated our country's resolve
    and ability to defend the Republic of Korea and Japan by surging bomber
    operations to over 100 sorties in less than three days. This deterrent
    operation complemented our permanent engagement in Northeast Asia. The
    8,300 airmen who are stationed alongside the soldiers, sailors,
    Marines, and our Korean allies maintained the United Nations armistice,
    marking 50 years of peace on the peninsula.
        Our strength in deterring aggression was matched by our strength in
    humanitarian action. In response to President Bush's directive to help
    stop the worsening crisis in Liberia, we deployed a non-combat medical
    and logistics force to create a lifeline to the American Embassy and
    provide hope to the Liberian people. An Expeditionary Group of airmen
    provided airlift support, aeromedical evacuation, force protection, and
    theater of communications support. Flying more than 200 sorties, we
    transported and evacuated civilians and members of the Joint Task Force
    (JTF) from bases in Sierra Leone and Senegal. The 300 airmen deployed
    in support of JTF-Liberia reopened the main airport in Monrovia, and
    ensured the security for U.S. military and civilian aircraft providing
    relief aid.

    Strategic Deterrence
        The ability of U.S. conventional forces to operate and project
    decisive force is built on the foundation of our strategic deterrent
    force; one that consists of our nuclear-capable aircraft and
    Intercontinental Ballistic Missile forces, working with the U.S. Navy's
    Fleet Ballistic Missile Submarines. In 2003, these forces as well as,
    persistent overhead missile warning sensors and supporting ground-based
    radars, provided uninterrupted global vigilance deterring a nuclear
    missile strike against the United States or our allies. The dedicated
    airmen who operate these systems provide the force capability that
    yields our deterrent umbrella. Should that deterrence fail, they stand
    ready to provide a prompt, scalable response.

    Exercises
        The Air Force's success can be attributed to the training,
    education, and equipment of our airmen. Future readiness of our
    operations, maintenance, mission support, and medical units will depend
    on rigorous and innovative joint and coalition training and exercising.
    This year we are planning 140 exercises with other services and
    agencies and we anticipate being involved with 103 allied nations. We
    will conduct these exercises in as many as 45 foreign countries.
    Participation ranges from the Joint/Combined command post exercise
    ULCHI FOCUS LENS with our South Korean partners to the tailored
    international participation in our FLAG exercises and Mission
    Employment Phases of USAF Weapons School. From joint search-and-rescue
    forces in ARCTIC SAREX to Partnership for Peace initiatives, our airmen
    must continue to take advantage of all opportunities that help us train
    the way we intend to fight.
        In addition to previously designed exercises, recent operations
    highlighted the need for combat support training. During OEF and OIF,
    the Air Force opened or improved 38 bases used by joint or coalition
    forces during combat. Our Expeditionary Combat Support teams
    established secure, operable airfields in Kyrgyzstan, Uzbekistan,
    Pakistan, and in Iraq. They also built housing, established
    communications, and erected dining facilities that are still used by
    other services and follow-on forces today. To prepare our airmen for
    these missions, we have created EAGLE FLAG, an Expeditionary Combat
    Support Field Training Exercise. During this exercise, combat support
    personnel apply the integrated skills needed to organize and create an
    operating location ready to receive fully mission capable forces within
    72 hours. From security forces and civil engineers to air traffic
    controllers and logisticians, each airman required to open a new base
    or improve an austere location will eventually participate in this
    valuable exercise.
        Our ranges and air space are critical joint enablers and vital
    national assets that allow the Air Force to develop and test new
    weapons, train forces, and conduct joint exercises. The ability of the
    Air Force to effectively operate requires a finite set of natural and
    fabricated resources. Encroachment of surrounding communities onto Air
    Force resources results in our limited or denied access to, or use of,
    these resources. We have made it a priority to define and quantify the
    resources needed to support mission requirements, and to measure and
    communicate the effects of encroachment on our installations, radio
    frequency spectrum, ranges, and air space. We will continue to work
    with outside agencies and the public to address these issues. The Air
    Force strongly endorses the Readiness Range and Preservation
    Initiative. It would make focused legislative changes, protecting the
    Air Force's operational resources while continuing to preserve our
    nation's environment.

    Lessons for the Future
        As we continue combat operations and prepare for an uncertain
    future, we are examining lessons from our recent experiences. Although
    we are currently engaged with each of the other services to refine the
    lessons from OIF, many of the priorities listed in the fiscal year 2005
    Presidential Budget submission reflect our preliminary conclusions. The
    Air Force has established a team committed to turning validated lessons
    into new equipment, new operating concepts, and possibly new
    organizational structures. Working closely with our joint and coalition
    partners, we intend to continue our momentum toward an even more
    effective fighting force.
        One of the most important lessons we can draw was envisioned by the
    authors of the Goldwater-Nichols Act. ONE, OEF, and OIF all validated
    jointness as the only acceptable method of fighting and winning this
    nation's wars. In OIF, the mature relationship between the Combined
    Forces Land Component Commander (CFLCC) and the Combined Forces Air
    Component Commander (CFACC) led to unprecedented synergies. The CFACC
    capitalized on these opportunities by establishing coordination
    entities led by an Air Force general officer in the supported land
    component headquarters and by maintaining internal Army, Navy, Marine
    Corps, and coalition officers in his own headquarters. Both of these
    organizational innovations enabled commanders to maximize the
    advantages of mass, lethality, and flexibility of airpower in the area
    of responsibility.
        Another lesson is the Air Force's dependence on the Total Force
    concept. As stated above, September 11 brought with it a new tempo of
    operations, one that required both the active duty and Air Reserve
    Component (ARC) to work in concert to achieve our national security
    objectives. The synergy of our fully integrated active duty, Air
    National Guard and Air Force Reserve team provides warfighters with
    capabilities that these components could not provide alone.
        Our reserve component accounts for over one-third of our strike
    fighters, more than 72 percent of our tactical airlift, 42 percent of
    our strategic airlift, and 52 percent of our air refueling capability.
    The ARC also makes significant contributions to our rescue and support
    missions, and has an increasing presence in space, intelligence, and
    information operations. In all, the ARC provides a ready force
    requiring minimum preparation for mobilization. Whether that
    mobilization is supporting flight or alert missions for ONE, commanding
    expeditionary wings in combat, or orchestrating the Air Force Special
    Operations roles in the western Iraqi desert, the ARC will remain
    critical to achieving the full potential of our air and space power.
        A third lesson was validation of the need for air and space
    superiority. Through recent combat operations, the Air Force maintained
    its almost 50 year-old record of ``no U.S. ground troops killed by
    enemy air attack.'' Without having to defend against Iraqi airpower,
    coalition commanders could focus their combat power more effectively.
    In addition, air and space superiority allowed airmen to dedicate more
    sorties in support of the ground scheme of maneuver, substantially
    reducing enemy capability in advance of the land component.
        We also need to continue to advance integration and planning--
    integration of service capabilities to achieve JFC objectives,
    interagency integration to fight the war on terrorism, and information
    integration. Integration of manned, unmanned and space sensors,
    advanced command and control, and the ability to disseminate and act on
    this information in near-real time will drive our combat effectiveness
    in the future. Shared through interoperable machine-to-machine
    interfaces, this data can paint a picture of the battlespace where the
    sum of the wisdom of all sensors will end up with a cursor over the
    target for the operator who can save the target, study the target, or
    destroy the target.
        Finally, there are three general areas for improvement we consider
    imperative: battle damage assessment, fratricide prevention/combat
    identification, and equipping our battlefield airmen. First, battle
    damage assessment shapes the commander's ability for efficient
    employment of military power. Restriking targets that have already been
    destroyed, damaged, or made irrelevant by rapid ground force advances
    wastes sorties that could be devoted to other coalition and joint force
    objectives. Advances in delivery capabilities of our modern fighter/
    attack aircraft and bombers mean that ISR assets must assess more
    targets per strike than ever before. Precision engagement requires
    precision location, identification, and precision assessment. Although
    assets like the Global Hawk, Predator, U-2, Senior Scout, and Rivet
    Joint are equipped with the latest collection technology, the Air
    Force, joint team, and Intelligence Community must work to ensure that
    combat assessments produce timely, accurate, and relevant products for
    the warfighters.
        We are also improving operational procedures and technology to
    minimize incidents of fratricide or ``friendly fire.'' In OIF, major
    steps toward this goal resulted from technological solutions. Blue
    Force Tracker and other combat identification systems on many ground
    force vehicles allowed commanders situational awareness of their forces
    and enemy forces via a common operational picture. Still, not all joint
    or coalition forces are equipped with these technological advances. We
    are pursuing Fire Support Coordination Measures that capitalize on the
    speed and situational awareness digital communications offer rather
    than analog voice communications and grease pencils.
        A third area we are actively improving is the effectiveness of the
    airmen who are embedded with conventional land or Special Forces. With
    assured access to Air Force datalinks and satellites, these
    ``Battlefield Airmen'' can put data directly into air-land-sea weapon
    systems and enable joint force command and control. We have made great
    progress in producing a Battlefield Air Operations Kit that is 70
    percent lighter, with leading-edge power sources; one that will
    increase the combat capability of our controllers. This battle
    management system will reduce engagement times, increase lethality and
    accuracy, and reduce the risk of fratricide. This capability is based
    upon the good ideas of our airmen who have been in combat and
    understand how much a single individual on the battlefield can
    contribute with the right kit.

    Summary
        The airmen of America's Air Force have demonstrated their expertise
    and the value of their contributions to the joint and coalition fight.
    These combat operations are made possible by Air Force investments in
    realistic training and education, superior organization, advanced
    technology, and innovative tactics, techniques, and procedures. In the
    future, our professional airmen will continue to focus advances in
    these and other areas guided by the Air Force CONOPS. Their charter is
    to determine the appropriate capabilities required for joint
    warfighting and to provide maximum effects from, through, and in air
    and space. This structure and associated capabilities-based planning
    will help airmen on their transformational journey, ensuring continued
    operational successes such as those demonstrated in 2003.

               ENSURING AMERICA'S FUTURE AIR AND SPACE DOMINANCE

        Air Force lethality, mobility, speed, precision, and the ability to
    project U.S. military power around the globe provide Combatant
    Commanders the capabilities required to meet the nation's military
    requirements and dominate our enemies. Consistent with the DOD's focus
    on Joint Operating Concepts, we will continue to transform our force--
    meeting the challenges of this era, adapting our forces and people to
    them, and operating our service efficiently. We will adopt service
    concepts and capabilities that support the joint construct and
    capitalize on our core competencies. To sustain our dominance, we
    develop professional airmen, invest in warfighting technology, and
    integrate our people and systems together to produce decisive joint
    warfighting capabilities.

            DEVELOPING AIRMEN--RIGHT PEOPLE, RIGHT PLACE, RIGHT TIME

        At the heart of our combat capability are the professional airmen
    who voluntarily serve the Air Force and our nation. Our airmen turn
    ideas, tools, tactics, techniques, and procedures into global mobility,
    power projection, and battlespace effects. Our focus for the ongoing
    management and development of Air Force personnel will be to: define,
    renew, develop, and sustain the force.

    Defining our Requirements
        To meet current and future requirements, we need the right people
    in the right specialties. The post-September 11 environment has taxed
    our equipment and our people, particularly those associated with force
    protection, ISR, and the buildup and sustainment of expeditionary
    operations. Our analysis shows that we need to shift manpower to
    stressed career fields to meet the demands of this new steady state,
    and we are in the process of doing this. We have realigned personnel
    into our most stressed specialties and hired additional civilians and
    contractors to free military members to focus on military specific
    duties. We have also made multi-million dollar investments in
    technology to reduce certain manpower requirements. We have redirected
    our training and accession systems and have cross-trained personnel
    from specialties where we are over strength to alleviate stressed
    career fields, supporting the Secretary of Defense's vision of moving
    forces ``from the bureaucracy to the battlefield.''
        Since 2001, we've exceeded our congressionally mandated end
    strength by more than 16,000 personnel. In light of the global war on
    terrorism and OIF, DOD allowed this overage, but now we need to get
    back to our mandated end strength. We are addressing this issue in two
    ways: first, by reducing personnel overages in most skills; and second,
    by shaping the remaining force to meet mission requirements. To reduce
    personnel, we will employ a number of voluntary tools to restructure
    manning levels in Air Force specialties, while adjusting our active
    force size to the end strength requirement. As we progress, we will
    evaluate the need to implement additional force shaping steps.
        We are also reviewing our ARC manpower to minimize involuntary
    mobilization of ARC forces for day-to-day, steady state operations
    while ensuring they are prepared to respond in times of crisis. Since
    September 11, 2001, we've mobilized more than 62,000 people in over 100
    units, and many more individual mobilization augmentees. Today, 20
    percent of our AEF packages are comprised of citizen airmen, and
    members of the Guard or Reserve conduct 89 percent of ONE missions. We
    recognize this is a challenge and are taking steps to relieve the
    pressure on the Guard and Reserve.
        In fiscal year 2005, we plan to redistribute forces in a number of
    mission areas among the Reserve and Active components to balance the
    burden on the Reserves. These missions include our Air and Space
    Operations Centers, remotely piloted aircraft systems, Combat Search
    and Rescue, Security Forces, and a number of high demand global
    mobility systems. We are working to increase ARC volunteerism by
    addressing equity of benefits and tour-length flexibility, while
    addressing civilian employer issues. We are also looking at creating
    more full-time positions to reduce our dependency on involuntary
    mobilization.
        We are entering the second year of our agreement to employ Army
    National Guard soldiers for Force Protection at Air Force
    installations, temporarily mitigating our 8,000 personnel shortfall in
    Security Forces. As we do this, we are executing an aggressive plan to
    rapidly burn down the need for Army augmentation and working to
    redesign manpower requirements. Our reduction plan maximizes the use of
    Army volunteers in the second year, and allows for demobilization of
    about one-third of the soldiers employed in the first year.

    Future Total Force
        Just as in combat overseas, we are continuing to pursue seamless
    ARC and active duty integration at home, leveraging the capabilities
    and characteristics of each component, while allowing each to retain
    their cultural identity. We continue to explore a variety of
    organizational initiatives to integrate our active, Guard, and Reserve
    forces. These efforts are intended to expand mission flexibility,
    create efficiencies in our Total Force, and prepare for the future.
    Today's Future Total Force team includes a number of blended or
    associate units that are programmed or are in use. The creation of the
    ``blended'' unit, the 116th Air Control Wing at Robins Air Force Base,
    Georgia, elevated integration to the next level. With an initial
    deployment of over 730 personnel, and significant operational
    achievements in OIF, we are now examining opportunities to integrate
    active, Guard, and Reserve units elsewhere in order to produce even
    more measurable benefits, savings, and efficiencies.
        The reasons for this type of integration are compelling. We can
    maximize our warfighting capabilities by integrating active, Guard, and
    Reserve forces to optimize the contributions of each component.
    Reservists and Guardsmen bring with them capabilities they have
    acquired in civilian jobs, leveraging the experience of ARC personnel.
    Integration relieves PERSTEMPO on the active duty force. Because ARC
    members do not move as often, they provide corporate knowledge,
    stability, and continuity. Finally, integration enhances the retention
    of airmen who decide to leave active service. Because the Guard and
    Reserve are involved in many Air Force missions, we recapture the
    investment we've made by retaining separating active duty members as
    members of the ARC.

    Renewing the Force
        To renew our force, we target our recruitment to ensure a diverse
    force with the talent and drive to be the best airmen in the world's
    greatest Air Force. We will recruit those with the skills most critical
    for our continued success. In fiscal year 2003, our goal was 5,226
    officers and 37,000 enlisted; we exceeded our goal in both categories,
    accessing 5,419 officers and 37,144 enlisted. For fiscal year 2004, we
    plan to access 5,795 officers and 37,000 enlisted.
        In the Air Force, the capabilities we derive from diversity are
    vital to mission excellence and at the core of our strategy to maximize
    our combat capabilities. In this new era, successful military
    operations demand much greater agility, adaptability, and versatility
    to achieve and sustain success. This requires a force comprised of the
    best our nation has to offer, from every segment of society, trained
    and ready to go. Our focus is building a force that consists of men and
    women who possess keener international insight, foreign language
    proficiency, and wide-ranging cultural acumen. Diversity of life
    experiences, education, culture, and background are essential to help
    us achieve the asymmetric advantage we need to defend America's
    interests wherever threatened. Our strength comes from the collective
    application of our diverse talents, and is a critical component of the
    air and space dominance we enjoy today. We must enthusiastically reach
    out to all segments of society to ensure the Air Force offers a
    welcoming career to the best and brightest of American society,
    regardless of their background. By doing so, we attract people from all
    segments of society and tap into the limitless talents resident in our
    diverse population.
        In addition to a diverse force, we also need the correct talent
    mix. We remain concerned about recruiting health care professionals and
    individuals with technical degrees. To meet our needs, we continue to
    focus our efforts to ensure we attract and retain the right people. We
    will also closely monitor ARC recruitment. Historically, the Air
    National Guard and Air Force Reserve Command access close to 25 percent
    of eligible, separating active duty Air Force members with no break in
    service between their active duty and ARC service.

    Developing the Force
        Over the past year, we implemented a new force development
    construct in order to get the right people in the right job at the
    right time with the right skills, knowledge, and experience. Force
    development combines focused assignments and education and training
    opportunities to prepare our people to meet the mission needs of our
    Air Force. Rather than allowing chance and happenstance to guide an
    airman's experience, we will take a deliberate approach to develop
    officers, enlisted, and civilians throughout our Total Force. Through
    targeted education, training, and mission-related experience, we will
    develop professional airmen into joint force warriors with the skills
    needed across the tactical, operational, and strategic levels of
    conflict. Their mission will be to accomplish the joint mission,
    motivate teams, mentor subordinates, and train their successors.
        A segment of warriors requiring special attention is our cadre of
    space professionals, those that design, build, and operate our space
    systems. As military dependence on space grows, the Air Force continues
    to develop this cadre to meet our nation's needs. Our Space
    Professional Strategy is the roadmap for developing that cadre. Air
    Force space professionals will develop more in-depth expertise in
    operational and technical space specialties through tailored
    assignments, education, and training. This roadmap will result in a
    team of scientists, engineers, program managers, and operators skilled
    and knowledgeable in developing, acquiring, applying, sustaining, and
    integrating space capabilities.

    Sustaining the Force
        The Air Force is a retention-based force. Because the skill sets of
    our airmen are not easily replaced, we expend considerable effort to
    retain our people, especially those in high-technology fields and those
    in whom we have invested significant education and training. In 2003,
    we reaped the benefits of an aggressive retention program, aided by a
    renewed focus and investment on education and individual development,
    enlistment and retention bonuses, targeted military pay raises, and
    quality of life improvements. Our fiscal year 2003 enlisted retention
    statistics tell the story. Retention for first term airmen stood at 61
    percent, exceeding our goal by 6 percent. Retention for our second term
    and career airmen was also impressive, achieving 73 percent and 95
    percent respectively. Continued investment in people rewards their
    service, provides a suitable standard of living, and enables us to
    attract and retain the professionals we need.
        One of the highlights of our quality of life focus is housing
    investment. Through military construction and housing privatization, we
    are providing quality homes faster than ever before. Over the next
    three years, the Air Force will renovate or replace more than 40,000
    homes through privatization. At the same time, we will renovate or
    replace an additional 20,000 homes through military construction. With
    the elimination of out-of-pocket housing expenses, our Air Force
    members and their families now have three great options--local
    community housing, traditional military family housing, and privatized
    housing.

    Focus On Fitness
        We recognize that without motivated and combat-ready expeditionary
    airmen throughout our Total Force, our strategies, advanced
    technologies, and integrated capabilities would be much less effective.
    That is why we have renewed our focus on fitness and first-class
    fitness centers. We must be fit to fight. And that demands that we
    reorient our culture to make physical and mental fitness part of our
    daily life as airmen. In January 2004, our new fitness program returned
    to the basics of running, sit-ups, and pushups. The program combines
    our fitness guidelines and weight/body fat standards into one program
    that encompasses the total health of an airman.

                           TECHNOLOGY TO WARFIGHTING

        The Air Force has established a capabilities-based approach to war
    planning, allowing us to focus investments on those capabilities we
    need to support the joint warfighter. This type of planning focuses on
    capabilities required to accomplish a variety of missions and to
    achieve desired effects against any potential threats. Our
    capabilities-based approach requires us to think in new ways and
    consider combinations of systems that create distinctive capabilities.

    Effects Focus: Capabilities-Based CONOPS
        The Air Force has written six CONOPS that support capabilities-
    based planning and the joint vision of combat operations. The CONOPS
    help analyze the span of joint tasks we may be asked to perform and
    define the effects we can produce. Most important, they help us
    identify the capabilities an expeditionary force will need to
    accomplish its mission, creating a framework that enables us to shape
    our portfolio.
      --Homeland Security CONOPS leverages Air Force capabilities with
            joint and interagency efforts to prevent, protect, and respond
            to threats against our homeland--within or beyond U.S.
            territories.
      --Space and Command, Control, Communications, Computers,
            Intelligence, Surveillance, and Reconnaissance CONOPS (Space
            and C\4\ISR) harnesses the integration of manned, unmanned, and
            space systems to provide persistent situation awareness and
            executable decision-quality information to the JFC.
      --Global Mobility CONOPS provides Combatant Commanders with the
            planning, command and control, and operations capabilities to
            enable timely and effective projection, employment, and
            sustainment of U.S. power in support of U.S. global interests--
            precision delivery for operational effect.
      --Global Strike CONOPS employs joint power-projection capabilities to
            engage anti-access and high-value targets, gain access to
            denied battlespace, and maintain battlespace access for
            required joint/coalition follow-on operations.
      --Global Persistent Attack CONOPS provides a spectrum of capabilities
            from major combat to peacekeeping and sustainment operations.
            Global Persistent Attack assumes that once access conditions
            are established (i.e. through Global Strike), there will be a
            need for persistent and sustained operations to maintain air,
            space, and information dominance.
      --Nuclear Response CONOPS provides the deterrent ``umbrella'' under
            which conventional forces operate, and, if deterrence fails,
            avails a scalable response.
        This CONOPS approach has resulted in numerous benefits, providing:
      --Articulation of operational capabilities that will prevail in
            conflicts and avert technological surprises;
      --An operational risk and capabilities-based programmatic decision-
            making focus;
      --Budgeting guidance to the Air Force Major Commands for fulfilling
            capabilities-based solutions to satisfy warfighter
            requirements;
      --Warfighter risk management insights for long-range planning.

    Modernization and Recapitalization
        Through capabilities-based planning, the Air Force will continue to
    invest in our core competency of bringing technology to the warfighter
    that will maintain our technical advantage and update our air and space
    capabilities. The Capabilities Review and Risk Assessment (CRRA)
    process guides these efforts. Replacing an outdated threat-based review
    process that focused on platforms versus current and future warfighting
    effects and capabilities, our extensive two-year assessment identified
    and prioritized critical operational shortfalls we will use to guide
    our investment strategy. These priorities present the most significant
    and immediate Air Force-wide capability objectives.
        We need to field capabilities that allow us to reduce the time
    required to find, fix, track and target fleeting and mobile targets and
    other hostile forces. One system that addresses this operational
    shortfall is the F/A-22 Raptor. In addition to its contributions to
    obtaining and sustaining air dominance, the F/A-22 will allow all
    weather, stealthy, precision strike 24 hours a day, and will counter
    existing and emerging threats, such as advanced surface-to-air
    missiles, cruise missiles, and time sensitive and emerging targets,
    including mobile targets, that our legacy systems cannot. The F/A-22 is
    in low rate initial production and has begun Phase I of its operational
    testing. It is on track for initial operational capability in 2005. A
    complementary capability is provided by the F-35 Joint Strike Fighter,
    providing sustainable, focused CAS and interservice and coalition
    commonality.
        We also recognize that operational shortfalls exist early in the
    kill chain and are applying technologies to fill those gaps. A robust
    command, control, and sensor portfolio combining both space and
    airborne systems, along with seamless real-time communications, will
    provide additional critical capabilities that address this shortfall
    while supporting the Joint Operational Concept of full spectrum
    dominance. Program definition and risk reduction efforts are moving us
    towards C\4\ISR and Battle Management capabilities with shorter cycle
    times. The JFC will be able to respond to fleeting opportunities with
    near-real time information and will be able to bring to bear kill-chain
    assets against the enemy. Additionally, in this world of proliferating
    cruise missile technology, our work on improving our C\4\ISR
    capabilities--including airborne Active Electronically Scanned Array or
    AESA radar technology--could pay large dividends, playing a significant
    role in America's defense against these and other threats. To create
    this robust command and control network, we will need a flexible and
    digital multi-service communications capability. We are well on our way
    in defining the architecture to make it a reality. The capabilities we
    are pursuing directly support the Department's transformational system
    of interoperable joint C\4\ISR.
        There is a need for a globally interconnected capability that
    collects, processes, stores, disseminates, and manages information on
    demand to warfighters, policy makers, and support people. The C\2\
    Constellation, our capstone concept for achieving the integration of
    air and space operations, includes these concepts and the future
    capabilities of the Global Information Grid, Net Centric Enterprise
    Services, Transformational Communications, the Joint Tactical Radio
    System, and airborne Command, Control, and Communication assets, among
    others.
        One of the elements of a sensible strategy to maintain U.S. power
    projection capabilities derives from a global aerial refueling fleet
    that serves Air Force, Navy, Marine Corps and coalition aircraft. Our
    current fleet of aging tankers met the challenges of OEF and OIF but is
    increasingly expensive to maintain. The fleet averages more then 40
    years of age, and the oldest model, the KC-135E, goes back to the
    Eisenhower Administration. Recapitalization for this fleet of over 540
    aerial refueling aircraft will clearly take decades to complete and is
    vital to the foundation and global reach of our Air Force, sister
    services, and coalition partners. The Air Force is committed to an
    acquisition approach for this program that will recapitalize the fleet
    in the most affordable manner possible.
        Capabilities-driven modernization and recapitalization efforts are
    also taking place on our space systems, as we replace constellations of
    satellites and ground systems with next generation capabilities. The
    Evolved Expendable Launch Vehicle has completed six successful
    launches. Using two launch designs, we will continue to seek
    responsive, assured access to space for government systems. Space-Based
    Radar will provide a complementary capability to our portfolio of radar
    and remote sensing systems. We will employ internet protocol networks
    and high-bandwidth lasers in space to transform communications with the
    Transformational Satellite, dramatically increasing connectivity to the
    warfighter. Modernization of GPS and development of the next-generation
    GPS III will enhance navigation capability and increase our resistance
    to jamming. In partnership with NASA and the Department of Commerce, we
    are developing the National Polar-orbiting Operational Environmental
    Satellite System, which offers next-generation meteorological
    capability. Each of these systems supports critical C\4\ISR
    capabilities that give the JFC increased technological and asymmetric
    advantages.
        Space control efforts, enabled by robust space situation awareness,
    will ensure unhampered access to space-based services. Enhanced space
    situation awareness assets will provide the information necessary to
    execute an effective space control strategy. However, we must be
    prepared to deprive an adversary of the benefits of space capabilities
    when American interests and lives are at stake.
        Additional capability does not stem solely from new weapon system
    acquisitions. It results from innovative modernization of our existing
    systems. One example is incorporating a Smart Bomb Rack Assembly and
    the 500 lb. version of the Joint Direct Attack Munition into the
    weapons bay of the B-2. In September of 2003, we demonstrated that the
    B-2 bomber is now able to release up to 80 separately targeted, GPS-
    guided weapons in a single mission. This kind of innovation reduces the
    number of platforms that must penetrate enemy airspace while holding
    numerous enemy targets at risk. The second order consequences run the
    gamut from maintenance to support aircraft.
        We will also address the deficiencies in our infrastructure through
    modernization and recapitalization. Improvements to our air and space
    systems will be limited without improvements in our foundational
    support systems. Deteriorated airfields, hangars, waterlines,
    electrical networks, and air traffic control approach and landing
    systems are just some of the infrastructure elements needing immediate
    attention. Our investment strategy focuses on three simultaneous steps:
    disposing of excess facilities; sustaining our facilities and
    infrastructure; and establishing a sustainable investment program for
    future modernization of our facilities and infrastructure.
        Finally, we need to continue to modernize and recapitalize our
    information technology infrastructure. To leverage our information
    superiority, the Air Force is pursuing a modernization strategy and
    information technology investments, which target a common network
    infrastructure and employ enterprise services and shared capabilities.

    Science and Technology (S&T)
        Our investment in science and technology has and continues to
    underpin our modernization and recapitalization program. Similar to our
    applied-technology acquisition efforts, the Air Force's capability-
    based focus produces an S&T vision that supports the warfighter.
        The Air Force S&T program fosters development of joint warfighting
    capabilities and integrated technologies, consistent with DOD and
    national priorities. We will provide a long-term, stable investment in
    S&T in areas that will immediately benefit existing systems and in
    transformational technologies that will improve tomorrow's Air Force.
    Many Air Force S&T programs, such as directed energy, hypersonics,
    laser-based communications, and the emerging field of nanotechnology,
    show promise for joint warfighting capabilities. Other technology
    areas, such as miniaturization of space platforms and space proximity
    operations, also show promise in the future. Through developments like
    these, the Air Force S&T program will advance joint warfighting
    capabilities and the Air Force vision of an integrated air and space
    force capable of responsive and decisive global engagement.

    Capabilities-Based Acquisition/Transforming Business Practices
        To achieve our vision of a flexible, responsive, and capabilities-
    based expeditionary force, we are transforming how we conceive, plan,
    develop, acquire, and sustain weapons systems. Our Agile Acquisition
    initiative emphasizes speed and credibility; we must deliver what we
    promise--on time and on budget. Our goal is to deliver affordable,
    sustainable capabilities that meet joint warfighters' operational
    needs.
        We continue to improve our acquisition system--breaking down
    organizational barriers, changing work culture through aggressive
    training, and reforming processes with policies that encourage
    innovation and collaboration.
        Already, we are:
      --Realigning our Program Executive Officers (PEOs).--By moving our
            PEOs out of Washington and making them commanders of our
            product centers, we have aligned both acquisition
            accountability and resources under our most experienced general
            officers and acquisition professionals.
      --Creating a culture of innovation.--Because people drive the success
            of our Agile Acquisition initiatives, we will focus on enhanced
            training. Laying the foundation for change, this past year
            16,500 Air Force acquisition professionals, and hundreds of
            personnel from other disciplines, attended training sessions
            underscoring the need for collaboration, innovation, reasonable
            risk management, and a sense of urgency in our approach.
      --Reducing Total Ownership Costs.--With strong support from the
            Secretary of Defense, we will expand the Reduction in Total
            Ownership Cost program with a standard model ensuring that we
            have accurate metrics.
      --Moving technology from the lab to the warfighter quickly.--
            Laboratories must focus on warfighter requirements and
            researchers need to ensure technologies are mature, producible,
            and supportable. Warfighters will work with scientists,
            acquisition experts, and major commands to identify gaps in
            capabilities. With help from Congress, we have matured our
            combat capability document process to fill those gaps. During
            OIF, we approved 37 requests for critically needed systems,
            usually in a matter of days.
      --Tailoring acquisition methods for space systems.--In October 2003,
            we issued a new acquisition policy for space systems that will
            improve acquisitions by tailoring acquisition procedures to the
            unique demands of space systems.
        Transformation of our business processes is not limited to
    acquisition activities. Our Depot Maintenance Strategy and Master Plan
    calls for financial and infrastructure capitalization to ensure Air
    Force hardware is safe and ready to operate across the threat spectrum.
    Our increased funding for depot facilities and equipment modernization
    in fiscal year 2004-09, along with public-private partnerships, will
    result in more responsive support to the JFC. We expect to maximize
    production and throughput of weapon systems and commodities that will
    improve mission capability.
        Our logistics transformation initiative will revolutionize
    logistics processes to improve warfighter support and reduce costs. The
    goal of the Air Force's logistics transformation program, Expeditionary
    Logistics for the 21st Century, is to increase weapon system
    availability by 20 percent with zero cost growth. Our current
    initiatives--depot maintenance transformation, purchasing and supply
    chain management, regionalized intermediate repair, and improved
    logistics command and control--will transform the entire logistics
    enterprise.
        Our depots have put some of these initiatives into place with
    exceptional results. In fiscal year 2003, our depot maintenance teams
    were more productive than planned, exceeding aircraft, engine, and
    commodity production goals and reducing flow days in nearly all areas.
    Implementation of ``lean'' production processes, optimized use of the
    existing workforce, and appropriate funding, all contributed to this
    good news story. In addition, our spares support to the warfighter is
    at record high numbers. In 2003, supply rates and cannibalization rates
    achieved their best performance since fiscal year 1994 and fiscal year
    1995, respectively. Fourteen of twenty aircraft design systems improved
    their mission capable rates over the previous year, with Predator
    unmanned aerial vehicles improving by 11 percent, and B-1 bombers
    achieving the best mission capable and supply rates in its history.
    Thanks to proper funding, fleet consolidation, and transformation
    initiatives, spare parts shortages were reduced to the lowest levels
    recorded across the entire fleet.

    Financing the Fight
        An operating strategy is only as good as its financing strategy.
    And similar to acquisition, logistics, and other support processes, our
    finance capabilities are strong. We are taking deliberate and
    aggressive steps to upgrade our financial decision support capability
    and reduce the cost of delivering financial services. Our focus is on
    support to our airmen, strategic resourcing and cost management, and
    information reliability and integration. The initiatives that will get
    us there include self-service web-based pay and personnel customer
    service, seamless e-commerce for our vendor payment environment,
    budgets that link planning, programming, and execution to capabilities
    and performance, financial statements that produce clean audit opinions
    while providing reliable financial and management information, and
    innovative financing strategies.

                             INTEGRATING OPERATIONS

        The Air Force excels at providing communications, intelligence, air
    mobility, precision strike, and space capabilities that enable joint
    operations. Our airmen integrate these and other capabilities into a
    cohesive system that creates war-winning effects. Integration takes
    place at three levels. At the joint strategic level, integration occurs
    between interagencies and the coalition. Integration also takes place
    within the Air Force at an organizational level. At its most basic
    level, integration takes place at the machine-to-machine level to
    achieve universal information sharing which facilitates true
    integration at every level.
    Integrating Joint, Coalition, and Interagency Operations
        The ever-changing dynamics of global events will drive the need to
    integrate DOD and interagency capabilities and, in most cases, those of
    our coalition partners. Joint solutions are required to produce
    warfighting effects with the speed that the Global War on Terrorism
    demands. Fully integrated operations employ only the right forces and
    capabilities necessary to achieve an objective in the most efficient
    manner. We must also integrate space capabilities for national
    intelligence and warfighting.
        We are pursuing adaptations of our C\2\ organizations and
    capabilities to support this vision. While the Air Force's global C\2\
    structure has remained relatively constant, throughout our 57-year
    history, the demands of a changing geopolitical environment have
    stressed current C\2\ elements beyond their design limits.
        We have conducted an extensive review of our C\2\ structures to
    support the National Security Strategy objectives of assure, dissuade,
    deter, and defeat as well as the SECDEF's Unified Command Plan. We will
    enhance our support for the JFC and our expeditionary posture through a
    new Warfighting Headquarters Construct. This will enable the Numbered
    Air Forces to support Unified Combatant Commanders in a habitual
    supported-supporting relationship. Working with their strategy and
    planning cells on a daily basis will ensure that Air Force capabilities
    are available to the JFC's warfighting staff. This new headquarters
    will provide the Combined Air Operations Center (CAOC) with sufficient
    staff to focus on planning and employment of air, space, and
    information operations throughout the theater.
        We are also adapting the capabilities of our CAOCs. The CAOCs of
    each headquarters will be interconnected with the theater CAOCs, all
    operating 24 hours a day, seven days a week. They will be operated as a
    weapons system, certified and standardized, and have cognizance of the
    entire air and space picture. This reorganization will increase our
    ability to support our Combatant Commanders, reduce redundancies, and
    deliver precise effects to the warfighters. As we near completion of
    the concept development, we will work with the Secretary of Defense and
    the Congress to implement a more streamlined and responsive C\2\
    component for the Combatant Commanders and national leadership.
        Integrated operations also depend on integrated training. We
    continue to advance joint and combined interoperability training with
    our sister services and the nations with which we participate in global
    operations. The Joint National Training Capability (JNTC) will improve
    our opportunities for joint training. The aim of the JNTC is to improve
    each service's ability to work with other services at the tactical
    level and to improve joint planning and execution at the operational
    and strategic levels. The Air Force has integrated live, virtual, and
    constructive training environments into a single training realm using a
    distributed mission operations (DMO) capability. JNTC will use this DMO
    capability to tie live training events with virtual (man-in-the-loop)
    play and constructive simulations. Live training in 2004--on our ranges
    during four Service-conducted major training events--will benefit from
    improved instrumentation and links to other ranges as well as the
    ability to supplement live training with virtual or constructive
    options. These types of integrated training operations reduce overall
    costs to the services while providing us yet another avenue to train
    like we fight.

    Integrating Within the Air Force
        The Air Force is continuing to strengthen and refine our AEF. The
    AEF enables rapid build-up and redeployment of air and space power
    without a lapse in the Air Force's ability to support a Combatant
    Commander's operations. The Air Force provides forces to Combatant
    Commanders according the AEF Presence Policy (AEFPP), the Air Force
    portion of DOD's Joint Presence Policy. There are ten AEFs, and each
    AEF provides a portfolio of capabilities and force modules. At any
    given time, two AEFs are postured to immediately provide these
    capabilities. The other eight are in various stages of rest, training,
    spin-up, or standby. The AEF is how the Air Force organizes, trains,
    equips, and sustains responsive air and space forces to meet defense
    strategy requirements outlined in the Strategic Planning Guidance.
        Within the AEF, Air Force forces are organized and presented to
    Combatant Commanders as Air and Space Expeditionary Task Forces
    (AETFs). They are sized to meet the Combatant Commander's requirements
    and may be provided in one of three forms: as an Air Expeditionary Wing
    (AEW), Group (AEG), and/or Squadron (AES). An AETF may consist of a
    single AEW or AEG, or may consist of multiple AEWs or AEGs and/or as a
    Numbered Expeditionary Air Force. AETFs provide the functional
    capabilities (weapon systems, expeditionary combat support and command
    and control) to achieve desired effects in an integrated joint
    operational environment.
        One of our distinctive Air Force capabilities is Agile Combat
    Support (ACS.) To provide this capability, our expeditionary combat
    support forces--medics, logisticians, engineers, communicators,
    Security Forces, Services, and Contracting, among several others--
    provide a base support system that is highly mobile, flexible, and
    fully integrated with air and space operations. ACS ensures responsive
    expeditionary support to joint operations is achievable within resource
    constraints--from creation of operating locations to provision of
    right-sized forces. An example of this capability is the 86th
    Contingency Response Group (CRG) at Ramstein Air Base, organized,
    trained, and equipped to provide an initial ``Open the Base'' force
    module to meet Combatant Commander requirements. The CRG provides a
    rapid response team to assess operating location suitability and
    defines combat support capabilities needed to establish air
    expeditionary force operating locations.
        Another example of ACS capability is the light and lean
    Expeditionary Medical System (EMEDS) that provides the U.S. military's
    farthest forward care and surgical capability. Air Force medics jump
    into the fight alongside the very first combatants. Whether supporting
    the opening of an air base or performing life saving surgeries, these
    medics bring an extraordinary capability. They carry backpacks with
    reinforced medical equipment, permitting them to perform medical
    operations within minutes of their boots hitting the ground.
    Complementing this expeditionary medical capability is our air
    evacuation system that provides the lifeline for those injured
    personnel not able to return to duty. The other services and our allies
    benefited greatly from this capability in OEF and OIF. The Army and
    Navy are now developing a similar light and lean capability. The
    success of EMEDS is also apparent in the reduction of disease and non-
    battle injuries--the lowest ever in combat.

    Horizontal Machine-to-Machine Integration
        We also strive to increasingly integrate operations at the most
    basic level--electron to electron. Victory belongs to those who can
    collect intelligence, communicate information, and bring capabilities
    to bear first. Executing these complex tasks with accuracy, speed, and
    power requires assured access and the seamless, horizontal integration
    of systems, activities and expertise across all manned, unmanned, and
    space capabilities. Such integration will dramatically shorten the kill
    chain.
        Machine-to-machine integration means giving the warfighter the
    right information at the right time. It facilitates the exchange of
    large amounts of information, providing every machine the information
    it needs about the battlespace and an ability to share that
    information. In the future, we will significantly reduce the persistent
    challenges of having different perspectives or pictures of the
    battlefield. Examples would be to ensure that the A-10 could see the
    same target as the Predator or to guarantee that the F-15 has the same
    intelligence about enemy radars as the Rivet Joint.
        We want a system where information is made available and delivered
    without regard to the source of the information, who analyzed the
    information, or who disseminated the information. It is the end product
    that is important, not the fingers that touch it. The culmination of
    the effort is the cursor over the target. It is an effect we seek, and
    what we will provide.
        The warfighters' future success will depend on Predictive
    Battlespace Awareness (PBA). PBA relies on in-depth study of an
    adversary before hostilities begin in order to anticipate his actions
    to the maximum extent possible. We can then analyze information to
    assess current conditions, exploit opportunities, anticipate future
    actions, and act with a degree of speed and certainty unmatched by our
    adversaries. PBA also relies on the ability of air and space systems to
    integrate information at the machine-to-machine level and produce high-
    fidelity intelligence that results in a cursor over the target. The
    result--integrated operations--is our unique ability to conduct PBA and
    impact the target at the time and place of our choosing. This machine-
    to-machine integration will include a constellation of sensors that
    create a network of information providing joint warfighters the
    information and continuity to see first, understand first, and act
    first.
        The C\2\ Constellation is the Air Force capstone concept for
    achieving the integration of air and space operations. Our vision of
    the C\2\ Constellation is a robust, protected network infrastructure, a
    globally based command and control system to encompass all levels of
    the battle and allow machines to do the integration and fusion. It uses
    Battle Management Command and Control and Connectivity and consists of
    command centers, sensors, and systems like the U-2, Space Based Radar,
    the Distributed Common Ground System, and our CAOCs. Given the C\2\
    Constellation's complexity, the Air Force recognizes the need for an
    architecture to address myriad integration issues--methodically--so all
    elements work in concert.

                        SECURING AMERICA'S NEXT HORIZON

        Armed with the heritage of air and space power in combat, the
    lessons learned from our most recent conflicts, and the powerful
    advances in technology in the 21st century, we stand ready to deliver
    decisive air and space power in support of our nation. Whether called
    to execute a commanding show of force, to enable the joint fight, to
    deliver humanitarian assistance, or to protect our nation from the
    scourge of terrorism, we will deliver the effects required. Our ability
    to consistently answer the call is our dividend to the nation, a result
    of our sustained investment in people, technology, and integration.
        Our portfolio of advantages provides dividends on the battlefield.
    We bring to bear a diversified collection of capabilities, which answer
    the needs of a spectrum of combat and humanitarian operations. As one
    would with any investment, we will monitor, maintain, and adjust our
    investments as needed to reflect the demands of a dynamic environment.
    Transformational initiatives in the way we organize, train, and equip
    reflect such adjustments, changes that will result in significant gains
    for our force, for the joint team, and for our nation. Yet, we will not
    shift our focus from the core competencies that have provided the
    foundation for our success and continue to do so. The success of the
    Air Force resides in the airmen who employ the technology of
    warfighting through integrated operations with our joint and coalition
    partners. This is our heritage and our future. This is America's Air
    Force.

                      STATEMENT OF GENERAL JOHN P. JUMPER

        Senator Stevens. General Jumper.
        General Jumper. Well, I would like to make a statement. Mr.
    Chairman, Senator Inouye, members of the committee, thank you
    for the opportunity to sit here. It's a pleasure to sit here
    with Dr. Roche and to work for a boss who spends so much energy
    caring for our people and helping us all make sure that we do
    the right thing as an Air Force for our Nation.
        I'd also like to thank you, Mr. Chairman, and members of
    the committee, who take the time to go out and see our airmen,
    soldiers, sailors, and marines personally throughout the world
    when they are deployed. It's one thing for me to go out there
    and tell them how important they are. It's much more effective
    when we have the representatives of the people go out and send
    that message. I cannot tell you how important that is, and I
    thank you, sir, for your efforts to do that. I've watched you,
    Mr. Chairman and Senator Inouye, for many years, and I know
    that wherever there's a crisis, you all show up, and usually
    together, and it's a very powerful message that you send.

                         AEROSPACE EXPEDITIONARY FORCE

        Sir, the Air Force, over the last 10 years, has recreated
    itself from a contingent--from a cold war operation coming out
    of the cold war years into a contingency-based operation that
    we work with our Aerospace Expeditionary Forces (AEF). We have
    10 Aerospace Expeditionary Force packages that we actually used
    for the first time in 1999 in the air war over Serbia. But to
    prosecute Operation Enduring Freedom and Operation Iraqi
    Freedom, we had to call 8 of 10 of these packages forward in
    order to completely deal with the situation.
        We opened 36 bases in the process of this. Sixteen of those
    bases continue to be open today. At the height of operations,
    we had over 72,000 American troops and Coalition partners
    living in Air Force tents throughout the ADR. Today, that
    number is about 17,000 at bases where we have support
    responsibilities. We continue to engage across the spectrum of
    conflict, as you know, from the counter-drug mission to
    patrolling the skies over America, to those deployed operations
    that I mentioned.
        We are now in the process of reconstituting our force. It
    will take some time to get us completely reconstituted, but,
    just this month, we've started back in a normal rotation cycle
    with most of our people, even as we have two-plus AEF packages
    still deployed forward, dealing with the Operation Iraqi
    Freedom.
        Sir, even though you know that our AEF packages are serving
    us well, we can't do this, any of it, without a Total Force and
    a joint team effort. Secretary Rumsfeld has challenged us to
    make sure that everyone we have in uniform is doing the job
    that's required of someone in uniform. I can report to you,
    sir, that daily, 47 percent of our active-duty force is
    committed directly to the mission of the combatant commanders
    throughout the world. As you know, we're still flying 150
    sorties a day over Iraq, and some 50 sorties a day over
    Afghanistan, to include mobility sorties, strike sorties, air-
    refueling sorties, intelligence, surveillance, reconnaissance,
    and close air-support missions.
        For our mobility forces, the tempo remains about 50 percent
    above the pre-9/11 activity. We owe the success of these
    mobility missions to the great contribution that we get out of
    our Air National Guard and Air Force Reserve. They make up more
    than 50 percent of this mission-area capability.
        In the skies--or in the Aerospace Expeditionary Force
    packages that we deploy, each one of those packages consists of
    20 to 25 percent of the Air National Guard or the Air Force
    Reserve. We put our Total Force to good use, and it works for
    us very well. In Operation Noble Eagle, patrolling the skies
    over the United States, which we've been doing now for 2\1/2\
    years, over 80 percent of that effort is borne by the Air
    National Guard or the Air Force Reserves.

                               GUARD AND RESERVE

        Since 9/11, we have mobilized some 36 percent of our total
    Guard and Reserve. Today, about 6 percent remain activated,
    mobilized, and serving throughout the world. We integrate the
    Guard and Reserve with our daily activity, as the boss
    mentioned--with blended wings. We have the 116th Air Control
    Wing at Robins Air Force Base, which is our JOINTSTARS unit,
    that is a combination of Air National Guard and Active Duty Air
    Force in the same unit. The command of that unit rotates.
    Today, it happens to be commanded by an Air National Guard
    officer. This is working very well, although we still have work
    to do in trying to get the laws synchronized that will allow us
    to have common judicial standards and other standards. We will
    continue to work with you to get that achieved.
        Again, I want to thank the employers of our Nation who
    allow these Guard and Reserve members to come on active duty
    and to deploy. They, too, serve, because they give up probably
    the most capable part of their work force to come on active
    duty, put on the uniform and deploy, and they do a magnificent
    job for us. So we are very grateful to the employers in all the
    States who allow this to happen.
        As we look to the future, I worry about capabilities that
    we have to deal with. Secretary Roche spoke of the F/A-22,
    which is going to be necessary as we look forward to the threat
    of cruise missiles, as we look forward to new generations of
    surface-to-air missiles that in some places of the world are
    being deployed today, as we look at a new generation of fighter
    aircraft, such as the Su-37.
        Mr. Chairman, today we brought along three members that
    belong to you, sir. These are members of the fighter wing in
    Elmendorf Air Force Base in Anchorage, and I'll ask them to
    stand, Colonel Greg Neubeck, Captain Mark Snowden, and Captain
    Pete Fesler. These three gentlemen are F-15 pilots. They have
    just returned from an exercise in a country we haven't
    exercised with for some years, and they were able to fly their
    F-15s against some of these new fighters that we talk about. We
    can't discuss it here today, but in closed session I'd enjoy
    the opportunity at some point in the future to come and talk to
    you about the results of their trip. I think you would find the
    information very revealing. The Secretary and I are proud to
    bring along these three great young Americans who serve this
    country so well. Thanks, guys.
        Senator Stevens. Welcome gentlemen, and thank you, General.
    They obviously come from the top of the world and have a very
    fine home.
        General Jumper. Yes, sir.
        Senator Stevens. I'm going to have to ask you, General, if
    you can summarize pretty quickly. I've got to tell you that we
    have a vote starting at 10:30. We'll stay here until--or
    11:30----

                            RECRUITING AND RETENTION

        General Jumper [continuing]. I will do that, Mr. Chairman.
        Let me just say that as far as our retention and
    recruiting, we're meeting all of our goals, not only in the
    active, but in the Guard and Reserve, and it's truly a great
    Air Force team.
        Sir, I appreciate the opportunity to sit before you here
    today, and I look forward to your questions.
        Senator Stevens. Thank you very much.
        We do thank you very much. And those are wonderful
    statements.
        Gentlemen, because of the timeframe--I've discussed this
    with Senator Inouye--we'll take 5 minutes each, and then we'll
    see what questions we might have in the second round. We'd urge
    you to keep your responses as short as possible.

                                    TANKERS

        I congratulate you, Secretary Roche, in being willing to
    talk about the tankers. We all have, you know, sort of, lash
    marks across our back because of the fact we tried to
    accelerate the IOC for those tankers. What is the IOC going to
    be under the current situation?
        Dr. Roche. IOC, I don't have it exact in my head. The first
    one will show up--if we do the normal KCX, the first one won't
    show up until 2010, so it'll be a few years after that before
    we have IOC. Had we been able to effect release in the first
    year that it was made available to us by the Congress, we would
    have had something like 80 planes available by 2010, and we
    would have had IOC.
        Senator Stevens. And the average age is somewhere about 43
    years today----
        Dr. Roche. Forty-three years. And, remember, the Secretary
    of Defense has the program in a pause, so it's not that we've
    rejected the lease that the Congress agreed to last time; it's
    in a pause.
        Senator Stevens. Well, the net result is, we delay the IOC,
    and we engender the growth of foreign-constructed tankers to
    meet our needs. I think that we will have done a disservice to
    this country. I hope that--pray to God that we'll solve this
    problem soon. It is just a jurisdictional fight between Members
    of the Senate, as far as I'm concerned. But I do think that
    you've taken too much heat on the subject.

                                 SPACE PROGRAMS

        Let me go to the basic problem of this budget, as I see it.
    You've got budget requests for three Air Force space programs,
    transformational communications, the Evolved Expendable Launch
    Vehicle (EELV) launch--space launch--space-based radar more
    than doubles in fiscal year 2005. Those programs alone would
    grow about additional 30 percent by 2006, and we plan to go
    ahead and move into full-rate production of the F/A-22. Can all
    those programs survive under the trend line of the budget
    today?
        Dr. Roche. We have not been optimistic about the trend line
    and it is one of the reasons that I brought down the production
    rate from 22 to 32 per year, instead of going up to 56. I did
    this in order to smooth things out so we could address other
    subjects.
        The space programs of the United States are old, sir. They,
    too, need to be recapitalized. We don't talk about them as
    often as we probably should. A number of those systems have
    done very well because they have just been built so
    beautifully, but they need to be recapitalized. Space-based
    radar, as a part of a portfolio of sensors that can be used for
    intelligence and for tactical operations, is a necessary thing.
    We believe that, as we see our budget, we can smooth these in.
    Yes, sir.

                                     F/A-22

        Senator Stevens. What's the IOC now for the F/A-22?
        Dr. Roche. It should be the end of calendar year 2005, sir.
        Senator Stevens. Someone asked me the other day why we're
    building the F/A-22. What's the threat?
        Dr. Roche. I would like to meet in a closed session and
    tell you about some of the new aircraft, but certainly there
    are existing surface-to-air missile systems now that, if not
    dealt with by something like the F/A-22, will deny airspace to
    us for land operations, for any other support operations. There
    are emerging threats, like cruise missile threats, that only
    the F/A-22 can handle because of its super-cruise. Its
    capabilities are such that it replaces a number of other
    aircraft. We will become far more efficient in the use of our
    airmen by having far more capable airplanes. We'll have fewer
    of them, but we'll be able to use the crews much more often. So
    it's a combination of the threat, the efficiency, and the move
    into new technology, which enables you to not have to spend the
    kind of funds we have to spend now on maintenance, the fact
    that our F-15 fleet is roughly 22-plus years old, and the F-
    15Es are the young part of that. We have flight restrictions on
    some of our F-15Cs because of some problems in the vertical
    stabilizers.
        Senator Stevens. Well, I thank you. This committee did save
    the C-17. We saved the Predator. We saved the V-22. And as far
    as I'm concerned, we're going to save the F-22.
        Senator Inouye?
        Senator Inouye. Mr. Chairman, I concur with you.
        Mr. Secretary, on the F/A-22, about 20 months ago, you
    added a new, robust air-to-ground capability. And, as such, the
    Secretary of Defense suggested that the cost could go up by
    $11.7 billion over a 10-year period. Has that been factored
    into the budget?
        Dr. Roche. Sir, the Secretary of Defense didn't do it; it
    was the General Accounting Office, if I'm not mistaken, Senator
    Inouye. They took an honest-to-goodness wish list from our Air
    Combat Command that goes until the plane is dead. Now, we're
    going to keep this plane for 30 years, so there will be things
    that one might think of doing 20 years into the future. The
    work that we are doing to make--to enhance the capability of
    this airplane for air to ground--it already has some
    capabilities--will actually, in some cases, save money. We'll
    put a new radar on that's 40 percent cheaper than the existing
    radar. We'll incorporate the smaller-diameter bomb, which will
    be done for lots of other reasons. So the amount of money that
    we have planned that we will actually spend is budgeted, and is
    less than $3.5 billion, and that's for all the aircraft that
    come after it.
        Now, just as a comparison, sir, over the same FYDP period
    we'll invest $2.5 billion in just doing upgrades to the B-2
    bomber. There are only 21 of them.
        Senator Inouye. Has the change made the full-rate
    production decision a little later now? You were going to do it
    in December 2004.
        Dr. Roche. The full production decision for the F/A-22,
    sir, will be, again, a function of how well we do in initial
    operational test and evaluation (IOT&E). We have worked out
    every problem we can think of. We have issues associated with
    IOT&E sortie generation and meantime between maintenance hours
    that are really an attempt to interpolate from what our
    measures after 100,000 hours of flight (which won't happen
    until 2008) to what they ought to be today. We believe that,
    barring something we can't see now, we should enter IOT&E at
    the end of April. That's in 2004. The full-rate production
    decision would be at some point thereafter; again, it will be
    event driven. But we are ramping up slowly, with your help. We
    went to 20 airplanes, 22 airplanes; this budget, 24 airplanes,
    to get to 32 without incurring additional cost by rushing.

                               BOEING CORPORATION

        Senator Inouye. As a result of certain alleged incidents by
    Boeing employees, Senator Rudman was asked to conduct an
    investigation, and, as a result of that, he said that despite
    problems that have occurred, ``We believe it would be both
    unfair and incorrect to conclude that the company treats ethics
    and compliance matters lightly.'' And then he further went on
    to say that, ``Boeing programs are robust and confirm that the
    company pays significant attention to ethics and compliance
    matters.''
        Have these results or findings had any impact on the
    progression of replacing the tanker fleet?
        Dr. Roche. I'm certain that they've been an input to the
    Inspector General's review. There is an Inspector General
    review. There's also a Defense Science Board look, across the
    board. There's a group from the Industrial College of the Armed
    Forces who were looking at, ``How innovative was our approach?
    And what lessons are to be learned?'' We, clearly, can't take
    action based on Senator Rudman's report, but I know that that
    has been an input to the Inspector General's thinking.

                                  END STRENGTH

        Senator Inouye. I believe you're planning to downsize your
    force end strength. How do you propose to do that?
        Dr. Roche. We are, at this point, Senator, a little under,
    sir--about 16,000 over and above our end strength, and it is--
    we're suffering from riches, Senator. We just took stop-loss
    off last July. We had anticipated that our airmen would return
    to the normal sequence, which is: we lose 37,000 a year, we
    recruit 37,000 a year. With a lot that you have done, in terms
    of benefits, 100 percent housing, a whole series of things, we
    are exceeding our retention rates, we have pilots coming back,
    and we finished 40 percent of our recruiting for this fiscal
    year last year. So we're having to see if some of our airmen
    would like to transition earlier into the Guard and Reserve, to
    get on with, maybe, their academic life. We are trying to not
    lose faith with any of these men and women who have had faith
    in us, but they like serving our Air Force, and there is a
    sense of esprit that I know you've seen when you've dealt with
    them over in the Area of Responsibility (AOR). They have a
    sense of self worth, that they're doing something terribly
    important, and they want to stay. We're trying to adjust this
    so maybe we can have more of them migrate to our Guard and
    Reserve.
        John?
        General Jumper. Senator, we do not want to kick anybody out
    of the Air Force that wants to stay. And we lived through--in
    the late 1980s and early 1990s, we lived through involuntary
    separations. It was destructive for the morale of the service.
    We will ask your help to make sure that we don't have to kick
    out anybody that doesn't want to go, even as we try to get down
    to our authorized numbers as quickly as we can.
        Thank you, sir.
        Senator Inouye. Thank you very much.
        Senator Stevens. Senator Dorgan.
        Senator Dorgan. Mr. Chairman, thank you very much.
        First, let me say to the Secretary that I'm really pleased
    that you're not moving over to the Army. I know that was a long
    and tortured period for you, but, frankly, I think you've done
    a wonderful job, and I appreciate your commitment to the United
    States Air Force and to this country's security.

                          BASE REALIGNMENT AND CLOSURE

        Let me ask a question about base closing, if I might. The
    base closing commission proposition that has everyone nervous,
    I expect. And let me ask whether--as you understand it, whether
    this base closing round is going to look at nearly every Air
    Guard and Reserve facility. The reason I ask that question is,
    in the 1995 background only a handful of Air Guard and Air
    Force Reserve facilities were actually evaluated. What's your
    impression of what will happen in this base closing commission
    round?
        Dr. Roche. We really believe in the Total Force. We would
    like everyone to be looked at. We are doing it slightly
    differently. We're doing it in accordance with the
    congressional law and regulation, but we're starting out taking
    that very seriously, in terms of what is the force structure we
    expect to see around 2020-2025. Because we've always noted that
    we'll be replacing 750 F-15-like aircraft with roughly 400 F/A-
    22s. Our Air Force will be getting smaller. What are the
    systems we think we'll need for the contingencies in the
    future? What are those capabilities? Where are they best
    deployed inside the United States? How much overseas basing
    will we have to do? Just go through the capabilities. Then
    we're going to look at things like ranges. As you know,
    supersonic range is a critical to us. Other air ranges are
    critical to us. Then keep working our way down, in terms of
    what kinds of systems tend to be for the Atlantic-Pacific.
    Which are swing systems? How do we deal with Operation Noble
    Eagle?
        We believe as we go through that, plus the work that's
    being done by the joint staff of where is there commonality of
    training, hospitals, other things, that the answer will start
    to come out pretty obviously.
        Guard is working on its own, doing some very innovative
    thinking about how they can better integrate with the Active
    Force, or complement it.
        Senator Dorgan. As you know, my State houses two air bases,
    one at Minot, one at Grand Forks--one B-52, one a tanker base--
    as well as an Air Guard Base in Fargo.
        Dr. Roche. And missiles.

                                      B-52

        Senator Dorgan. And missiles in the Minot base, as well--at
    the Minot base. Let me ask you how you see the role for the B-
    52 and also the role for the core tanker base as we move
    forward.
        Dr. Roche. I can't speak of any specific base with respect
    to the systems.
        Senator Dorgan. Yeah.
        Dr. Roche. We see the B-52 as a system that we fly very
    differently. We fly slower, higher. We picked 90 of the best of
    the 700 that were built. These are the planes that did not
    fight in Vietnam. Some of the tankers that were associated with
    those B-52s are also in good shape, even though they're old,
    and they would be the tankers we would expect to fly when
    they're roughly 70 years old, even if we began recapitalizing
    now. We see the B-52 having a future for the next, say, 10, 20
    years. But we now are looking at how to replace the platform.
        Senator Dorgan. Well, the B-52 is estimated to be out 30
    years, is it not?
        Dr. Roche. It is, and we'll track both the costs of it and
    how many we'll use, how many we'll use for standoff jammers.
    But bomber capabilities are located where they are in the
    United States for very good reasons; it's because they swing.
    Originally, the northern States had them, because we went over
    the top.

                                      B-2

        Now we've found that when we place the B-2, it is wise to
    put a bomber facility in the center of the United States so it
    can swing to the Atlantic or the Pacific. For example, Dyess
    Air Force Base in Texas, just to name one that's not in your
    State, sir, needs ranges nearby. These are important things for
    us to take into account as we look at placement.

                                  TANKER FLEET

        Senator Dorgan. Will your ability to maintain the tanker
    fleet be substantially affected by the 767 issues?
        Dr. Roche. We think that we will not replace the full 550
    KC-135s with 550 new wide-body tankers. We'd like to--it may
    not all be 767s by the time you go over 20-so years to do it,
    but it'll still be, we think, something above 400, sir.

                                  GLOBAL HAWK

        Senator Dorgan. And have you--when will you describe a
    basing plan for the Global Hawk, the full contingent of Global
    Hawks?
        Dr. Roche. Right now--you remember, in Iraq our Global Hawk
    fleet consisted of one airplane.
        General Jumper. That's correct.
        Dr. Roche. And as these come in, we will be trying to do
    that. We have been showing the members as many of our roadmaps
    as we have finished. So we've shown a tanker roadmap, we've
    shown a C-130 roadmap, lifter roadmap. We would continue to do
    that, to share our thinking early with various members.
        In terms of Global Hawk, right now, Beale Air Force Base is
    the right place for them to be, because of their closely
    associated mission with the U-2. Over time, as we use these--
    and there will be other remotely-piloted aircraft, the UAVs--we
    will be picking locations for them.

                                     F/A-22

        Senator Dorgan. Mr. Chairman, let me make one additional
    comment. First of all, I agree with the Chairman's comment
    about the F/A-22. I think that's a critically important weapons
    program for us to maintain air superiority long into the
    future. I think Global Hawk and Predator programs have been
    extraordinarily valuable, and I would commend the Air Force and
    the men and women who run those systems.

                      BASE REALIGNMENT AND CLOSURE (BRAC)

        And then I finally want to say, again, many of us are very,
    very nervous about this base closing commission process. I
    looked to the report that was issued today by the Pentagon.
    It's very hard for us to quite understand exactly where the
    magnifying glass is placed here, but we've got some great
    bases. And I'm not altogether sure, having watched the Pentagon
    plan in the long term, that we know what's going to happen 5
    and 10 years from now with respect to our needs. And to be
    talking about a commission that sizes the military for 20
    years, I'm not all that convinced that we ought to move as
    aggressively as you think, Mr. Secretary, and others in the
    Pentagon think. But, you know, again, I think we'll work
    through that, and I appreciate very much your appearance here
    today.
        Dr. Roche. Thank you for your thoughts. I would say we are
    trying to factor in the fact that we cannot predict the future.
    So we're trying to hedge, and we're trying to hedge in many
    ways.
        Senator Stevens. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman.
        Before this started, I had a chance to talk with the
    Secretary and General Jumper before the hearing, and, it's
    interesting, we were referencing back to the Secretary's time
    when he was here with ``Scoop'' Jackson. I'm looking around the
    committee. You and I and Senator Inouye and, I believe, Senator
    Cochran all served here when Senator Jackson was here. He was
    one of the giants, the real giants, of the Senate, and one who
    did, as you do, Mr. Chairman, formed those bipartisan
    coalitions that are so very, very necessary in these defense
    bills. And I mean that as a compliment to both you and Senator
    Jackson and, of course, to Secretary Roche, who's tried the
    same way; I think one of the reasons why the Air Force is doing
    so well and why it has such support up here. I've also had some
    of these discussions with General Jumper, and we--our
    discussions have ranged everywhere from what it's like growing
    up in small-town America to where the Air Force is going to be
    well into the 21st century with the kind of threats and the
    unpredictability--as you said, Mr. Secretary, the
    unpredictability of the future.
        General Jumper, if I might--this is probably one of those
    rare times that a parochial question has ever come out from a
    member of the Appropriations Committee, but I am the co-chair
    of the U.S. Senate National Guard Caucus, along with Senator
    Kit Bond of Missouri, and we have close to 90 Members of the
    Senate, most of the Senate. We strongly support your effort to
    transform the Guard's and the entire Air Force capability to
    meet the Nation's needs. I think, probably more than any time
    since I've been in the Senate, we see the integration and the
    need of using the Guard with our regular forces, certainly in
    Iraq and Afghanistan, and being prepared in that second, third,
    and fourth wave if we need it.
        I talked with you about a proposal I've been working on
    with the Air National Guard unit in my home State of Vermont,
    the F-16 unit. This F-16 unit, Mr. Chairman, is the one that,
    immediately after--now, by ``immediately,'' I mean immediately
    after--the attack on New York City, in September 11, they were
    flying cover, and flew cover for weeks on end, around the
    clock, over New York City. Flying based out of Vermont, it
    doesn't take them very long to get to New York City. And, of
    course, you had tankers basically parked up there, and they
    just ran around the clock.
        Under our proposal, the Active Force would send many of its
    pilots and maintenance personnel to the Vermont Guard for a
    tour that would increase integration among the Guard and the
    Active Force, allow the Active Force to take advantage of the
    high level of experience we have up there. I understand it
    would actually save money, in the long run. I'd also mention
    that the Burlington area is a very nice place to live, having
    lived there all my life--all my life, so far. It would be a
    great retention tool. And I'm wondering, General, if you'd give
    me an update of where this proposal stands in the Air Force.

                               GUARD AND RESERVE

        General Jumper. Well, Senator Leahy, as you are aware, we
    currently have a great number of initiatives going on with the
    Guard and Reserve especially the Air National Guard, as the
    Secretary mentioned. This notion of bringing active duty and
    National Guard units together is working very well for us in
    Georgia right now. It's only proper we also look at it the
    other way not only consider bringing the Guard and Reserves to
    the active units, but look at it the other way around. As we
    also look at what makes sense with regard to consolidations of
    units that are in close proximity to one another and other such
    ideas that you're aware of that we're actively pursuing in the
    Air Force.
        So, sir, I think that this idea has merit. It is certainly
    worth us considering and taking advantage of the great
    opportunity to live in some of our cities around the world that
    we don't normally have access to. So it's under consideration
    right now, sir.
        Senator Leahy. General, will you or your staff keep me
    posted on how it goes? Because I want to--I really do have a
    very strong interest in this, and not just from a parochial--I
    go to bat for the Vermont Guard, because they do a superb job
    there, always at the top level of preparedness, fitness, and
    all the rest. And I would--I'm a typical enough Vermonter, I
    wouldn't go to bat like that unless they were that good. I just
    think it can work well. I also think that, from our--the east
    coast still is a danger area. I'll put this--other questions in
    the record for both of you.
        But I'm just curious, is this in the budget?
        General Jumper. Sir, this would--as far as I understand it,
    it would have to be a part of a BRAC consideration to talk
    about how we adjust forces if it's in any significant numbers.
    But it's part of the overall consideration, under military
    value, that we are dealing with, as part of that process.
        Dr. Roche. If I may, sir, I think it's a legitimate----
        Senator Stevens. The gentleman's time has expired.
        Senator Leahy. Could I just hear his answer to just that
    one question, Mr. Chairman?
        Dr. Roche. Very briefly. The Guard is looking at a number
    of innovative things, and they're all being listed. And General
    ``Danny'' James is doing a terrific job of working with his
    colleagues to be part of the solution to this problem, not part
    of the problem.
        Senator Stevens. Senator Cochran.

                            COLUMBUS AIR FORCE BASE

        Senator Cochran. Mr. Chairman, thank you.
        Mr. Secretary, General Jumper, I'm fresh back from a trip
    to my State, where I had the pleasure of cutting a ribbon at
    Columbus Air Force Base for a new facility, a radar approach
    control facility, part of a control-tower facility, as well,
    that will be ensuring that we'll have one of the most modern
    training facilities for pilots in the country. We already are
    very proud of the fact that, at Columbus, one-third of the Air
    Force pilots are trained there. Over 468 during fiscal year
    2003. And not long ago, we participated in a ceremony in
    Jackson, where the Air National Guard received the first C-17,
    and training is underway there. We're really proud of the fact
    that that's occurring in our State, as well, and also that
    Keesler Air Force Base continues to train, I guess, as many
    people as any Air Force base training facility anywhere, 40,000
    students each year. We have the largest medical facility,
    medical group in the Air Force--is also located at Keesler Air
    Force Base. So we're very interested in the Air Force's budget
    request. We're very interested in your requirements and helping
    make sure that this committee responds to your needs.

                                      C-17

        I think that it's very clear that you're embarking on some
    important new modernization efforts. The C-17 is one example.
    And we hope that--the procurement schedule, as I understand,
    may be going up from your earlier expectations of your needs.
    Could you tell us what your expectation of a procurement
    schedule is for the C-17? Is your budget sufficient to give you
    what you need?
        Dr. Roche. Senator, we have this multi-year for 60 that
    we're involved in at this time, and that will give us a total
    of 180. There are two things that will drive the follow-on
    decision. One is, the joint staff is looking at what the
    mobility needs are for our Total Force--all Army, Navy, Air
    Force, and Marines--to update what was done a number of years
    ago, in terms of how much lift is required. They will finish
    that at some point here in the not-too-distant future. That
    will then feed into us, in terms of what we need to be able to
    do in million ton miles per day (MTMS/DAY).
        The second issue that we are attempting to resolve is
    whether or not the C-5As can be modernized through the
    Reliability Enhancement and Re-engining Program (RERP). We're
    going to do it for all the B models, which are the newer C-5s.
    We're going to do the avionics for all of the A models. And the
    issue is, if the A's are in good enough shape to be able to
    have service life extension, then that would then compensate.
    If the number of MTMS/DAY required goes up, if the C-5As are
    not worth investing in, then clearly the other thing we'd do is
    get more C-17s. But this is in flux right now. We have an Air
    Force Fleet Viability Board, which is independent, looking at
    the A's, as we speak. We expect that report to come to John and
    me by the end of April, end of the month. We'll start to then
    get a sense of what the condition of the A's are. We're waiting
    for U.S. Transportation Command (USTRANSCOM) to finish with the
    joint staff, its desires for lift. Then, from that, we'll come
    and make a decision on the follow-on procurement. We have a few
    years before we have to get to that.

                                  GLOBAL HAWK

        Senator Cochran. One other procurement item that you
    mentioned was the Global Hawk. You said you were going to ask
    for funds for four of those. That sounds like just a few. Do
    you have any question about the effectiveness or the importance
    of it in the recent Iraqi Operation?
        Dr. Roche. It's four in the budget; it's 34 in the Future
    Years Defense Plan (FYDP).
        Senator Cochran. I see.
        Dr. Roche. And, in fact, as we often point out, General
    Tommy Franks was very kind to John and me. He allowed us to put
    systems into Afghanistan that were really not ready for prime
    time. We had a couple of Global Hawks, as you know, auger in.
    We had a couple of Predators auger in. But we learned so much
    that by the time Iraqi Freedom came, we had terrific
    responsiveness from the Global Hawk. It's done beautifully, and
    we anticipate it being part of our inventory for a great deal
    of time.

                                 AIRBORNE LASER

        Senator Cochran. One of your defensive missile programs is
    the airborne laser program; the primary mission, knocking down
    ballistic missiles during the initial boost phase of flight,
    and using, as I understand it, an Air Force platform for that
    purpose. What is the status of that, and what is the outlook?
    Do you have anything you can tell us about the progress being
    made in that program?
        Dr. Roche. John has had a personal interest for a long
    time, and I'd like to let him answer.
        General Jumper. Sir, we've purchased the first airplane
    that will be the test bed for the laser, and the laser system's
    scheduled to fire on the ground, I believe, by the end of this
    year. Then it will be disassembled, put into the airplane, and
    further tested.
        There have been problems with the airplanes, or with the
    system, as you can imagine, something this complex. When I talk
    to the scientists and engineers that are dealing with this,
    there is still great confidence that this thing is going to
    work. So it's funded appropriately to complete the engineering,
    to do the demonstrations, and to make sure that we are
    successful in what we have done so far, and it will all revolve
    around our ability to get a successful shot out of this thing
    in the next year or so. So I'm very confident, and I appreciate
    your interest in it.
        Dr. Roche. And, as you know, it's in the Missile Defense
    Agency's budget, it's not in ours, sir. We view it like uncles
    looking at it. It's the experiment that ought to be done.
        Senator Cochran. Yeah.
        Dr. Roche. If it works, it's going to be fantastic.
        Senator Cochran. Yeah.
        Thank you, Mr. Chairman.
        Senator Stevens. Senator Durbin.
        Senator Durbin. Thank you very much, Mr. Chairman.
        Secretary Roche, General Jumper, thank you for joining us
    today, and thank you for your service to our country.
        I'd like to ask you another parochial question, which you
    can certainly expect from members of the panel from time to
    time, and it's one of interest to me, as well as Speaker
    Hastert, Congressman Costello, and Congressman Shimkus. In
    fiscal year 2004, Congress provided $12.2 million to continue
    the C-9 mission at Scott Air Force Base for an additional year
    while a study was being completed on the mission of the 932nd
    Airlift Wing. In January, that study was released, and
    concluded that the men and women of the 932nd could meet the
    increased operational support aircraft, (OSA), requirements of
    the Air Force. And I know other studies are going on, but I
    wanted to ask you what your plans are to meet OSA requirements
    since the C-9As are scheduled to retire very soon, in fiscal
    year 2005, and it appears that we've not provided any funding
    to continue the mission. I know you have C-40s on your unfunded
    requirements list, but what do you plan to do between now and
    fiscal year 2007, when the C-40s reach----
        Dr. Roche. I'll ask John to see if my memory is shaky on
    this, Senator. We believe that the C-9's at Scott ought to be
    retired. We'd like to flow the C-9C aircraft from Andrews to
    Scott, and then backfill Andrews with new C-40s. That's the
    plan. We'd like to be able to get that more defined over the
    next couple of years.
        We have found that the medical evacuation planes,
    especially--we have so many other systems that do that well
    that that's not the purpose, but we still need, in the center
    of the country, the kind of capabilities that were contained in
    the C-9 fleet at Scott, and we'd like to maintain it by flowing
    aircraft to Scott from Andrews.

                                     C-40S

        Senator Durbin. Should you receive funding, how many C-40s
    will you acquire, at what cost?
        Dr. Roche. Oh, sir, may I get back to you----
        Senator Durbin. Certainly.
        Dr. Roche [continuing]. For the record?
        [The information follows:]
                                    Secretary of the Air Force,
                                              Washington, May 10, 2004.
    The Honorable Richard J. Durbin,
    United States Senate,
    Washington, DC 20510.
        Dear Senator Durbin: Thank you for your continued support of the
    United States Air Force and particularly the men and women of Scott Air
    Force Base (AFB). During my testimony before the Defense Subcommittee
    on March 23, 2004, you asked me to explain what the Air Force plan is
    for Scott AFB once the C-9s leave.
        The Air Force has identified a requirement for three C-40s at Scott
    AFB IL on our fiscal year 2005 Unfunded Priority List. If funding were
    appropriated for these aircraft, the Air Force Reserve Command's 932d
    Airlift Wing, along with an Associate Active Duty unit, would operate
    them. To facilitate a transition from the C-9A to the C-40, we have
    developed a bridge plan using C-9Cs.
        C-9As would remain at Scott until replaced with C-9Cs from Andrews
    AFB MD. Beginning in fiscal year 2005 the Air Force will transfer C-9Cs
    to Scott AFB. As a C-9C arrives at Scott, a C-9A would retire. The
    intent is to continue to operate at least three C-9s until C-40Cs
    arrive.
        According to the plan, two C-40Cs would deliver in fiscal year 2007
    and one in fiscal year 2008, though we will make every effort to
    deliver the first C-40C in fiscal year 2006. As a C-40C arrives at
    Scott, a C-9C would retire.
        I trust this response clarifies our intent for C-40s and the 932 AW
    mission. On behalf of the men and women of the Air Force, let me convey
    my gratitude for your interest and support.
                Sincerely,
                                                        James G. Roche.

        Should the Air Force receive fiscal year 2005 funding it would
    acquire three C-40C aircraft for Scott AFB, IL.
        Total cost for purchasing and establishing the C-40C operation at
    Scott follows. The cost includes sustaining the current C-9A operation
    at Scott during fiscal year 2005.

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                Fiscal year
                                                                   2005
    ------------------------------------------------------------------------
    Aircraft purchase (3xC-40C).............................           225.0
    C-9A Fiscal Year 2005 Sustainment.......................             8.3
    C-40C Site Activation...................................            12.4
    O&M.....................................................             3.8
    MILCON..................................................             6.0
                                                             ---------------
          Total.............................................           255.5
    ------------------------------------------------------------------------

        Dr. Roche. I believe the number of planes is three, and
    I'm----
        General Jumper. We need to get back to you on that, sir.
        Dr. Roche. Yes, sir.
        Senator Durbin. That's fine.
        When would the Air Force be able to assume the operation
    and maintenance costs for those aircraft?
        General Jumper. For the new C-40s?
        Senator Durbin. Right.
        General Jumper. Sir, I think that once we got them, we'd be
    able to--it would probably be a part of a contract that would
    come with the airplanes, and we'd be able to assume it right
    away.
        Dr. Roche. The beginning of it would be a warranty period.
    There might be some----
        General Jumper. Right.
        Dr. Roche [continuing]. Some contract logistics support,
    because we don't have a big fleet of these. Anything we have a
    big fleet of, we have a strategy to migrate eventual
    maintenance to our depots.
        Senator Durbin. And I want to make sure--maybe you've
    answered this, but I want to make certain I understand it--
    where will the C-40s be stationed, and what unit will they be
    assigned?
        Dr. Roche. They will replace C-9Cs at Scott Air Force Base
    assigned to the 932nd Airlift Wing.
        Senator Durbin. C-40s at Andrews?

                                     C-9AS

        What is the bridge plan, since the C-9As will be retiring
    soon?
        Dr. Roche. To move planes from Andrews to Scott.
        Senator Durbin. Do you know what the cost will be for
    fiscal year 2005?
        Dr. Roche. Sir, I'm sorry, not off the top of my head.
        Senator Durbin. Are there any C-9Cs that are noise
    compliant?
        General Jumper. No, sir, there are not.
        Senator Durbin. What will it take----
        General Jumper. Sir----
        Senator Durbin [continuing]. Will it take to make them----
        General Jumper [continuing]. It's not only noise compliant,
    it's compliant with all the avionics restrictions that are
    coming down the road. I don't have a number, but it would be
    huge. We can get you that number.
        [The information follows:]

        None of our C-9Cs are stage III noise compliant. The Air
    Force plans to primarily use the C-9Cs for CONUS travel, where
    hush kits are not currently required.
        Based on the USMC experience with equipping their two C-9B
    aircraft with hush kits, it would cost approximately $2.5
    million per aircraft. The cost to equip the three C-9Cs and
    spare engines ($2 million) is estimated at approximately $9.5
    million.
        Due to increase weight of the hush kits (approximately 300
    lbs.), the C-9C will experience reduced range and/or reduced
    capacity (cargo and passenger loads).

                               GUARD AND RESERVE

        Senator Durbin. May I ask you another question? Because I
    note that you're not only responsible for the active Air Force,
    but have responsibilities for the Guard and Reserve. What are
    your projections about recruitment and retention for Guard and
    Reserve units, based on current activations?
        Dr. Roche. Yes, sir. We're delighted to answer this one.
    These are fabulous people. Only about 35 percent, or less, of
    our Air National Guard and Air Force Reserve have been
    mobilized in these conflicts. We have something like 6 percent
    mobilized at this time. When we asked them about recruiting,
    because we were worried, and we had a conscious plan after
    Operation Enduring Freedom to make sure that our commands did
    not hold on to guardmen and reservists more than they needed to
    be. We said we had an ethical requirement to return these
    colleagues back to their normal lives. We created the program
    of thanking every single employer. We sent a pin, replicating
    something that was done in World War II, to each employer to
    say, ``Thank you for what you've done for these fighters.''
        Their recruiting seems to be doing fine. Sometimes you
    scratch your head and say these are people who are so dedicated
    and so patriotic that they go through all kinds of family
    disruptions in order to serve their country. They're truly
    wonderful.
        We are also trying to have our excessive active duty
    members, who we can, migrate to the Guard and Reserve to
    complete their obligated service, a program we call Palace
    Chase, which we're thinking of expanding. So we very much worry
    about the Guard and Reserve because we're so dependent on them.
        General Jumper. Right now, sir, we're meeting 100 percent
    of our goals in both Active, Guard, and Reserve, for both
    recruiting and retention.
        Senator Durbin. Mr. Chairman, I would just say, I'm glad to
    hear that. That's great information. It says quite a lot about
    the men and women serving us in the Guard and Reserve, as well
    as our active duty. It is unfortunate, and I hope to change
    soon, the fact that activated Guard and Reserve Federal
    employees don't receive the same type of consideration from
    their employer as many in the private sector.
        Dr. Roche. And the States.
        Senator Durbin. And States. Some States do, some don't.
    But, clearly, we should set an example. Ten percent of the
    Guard and Reserve in America are Federal employees, and, once
    activated, they don't receive the same helping hand that many
    private employers are providing activated Guard and Reserve.
        Dr. Roche. It's a mixed bag, Senator. There are some
    private employers, who, after 2 months, don't support. There
    are others, who are very patriotic, who have borne the cost.
    Every time I find one of them, I thank them. When I find a
    particularly outrageous case of a private employer, I've been
    known to pick up the phone and call the Chief Executive Officer
    (CEO) and have a chat.
        Senator Durbin. Oh, I'm glad you do. I just hope the
    Federal Government will set an example. Thank you.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you very much.
        Gentlemen, we have 10 minutes left, and we're going to set
    a clock for 3 minutes for each one of us to ask questions, if
    you'll agree.
        Let me just make a statement and ask one question. I'm told
    that the tankers flew 6,193 tanking sorties in Iraq alone
    during this past period, and that they've off-loaded over 417
    million pounds of gas to be used in the ground vehicles. That
    shows how critical those tankers are to us. And I do hope that
    we can proceed further.

                                     F/A-22

        My question is, Is it possible, in this open session, to
    talk about the sorties that have been flown by the F/A-22s,
    sorties in this testing period, routinely against adversaries
    like souped-up F-15s? Can you tell us what happened, and give
    us a little description of that?
        Dr. Roche. If I may, just put----
        Senator Stevens. John, can you do that?
        Dr. Roche. 12,000 tanker sorties out of 99,000--12,000 are
    tankers.
        General Jumper. Sir, we've got more than 5,000 hours of
    testing on the F/A-22 airplane now. The guys that are flying
    against it are our very best. And the testimony that comes back
    to me is, ``When we fly against the F/A-22, we never see a
    thing, and we're dead before we know it.'' Like Dr. Roche said,
    we have received testimony from the guy who has been commanding
    our test efforts, and is a seasoned fighter pilot of many
    years. He said, ``If we went to war today, this is the airplane
    I'd want to take.'' It goes on and on. So it's very, very
    positive, sir.
        Senator Stevens. These guys behind you, were they part of
    that group?
        General Jumper. Sir, these are F-15 pilots. There's no
    doubt that they'll be flying F/A-22s someday, and they know
    what the airplane can do. They talk to their buddies, and they
    know what the airplane can do.
        Senator Stevens. Just being a little provincial, I hope you
    stick around. I have asked for a photographer. I'll send a
    picture home with you----
        General Jumper. Yes, sir. You bet.
        Senator Stevens [continuing]. Here.
        Senator Cochran.
        Senator Cochran. Mr. Chairman, I'm curious to know what
    progress we are making in the protection of our aircraft in the
    Iraqi theater. I know there's an infrared laser capability
    that's being developed and tested. Is this an effective defense
    against missiles that are aimed at our aircraft that are in
    tankers and other similar aircraft?

                            MISSILE WARNING RECEIVER

        Dr. Roche. There are a number of levels of protection.
    There's the--we basically have a warning receiver, missile
    warning receiver, that tells you something's shot at you, and
    then you have a countermeasure you deploy. You can have
    difficulties with both. The countermeasures that are the most
    widespread are flares. There's a system called directional
    infrared countermeasures (DIRCM), which is on our special
    operating C-130s. There's a derivative of it, called LAIRCM,
    which is large aircraft infrared countermeasure system. Given
    the fact that there are components of this that are produced by
    a series of companies, there's only so much that can be done in
    a period of time, we are spreading these out over a number of
    our C-17s, C-130s, and Special Operations aircraft. We have a
    classified number now installed. We are doing it in such a way
    that we can put some capability on almost all of our large
    aircraft C-5s, as well. As we get enough of these systems,
    we'll start adding systems to each airplane. They have been
    extensively tested down at White Sands over and over and over.
    They were retested again most recently when we had concerns
    about Iraq. When those systems are installed, the result, so
    far, is they've been very, very effective.

                               SPACE-BASED RADAR

        Senator Cochran. There's also an effort to move forward
    with a space-based radar system. Could you give us a report on
    the status of that?
        Dr. Roche. Yes, sir. It's in its architectural phase. One
    of the issues that we're trying to work out is to--how much
    money do you want to have in the space-based radar part, as
    compared to how much do you want to have in atmospheric
    systems. There are things that space-based radar can do that
    clearly you could otherwise not do--circle the world in a short
    period of time, look deep inside a denied territory. But there
    are certain technical things that can be done by systems like
    JOINTSTARS or the upgrade to JOINTSTARS, called multi-platform
    radar technology insection program (MP-RTIP), which is a module
    improved radar that would go on E-10A command and control
    aircraft, that can do for the ground forces what space-based
    radar cannot do. Therefore, we believe this is a portfolio, and
    the portfolio to have some space-based radar, but we would not
    want to have all our eggs in that basket; you'd want to go
    across, so that you can do both synthetic aperture radar
    imagery, as well as moving target indicators, as well as large
    sweeps of the globe. So it's complementary.

                           JOINT STRIKE FIGHTER (JSF)

        Senator Cochran. The Joint Strike Fighter, multi-role
    fighter, that is under development, I understand the aircraft
    has been experiencing some development problems, the most
    widely publicized having to do with the overall weight of the
    aircraft. You mentioned this. You touched on this in your
    statement. What is the outlook for this program?
        Dr. Roche. The first point I'd like to make, Senator, is
    that this is an airplane. It's one of our complicated
    airplanes. If you look at the history of our aircraft, we
    demand enormous amounts from them, and they are never what the
    viewgraphs say. The JSF is going from the viewgraph stage of an
    airplane to real drawings, real weight measurements, real
    component measurements, en route to being developed. It's only
    completed two of what was originally a 10-year development
    program. Now it's two of an 11-year development program. Weight
    has come up. You would expect that about this time. I can sit
    here and predict what kinds of problems we're going to see in
    2008, because they're natural in the development of these
    systems.
        Is the weight a terminal problem? We don't think so. But
    because it most severely affects the short-takeoff and landing
    airplane, we believe it prudent and right in our
    responsibilities to work that problem soonest, without
    disrupting the program, and to put all the attention on risk
    reduction of the STOVL version. If we can get the weight down,
    more thrust out of the engine, and possibly flying it slightly
    differently; you don't have to keep every constraint the same
    so that it's an effective weapons system, then we would like to
    proceed with the program.
        But we are very attentive to it, especially now that the
    Air Force wants to purchase some of the STOVL units. So we and
    the Marines are joined at the hip on this.
        Senator Cochran. Thank you, Mr. Chairman.
        Senator Stevens. I do hope you'll mobilize, as much as you
    can, the support for the F/A-22. I recall that the B-1, the B-
    2, the 117, C-17, you think of any new system that was right on
    the line of becoming right up to IOC, it's been just attacked
    viciously. But they're always in favor of the systems that are
    over the horizon. Okay? Now, this system is needed, and I hope
    we can get the support we need, here in Congress, to maintain
    it.
        I thank you all for what you're doing, and I do really
    commend you for what we saw when we went into Iraq and
    Afghanistan and Pakistan, and Kuwait. Our generation was
    called--what? The----
        Dr. Roche. The Greatest Generation.
        Senator Stevens [continuing]. Greatest Generation. Well, we
    spawned a greater generation. Those kids that are out there now
    are much better than we ever were, and they're doing a
    wonderful job, men and women now. And, I'll tell you, it's just
    an absolute privilege to be able to visit them. So we thank you
    for giving us a lift over.
        Dr. Roche. I repeat what John Jumper said, these young
    people are thrilled when you take the time in your schedule to
    spend some time with them.
        Senator Stevens. Both Dan and I wish we could be
    reincarnated right now and see some of these systems and be
    able to fly them. You know?
        I did fly the V-22, yes.

                         ADDITIONAL COMMITTEE QUESTIONS

        If there are any additional questions, they will be
    submitted to you for your response.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                   Question Submitted to Hon. James G. Roche
                 Question Submitted by Senator Pete V. Domenici

                             F-117 STEALTH FIGHTER

        Question. The F-117 Stealth Fighter has provided the United States
    with a low-observable first strike capability for nearly 20 years. On
    day-one, hour-one of Operation IRAQI FREEDOM, Stealth Fighters
    delivered precision munitions on an Iraqi leadership target. F-117s
    also struck highly valuable, heavily defended targets during the
    conflict in Serbia. The F-117 has proven itself to be the ``tip of the
    spear'' of America's military might. The fiscal year 2005 Air Force
    budget proposes to reduce 20 percent of the Stealth Fighter force. (10
    of 50 aircraft) It is my understanding that the Air Force has performed
    a risk-analysis of the proposed retirement. I am concerned, however,
    that this Committee has not had sufficient time to review this
    important Air Force decision.
        Given the F-117's proven capability, do you think it might be
    prudent to delay this retirement decision so Congress has more time to
    gather further information?
        Answer. As you well know the F-117 has served our Nation well for
    many years. We believe it is prudent and timely to retire a specific
    portion of them enabling the Air Force to fully support and sustain the
    remaining aircraft and capitalize on other Air Force transformational
    capabilities. Therefore, we would prefer to act now as outlined in the
    fiscal year 2005 President's Budget. As always, we welcome discussion
    on this and other subjects of interest to you.
                                     ______

                 Questions Submitted to General John P. Jumper
                Questions Submitted by Senator Pete. V. Domenici

                             F-117 STEALTH FIGHTER

        Question. The F-117 Stealth Fighter has provided the United States
    with a low-observable first strike capability for nearly 20 years. On
    day-one, hour-one of Operation IRAQI FREEDOM, Stealth Fighters
    delivered precision munitions on an Iraqi leadership target. F-117s
    also struck highly valuable, heavily defended targets during the
    conflict in Serbia. The F-117 has proven itself to be the ``tip of the
    spear'' of America's military might. The fiscal year 2005 Air Force
    budget proposes to reduce 20 percent of the Stealth Fighter force. (10
    of 50 aircraft) It is my understanding that the Air Force has performed
    a risk-analysis of the proposed retirement. I am concerned, however,
    that this Committee has not had sufficient time to review this
    important Air Force decision.
        Given the F-117's proven capability, do you think it might be
    prudent to delay this retirement decision so Congress has more time to
    gather further information?
        Answer. As you well know the F-117 has served our Nation well for
    many years. We believe it is prudent and timely to retire a specific
    portion of them enabling the Air Force to fully support and sustain the
    remaining aircraft and capitalize on other Air Force transformational
    capabilities. Therefore, we would prefer to act now as outlined in the
    fiscal year 2005 President's Budget. As always, we welcome discussion
    on this and other subjects of interest to you.

                           SUPERSONIC TRAINING STUDY

        Question. As you know, the fiscal year 2003 DOD Authorization bill
    began a process of evaluating airspace at Cannon Air Force Base for
    supersonic flight training. The purpose of this study is to provide
    more realistic training for our pilots by allowing them to fly
    supersonic speeds at lower altitudes.
        Can you provide me with an update on the progress of the
    Environmental Impact Study associated with this supersonic training
    initiative?
        Answer. On December 31, 2003, the Air Force began the Environmental
    Impact Statement (EIS) process by having the Notice of Intent published
    in the Federal Register. That was followed by a series of public
    scoping meetings in late January 2004. In December 2004, after
    extensive AF and FAA coordination and review, we expect to publish the
    Draft EIS for public and agency review. Hearings will then be held to
    receive comment on the Draft EIS. A Record of Decision is expected in
    fall 2005.

                              SUBCOMMITTEE RECESS

        Senator Stevens. We're going to reconvene on March 31 to
    consider the President's request for the intelligence
    community.
        Thank you very much.
        [Whereupon, at 11:33 a.m., Wednesday, March 24, the
    subcommittee was recessed, to reconvene at 9 a.m., Wednesday,
    March 31.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            WEDNESDAY, APRIL 7, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:07 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Domenici, Bond, Burns,
    Inouye, Leahy, and Dorgan.

                             DEPARTMENT OF DEFENSE

                             National Guard Bureau

    STATEMENT OF LIEUTENANT GENERAL H. STEVEN BLUM, CHIEF

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Thank you very much, Generals. I am sorry
    to be a little late. We welcome you all so we can review the
    National Guard and Reserve programs.
        There are two panels scheduled this morning, I would say to
    the members of the committee. First, we will hear from the
    National Guard leadership, followed by the leadership of the
    four Reserve forces. Our first panel, obviously, is General
    Steven Blum, the Chief of the National Guard Bureau; Lieutenant
    General Roger Schultz, Director of the Army National Guard;
    Lieutenant General Daniel James, Director of the Air National
    Guard. We thank you gentlemen for joining us this morning.
        There is no question that the Guard and Reserve have been
    asked to perform beyond the normal call of duty and you have
    taken on your missions in Iraq and Afghanistan and elsewhere
    around the world in great fashion. Despite the burden and
    stresses that each of the Guard and Reserve service members
    have had to assume since 9/11, they continue to make
    extraordinary contributions to our Nation's security and we
    thank all of the citizen soldiers that are under your command.
        We have had visits to Iraq, Kuwait, Pakistan, and
    Afghanistan, and we have seen your people in action. We
    congratulate you for what you have done and pledge to you our
    support for what you are going to do in the future.
        Does any member have an opening statement?
        Senator Bond. Mr. Chairman?
        Senator Stevens. Sir.

                    STATEMENT OF SENATOR CHRISTOPHER S. BOND

        Senator Bond. Mr. Chairman, I join with you in welcoming
    the generals and all of the men and women from the National
    Guard. Senator Leahy and I are very proud to be able to work
    with the members of the Guard Caucus and particularly this
    committee in supporting the Guard, whether it is an allocation
    in the National Guard and Reserve Equipment Appropriations
    (NGREA) account or full-time support, additional rotor wing
    aircraft, Army aviation, additional civil support teams, the
    Youth Challenge program, just a few of the important things the
    Guard is doing.
        We understand there are over 170,000 Guard and Reserve
    forces currently activated and almost 40 percent of the force
    in Iraq is composed of Guard and Reserve. I think we have to
    remain diligent to follow up to see that we support the Guard
    and the Reserve as they support us.
        That is why Senator Leahy and I investigated concerns about
    medical holds and housing at Fort Stewart, Georgia. We got the
    response we needed. Soldiers on medical hold are getting better
    care and housing and the Army does not want a repeat of what
    went on at Fort Stewart.
        Right now I am working with a number of people to make sure
    that we get the mail system modernized so that mail can get to
    deployed troops overseas. Majority Leader Frist asked for a
    General Accounting Office (GAO) investigation of the mail
    system and that report is due out the end of April. We are
    hearing that it is going to have some very, very deep concerns
    about the ability to get mail to deployed troops which is very
    important for morale.
        Those of us in the political realm know that it is very
    important that Guard and Reserve who are deployed be able to
    vote. Twenty-nine States, including my State of Missouri and a
    number of other States here, require voting by mail, and if we
    cannot get the absentee ballots to our deployed troops and get
    them back, then they are disenfranchised. In Missouri last
    year, the Secretary of State checked on the 2002 election and
    found that 40 percent--40 percent--of the Missouri military
    deployed abroad who applied for absentee ballots did not get
    their ballots counted. And with much larger numbers deployed
    now, I think it is absolutely imperative. I have spoken to the
    Secretary of Defense, and I hope that the bureaucracy will get
    off its duff and make sure that we develop a mail system that
    can get the mail that our deployed troops deserve to see on a
    regular basis from home and also be able to participate in the
    political process.
        I thank all the members of the Guard. I want specifically
    to recognize Sergeant 1st Class Stephanie Leonard. She is a
    citizen soldier committed to supporting the community and the
    Nation's military, an excellent example, the first Bronze Star
    female winner in the Missouri National Guard. Sergeant, thank
    you very much for being with us.
        Thank you, Mr. Chairman.
        Senator Stevens. While we are recognizing constituents,
    Senator, let me point out that the students in the back of the
    room are from the Colony High School Closeup group from Palmer,
    Alaska. They have come 4,500 miles to be with you this morning.
        That is where they grow all those big pumpkins and big
    squash and things like that.
        Does any other Senator wish to make an opening statement?
        Senator Cochran. I would just ask, Mr. Chairman, to have my
    statement printed in the record. I join you in welcoming our
    witnesses and thank them for their service and their
    leadership.
        Senator Stevens. Thank you very much, Senator.
        [The statement follows:]

                   Prepared Statement of Senator Thad Cochran

        Mr. Chairman, I am pleased to join you in welcoming our
    witnesses this morning.
        This year has been a huge challenge for our National Guard
    and Reserve forces and their response has been very impressive.
    An unprecedented number of Guard and Reserve are on active
    duty, serving in Iraq, Afghanistan and in the Global War on
    terrorism. Two Army reservists from my state of Mississippi
    have paid the ultimate price in Iraq. Today, as the Guard and
    Reserve serve in the air, on land and sea throughout the
    spectrum of warfare they can be assured we are committed to
    ensuring they have all the equipment and training necessary to
    succeed, and to return home safely as soon as possible.
        I would like to thank the witnesses, and the men and women
    they represent, for their service and their leadership. I look
    forward to hearing their testimony.

        Senator Burns. Mr. Chairman, could I have my statement also
    admitted to the record? We would like to hear from our
    witnesses this morning. Also, congratulations on a great job
    done by our citizen soldiers. Thank you very much.
        Senator Stevens. Thank you.
        [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.
        Our men and women of the Guard and Reserve have performed
    nobly since 9/11 and in their current operations in Iraq and
    Afghanistan--the Global War on Terrorism and Operation Iraqi
    Freedom. The Guard and Reserve have certainly seen an increased
    operations tempo over the past few years and have been working
    side-by-side with the Active Component regularly. I worry that
    their equipment may be behind the current technologies or may
    not be compatible. Older equipment is expensive to operate and
    maintain, due to lack of availability of spares and increased
    failure rates. We must make sure the outdated cold war policy
    of fielding the newest equipment to our active forces first,
    and cascading the older equipment to the Guard and Reserve
    forces has changed.
        The Guard and Reserve force represents one that is
    extremely skilled and capable, responding to various missions
    across this nation and across the world. They show flexibility
    and rapid response as they continue to play very important
    roles in the protection of our homeland and warfighting
    operations overseas.
        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, then come home to their loved
    ones safely.
        Again, thank you for coming this morning. I look forward to
    today's testimony today and the discussion that takes place.
        Thank you.

        Senator Stevens. Senator Leahy.

                     STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you, Mr. Chairman. I want to welcome
    the witnesses here too, General Schultz and General Blum and
    General James. I have worked with all three of them. I know
    what a superb job they do. I think we have a great leadership
    team in place at the Guard Bureau.
        But, Mr. Chairman, you and Senator Inouye have been a great
    help. Senator Bond mentioned the fact that we lead the National
    Guard Caucus. This has been a joy not only because of my
    personal friendship and admiration of Senator Bond, but because
    of the men and women we represent. I think all the members of
    the caucus would agree in thanking you for the leadership you
    have given. Your subcommittee, yours and Senator Inouye's
    subcommittee, was the engine for launching two major
    initiatives that will significantly strengthen the Guard,
    including the TRICARE program and a significant increase in
    equipment funding. It made the Guard a priority. You have
    marshalled help through critical appropriations. Your own staff
    is superb in these areas.
        While we are mentioning folks from home, I would like to
    mention Sergeant Cara Krauss, who is sitting behind the
    Generals. The sergeant is a member of the Vermont National
    Guard. She just returned from Afghanistan. And, Sergeant, we
    are delighted to have you here.
        I am very proud of her. I am very proud of all the members
    of the Vermont Guard who served with great distinction in
    Bosnia, Iraq, and Afghanistan, along with the Texas Guard and
    along with the Missouri Guard and all the others.
        Not surprisingly, Mr. Chairman, she was telling me this
    morning that there are a couple big differences here. One, it
    is a lot easier walking around without having to wear all the
    body armor that is necessary in those places, and it is kind of
    nice to walk into stores and be back in the United States of
    America where things are a lot more familiar.
        But we have three Guard members here, and of course, so
    many others throughout the place. If it was not for our Guard
    and Reserves, we could not be carrying out our missions around
    the world and we would not have the United States well
    represented. So thank you, and thank you and Senator Inouye
    again for all the support you have given.
        Senator Stevens. Thank you, Senator.
        I have been out to Bethesda and to Walter Reed, and each
    time I was out there visiting with some of the military who
    have come back, I think you would be surprised to know each
    time I was asked, will you help me go back. That is a spirit
    that just grabs me. It just grabs me. It is really wonderful to
    be with those people.
        Our co-chairman has arrived. Senator Inouye.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. If I may, I would like to join all of you
    in welcoming our Reserves and their chiefs and to thank and
    commend them and their men and women for their demonstration of
    citizenship and courage. We admire them, sir. Thank you very
    much.
        May I ask that the rest of my statement be made part of the
    record?
        Senator Stevens. All of your statements will be printed in
    the record in full.
        [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
    Cotton, General McCarthy, and General Sherrard of the Reserves.
        Since this will be General Sherrard's last appearance
    before this Committee, I would like to take the opportunity to
    thank him for his dedicated service to the Air Force.
        General, as chief, you commanded the Air Force Reserve
    during a time of unprecedented mobilizations, including Kosovo,
    Operation Noble Eagle, Operation Enduring Freedom, and
    Operation Iraqi Freedom.
        During your tenure in the Reserves you have also had a
    distinguished career as a command pilot with more than 5,000
    flying hours, commander of an Air Force Reserve group, two
    wings and two numbered air forces, and finally five years as
    chief of the Air Force Reserve.
        General, we thank you for your loyal service.
        Gentlemen, when I think of our Reserves, I think about your
    long history as citizen soldiers, the minutemen in the
    Revolutionary War, the militia that put down riots when our
    nation was in infancy, and our Guard that responds to natural
    disasters and emergencies, and ensured minority children were
    safely admitted into public schools. But things are different
    now. Today our Guard and Reserves make up 38 percent of our
    force in Operation Iraqi Freedom.
        Since September 11th, 282,896 of our Guard and Reserve
    personnel have been called to active duty, and 25,151 have been
    called upon more than once.
        I would like to commend everyone that has played a role in
    these operations. Time and time again, the extraordinary
    ability of our men and women in uniform and all the people that
    work to support them has been demonstrated.
        But, these ongoing operations have strained our troops.
    Numerous concerns such as recruiting and retention, benefits,
    pay equity, and force structure requirements continue to be
    raised by our military forces in the field. This committee also
    remains concerned over the longstanding issues of procuring
    sufficient weapons and equipment to support our Guard and
    Reserve forces.
        Gentlemen, the challenge you face is how to separate the
    identities of our Active and Reserve components, but ensuring
    equity in their treatment.
        I hope you will be able to address some of these concerns
    that are so important to our Guardsmen and Reservists and their
    families today.
        Mr. Chairman, I commend you for holding this hearing and
    look forward to hearing the testimony of our witnesses.

        Senator Stevens. All of your statements and the statements
    of the next panel will be printed in the record in full. I
    would appreciate it if you would summarize it. We would call on
    you first, General Blum.
        General Blum. Well, thank you, Mr. Chairman, and thank you,
    other members of the committee, for the opportunity to appear
    here this morning.
        As was stated in some of your opening remarks, as we sit
    here this morning, there are 144,000-plus citizen soldiers and
    airmen deployed all around the world that are engaged in the
    global war on terrorism and defending our homeland both here at
    home and abroad.
        Your National Guard has become critically essential to the
    defense, security and safety of our States and of our Nation.
    The National Guard has always been an operational reserve when
    it has answered the calls of the Governors and the President
    here at home. As a Federal reserve component of our Army and
    Air Force, we are transitioning from a strategic reserve that
    was once held in reserve for World War III to an operational
    force that is needed each and every day as our Army and our Air
    Force execute their missions around the world.
        This is a resource, manpower, and organizationally
    intensive undertaking that will have to happen on a very
    compressed time line if we are going to make it happen to meet
    the needs of our Nation. The National Guard and Reserve
    equipment account has been and will remain extraordinarily
    useful and vital in these initiatives.
        I am proud to report to you that your National Guard has
    answered every call, met every requirement, and accomplished
    every mission it has been asked to do.
        We are committed to transformation. We are transforming the
    Guard into a more joint and effective organization from top to
    bottom. We are improving readiness across the full spectrum of
    requirements from the full scale warfight overseas to the
    myriad homeland defense, support to homeland security
    operations and State traditional missions.
        We are providing better predictability to our soldiers, to
    our airmen, to their families, and to our employers. We are
    meeting the needs of our elected leaders and our uniformed and
    State and Federal leaders, and we are meeting the mandate to
    seamlessly operate in a State and Federal intergovernmental,
    interagency, joint and multinational role. Your National Guard
    is focusing on the right force mix with the right kinds of
    units, with the right kinds of capabilities distributed to each
    State and territory.
        We are transforming, along with the Army and the Air Force,
    and we are full partners in that transformation. It is now
    recognized that there are 18 divisions in the United States
    Army, 8 of which are assigned to the Army National Guard. There
    will be 82 brigade combat teams in the United States Army; 34
    of these will be assigned to the Army National Guard. The
    National Guard will convert units overtaken by technology or
    strategic and tactical needs to those capabilities that our
    country needs for today and tomorrow. We will eliminate
    nonessential and under-resourced force structure because it
    does not provide us the capabilities we need today or that
    which we will need in the future. We will move to a more
    modular, plug-and-play capabilities-based force which is
    manned, equipped, trained, and resourced like its active
    component.
        Partnering with our active components and the Reserves, we
    will create a true total force. Nationwide, we are rebalancing
    and leveraging the Army and Air National Guard formations.
    Transformation and modularity are both very good for the
    National Guard. It will enhance our readiness. It will increase
    our flexibility, agility and our ability to respond to today's
    reality and tomorrow's threats both here at home and abroad. We
    are taking on these transformations with the assistance and the
    full collaboration and inclusion of all stakeholders, the
    Governors, their Adjutants General, the services, the
    Department of Defense, and you, sir, and the United States
    Congress. Your National Guard is committed to doing what is
    right for America.

                              PREPARED STATEMENTS

        I look forward to your questions. Thank you.
        Senator Stevens. Thank you very much, General.
        [The statements follow:]

             Prepared Statement of Lieutenant General H Steven Blum

                     NATIONAL GUARD 2005 POSTURE STATEMENT
                     PROTECTING AMERICA AT HOME AND ABROAD

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

                                  IN MEMORIAM
        A Dedication to the men and women of the Army and the Air National
    Guard who made the ultimate sacrifice while serving the United States
    of America.

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

                                    OVERVIEW

        At no time in our history has America depended more on its Citizen-
    Soldiers. The strength of our National Guard, as always, is derived
    from the caliber of our Soldiers and Airmen. When we think about what
    our nation asks these young Citizen-Soldiers and Airmen to do for their
    communities, their states, and their nation, and how magnificently they
    have performed here at home and abroad, our hearts are filled with
    pride.
        Our priorities and our vision focuses on leveraging the talents,
    the abilities, the selfless commitment and the enthusiasm of these
    Soldiers and Airmen. As Chief of the National Guard Bureau, my mission
    is to ensure that they receive the latest training, complete and modern
    equipment, and an organizational and command structure worthy of their
    mission and their service.
        The National Guard will remain, first and foremost, a provider of
    ready, trained, and equipped warfighting units to combatant commanders
    through the Army and the Air Force. Notably, the Guard has always been,
    throughout its history, a force that spanned the continuum of what we
    define today as ``Homeland Security,'' ``Homeland Defense,'' and
    ``Warfighting.'' September 11, 2001 has refocused us on our fundamental
    responsibility to defend the homeland--the original mission of the
    militia--and revealed the present day efficacy that the founders
    understood so well--that a citizen-based militia is the best force to
    protect the citizenry from which it is drawn.
        The Guard is uniquely suited, like no other entity in the Defense
    Department, or indeed in the entire nation, to carry out that mission.
    No other organization has our combination of size, skills, training and
    experience, dispersion across the nation, command and communications
    infrastructure, and the legal flexibility to support civil authorities
    at a moment's notice. In nearly 3,000 communities around the nation,
    the Guard stands ready today--as it has since Jamestown was settled
    nearly 400 years ago.

                             SUPPORT THE WAR FIGHT

    Anytime, Anywhere
        We, the Guard, must provide the kind of forces that America needs,
    when America needs them.
        One of Secretary Rumsfeld's key mandates to the Services is to find
    ways to make the National Guard more ready and accessible in its
    federal warfighting role. Working in conjunction with the Army and
    Joint Forces Command, our goal is to dramatically improve the current
    mobilization and demobilization process. Under current guidelines, it
    can take several weeks to months to prepare an Army National Guard unit
    to mobilize and deploy--compared to the Air Guard model where units
    deploy in a matter of hours or days.
        We need to study and adapt the Air Guard model where possible.
        We are working with the Army to change its go-to-war protocols. It
    is no longer practical to follow cold war regimens of train, alert,
    mobilize, train, certify, deploy. We must move to train, alert, deploy.
    By updating home station facilities, taking advantage of new
    technologies, and funding units at a higher level of readiness, we hope
    to create a new 21st century minuteman. The Guard must and will
    continue to operate across the full spectrum of national security
    missions. But, new asymmetrical threats call for a different kind of
    warfighter and different mission systems. We need to be smarter,
    lighter, more agile, and more lethal.
        The National Guard force structure does not stand alone unto
    itself, but rather represents a 38 percent slice of the total Army and
    approximately 34 percent of the total Air Force. As ongoing operations
    abroad reveal the need to rebalance the types of units in the Army and
    the Air Force, the Guard will be a leader in embracing this change.
    Likewise, if studies indicate that Army divisions or Air Force wings
    are no longer needed, it is our view that we, like the active component
    and reserves, must change. We are working closely with the Army as we
    move to a balanced, modular force. Similarly, through Vanguard, we are
    working with the Air Force to meet the aerospace needs of the future.

                                HOMELAND DEFENSE

    Here and Abroad for over 365 Years
        We are this country's longest lasting, longest serving military
    organization; we predate our nation. Today, the National Guard is ready
    to write a brand new page in its long and heroic history, and get the
    mission accomplished.
        When you call out the National Guard, you call out America's joint
    home team.
        The Guard was there when it was needed, demonstrating the flexible
    accessibility inherent in the unique multi-status roles of the Guard.
    Our Homeland Defense and Security roles mandate that we be capable of
    seamlessly operating in federal and state intergovernmental and
    interagency roles. September 11th and its aftermath are illustrative of
    the Guard's new operating environment and its unique flexibility to
    respond to our nation's needs.
        Within 24 hours of the attack on the World Trade Center, 8,500 New
    York Army and Air National Guardmembers were on the streets of New York
    in State Active Duty status. Within 72 hours of President Bush's
    request to the Governors, Guardmembers were assisting civil authorities
    in protecting U.S. airports (USC Title 32 status). As security of our
    skies became paramount after September 11th, the Air National Guard
    logged more than 30,000 incident free, fully armed combat air patrol
    missions (USC Title 10 status) over the United States.
        Congress funded the formation of joint Weapons of Mass Destruction
    Civil Support Teams within the National Guard beginning in 1999. These
    units were designed to provide direct assistance to civilian emergency
    responders in the event of a chemical, biological, nuclear or
    radiological attack upon the homeland. Few in numbers and still in
    their operational infancy in 2001, nevertheless it was one of these
    units--New York's 2nd Civil Support Team--that became the first
    organized unit of any military service or component to arrive on Ground
    Zero on the morning of September 11th, sampling the air to ensure that
    no biological or chemical contaminants were present.
        Since September 11th, National Guard Weapons of Mass Destruction
    Civil Support Teams operate daily in communities throughout the nation.
    They are in a unique position to provide emergency community response
    with full communications capability to the local, state and federal
    levels. Moreover, they are actively involved in planning and
    integration of Guard assets in local and state emergency plans.
        Currently, we have 32 fully certified Weapons of Mass Destruction
    Civil Support Teams. Congress recognized the urgent need to expand that
    number, and 23 teams are scheduled to stand up in the next four years,
    beginning with 12 this year alone. The Guard has initiated several
    dramatic new programs that will further increase and improve our
    Homeland Defense capability, while at the same time enhancing our
    ability as warfighters.
        We are actively pursuing the following initiatives:
      --Organizing 12 Enhanced Response Force Packages. These forces will
            consist of a National Guard Civil Support Team, an enhanced
            division medical company with a 150-person per hour
            decontamination and treatment capability, an enhanced engineer
            company with specialized search and recovery equipment, and a
            task-trained combat unit capable of supporting law enforcement.
            These force packages will meet a previously identified Northern
            Command request for capabilities.
      --Expanding National Guard involvement in Ground-based Mid-course
            Missile Defense, Cyber and Information Operations, Space, and
            Intelligence Operations for both the Army and Air Guard. One
            model we hope to emulate is the Guard's highly successful
            experience in manning Nike missile batteries in the 1960s and
            1970s. At that time, traditional and full-time Guardsmen served
            together in units under State control, with self-activating
            orders that automatically brought them into a Federal status
            when the enemy attacked.
      --Creating National Guard Reaction Forces through dual missioning and
            training of existing units. These units will be immediately
            available to State and Federal governments and for Homeland
            Security purposes. They are already forward deployed throughout
            the United States. The units will retain full war fight and
            homeland security capabilities. These forces will also meet a
            previously identified Northern Command request for forces
            requirement.
        We are expanding our interagency and intergovernmental efforts and
    look forward to increased cooperation between the National Guard, the
    states and the Departments of Homeland Security and Defense. We are
    participating in exercises and planning at state and local levels, and
    we have shared our Automated Exercise and Assessment System with them.
    We are working with the national emergency responder and management
    associations as well.
        The National Guard has a significant number of units capable of
    ``dual-use''--that is to say, the combat skill sets in these units are
    directly applicable to peacetime domestic support operations. We have
    developed a force management model that will help us to ensure that
    sufficient appropriate forces, properly resourced are available to the
    Governors for State, Homeland Defense and support to Homeland Security
    missions.
        We will leverage the units, training and resources in our existing
    war fight capabilities to expand and enhance the roles we can perform
    in homeland security. We will make smarter use of force structure and
    make minor modifications to mission essential task lists to
    geometrically increase capabilities. We will provide homeland defense
    capabilities in force packages, built from standardized warfighting
    units. By doing this in our role as a state military force, we will
    raise the threshold at which commitment of federal military resources
    to non-warfighting tasks becomes necessary.

                      TRANSFORMATION FOR THE 21ST CENTURY

    Relevant, Reliable, Ready and Accessible
        Transformation is a state of mind. It is about how we think,
    organize and approach the future. We are transforming our headquarters
    and our capabilities to shape our future. We reorganized the National
    Guard Bureau from three separate organizations into a joint
    organization effective July 1, 2003. We streamlined and flattened the
    organization, making it more efficient, capable, and aligned its staff
    functions and responsibilities with those of the Joint Staff and the
    combatant commanders.
        We have undertaken aggressive employer and family programs. The
    three-legged stool of the Guard and Reserve--Service member, family,
    and employer--is only as sturdy as the weakest leg. We are talking with
    the nation's major employers and the states are aggressively doing the
    same with employers in their area. Our family program was the model on
    which the entire Department of Defense program was based, and we
    continue to work to address the information, emotional and support
    needs of our families. To that end, I have authorized a position in
    each state to specifically deal with employer support.
        The State Adjutants General consolidated 162 State headquarters
    organizations into 54 doctrinally aligned Standing Joint Force
    Headquarters--creating, effective in October 2003, a single joint force
    headquarters in each state for all Army and Air Guard activities. This
    will ensure a rapid and coordinated response to any emergency, making
    the National Guard more versatile, relevant, and able to meet our
    national security challenges.
        Our joint team will become seamless with the other five services--
    the Army, Navy, Air Force, Marine Corps, and the Coast Guard--and their
    reserve components as well. It will be capable of meeting active
    component requirements and serving as an integrator for active
    component and reserve component consequence management operations.
    Together with our sister services, we will fight and win this war on
    terrorism both here at home and abroad.
        Readiness is a product of resources and training. We must focus our
    training on the myriad missions we will be asked to perform, and we--
    the National Guard Bureau--must obtain the resources necessary for the
    Soldiers and Airmen to accomplish the mission.
        Some of the changes contemplated will require the cooperation of
    Congress in amending existing law.
        Because of its increased relevance, the National Guard Bureau
    should be organized so that the senior officer of the Army and the Air
    National Guard of the United States on duty with the National Guard
    Bureau should become the Acting Chief if the office is vacant or if the
    Chief is absent or disabled. This change is necessary because of the
    elevation of the Directors of the Army and Air National Guard to
    Lieutenant General, without a concomitant promotion of the Vice Chief
    of the National Guard Bureau. Similarly, the Vice Chief of the National
    Guard Bureau should become the Director of the Joint Staff of the
    National Guard Bureau. This designation reflects the roles and
    functions of this individual within the National Guard Bureau's joint
    organization.

                                   CONCLUSION

        We are transforming the Guard in all domains--the way we fight, the
    way we do business, and the way we work with others--to provide the
    Guard America needs today and tomorrow.
        Training must produce enhanced readiness, immediate accessibility,
    and individual and unit capability to conduct operations at home and
    abroad.
        We have approached our transformation in an open, collegial manner,
    talking with all affected stakeholders including the Governors and
    working as a team--Adjutants General, National Guard Bureau, Army, Air
    Force, Office of the Secretary of Defense, the Joint Staff and others--
    to do what is right for America.
        As we look forward to the new fiscal year, the National Guard is
    enthusiastically engaged in planning, programming, and executing the
    extraordinary changes that are ahead. We are evolving in ways that will
    allow us to accomplish our state and federal missions more efficiently
    than ever before, as we design mechanisms to seamlessly operate in the
    Defense Department, interagency, and intergovernmental environments.
        The National Guard will continue to defend our nation, both at home
    and abroad, in both its state and federal capacities, as it has for 367
    years. It will continue to serve as the reserve component without peer
    in the world. This is our birthright--it is the legacy of the
    Minuteman.
                                     ______

           Prepared Statement of Lieutenant General Roger C. Schultz

                                    OVERVIEW

        The Army National Guard stands with the Active Component as we wage
    war against the purveyors of global terrorism. Today, Soldiers in the
    Army National Guard have answered the call of the nation and are
    serving across the nation and the world. The Army National Guard, as an
    integral part of the U.S. Army, is transforming itself to better
    prosecute the Global War on Terrorism while remaining a ready and
    relevant force that is prepared to defend our homeland.
        The Posture Statement provides the Army National Guard an
    opportunity to share with Congress what we have done in the past year
    and where we are heading in the future. The Army Directorate in the
    National Guard Bureau is responsible for how the Army National Guard
    supports the Soldiers, their families, and their employers in
    communities throughout the United States. Our Soldiers come from every
    state, territory, and segment of society, and we recognize that we
    support and are supported by those around us. The Army National Guard
    is a community-based military organization and, as such, we are
    prepared to assist our cities and towns in times of natural or man-made
    disaster. Army National Guard Soldiers are Citizen-Soldiers, and we
    recognize that we must fulfill dual roles as ordinary citizens and as
    members of the Armed Forces of the United States.
        As the Army National Guard continues to protect our nation, the
    Chief, National Guard Bureau, has identified three priorities for the
    Army National Guard that will nurture this responsibility: Support the
    War Fight, Homeland Defense, and Transformation for the 21st Century.
    As our enemies seek ways to wage their war of terrorism in the United
    States and around the world, we are and must remain ready. The Army
    National Guard has proven itself capable of securing our borders while
    simultaneously carrying out a variety of missions across the globe. Our
    goals are to maximize our ability to support our Soldiers, protect our
    nation, and support the warfighters by providing a trained and ready
    force.
        It cannot be stressed enough that the Army National Guard has an
    increased and more vital role in the U.S. Army than ever before. The
    U.S. Army is at the forefront of the conflict in Afghanistan and Iraq.
    As Reserve Components of the Army continue to deploy at increasing
    rates, the Army National Guard joins the Army in its objectives to
    remain ready and relevant in the midst of a war where our enemy is
    elusive. We are transforming ourselves into a more flexible,
    responsive, and capabilities-based force that is able to seamlessly
    integrate into the larger Army. As the Army transforms itself from the
    Current Force to the Future Force, so will the Army National Guard.
        The Army National Guard is ready for every challenge both here at
    home and abroad. We are not and cannot be complacent. The support we
    receive from our citizens, families, employers, and legislatures is
    invaluable. Our Constitution charges us to defend America, and we will
    do this with the same dedication and steadfast purpose as we have done
    for nearly 400 years.

                             SUPPORT THE WAR FIGHT

    The Guard Overseas
        Not since World War II have so many Soldiers been activated for
    wars. The Army National Guard demonstrated its responsiveness by
    providing ready units in support of numerous overseas missions
    throughout 2003. These missions ranged from combat operations to Post-
    Hostility and Stability Operations. At the close of the year, 75,000
    National Guardsmen were on active duty serving overseas. The year began
    with our Soldiers fighting in Afghanistan and ended with Soldiers from
    the Vermont and Oklahoma National Guard training the Afghanistan
    National Army. There are just over 4,000 Soldiers in Afghanistan today.
    The war in Iraq required the activation of 69,380 Soldiers and there
    are just under 60,000 serving there today. The war in Iraq and in
    Afghanistan exacted a toll on our most precious resource, the Soldier.
    Understandably and regrettably there have been 60 Soldiers who have
    lost their lives fighting these two campaigns. The war in Iraq saw the
    activation of brigade size units, Attack Aviation Battalions, Combat
    Engineers, and Military Police. The Army has plans to schedule several
    more brigades and potentially a Division Headquarters for future
    rotations. Most Soldiers that were activated for the war served an
    average of 18 months, with 12 months of duty in Iraq. Related to the
    two overseas wars has been a demand on our Military Police units to
    guard the enemy Prisoners of War in Cuba. In addition to the direct
    role in the overseas wars, the National Guard remains the Army's
    primary force conducting operations in Kosovo, Bosnia, and the Sinai.
    Just under 6,000 National Guardsmen are there today. What were once
    active duty missions are now principally missions of the Guard.
        There are two other noteworthy events for the Guard's overseas
    duty. The Army National Guard was given the mission to protect ships in
    transit to the Persian Gulf, and we also provided 9,000 Soldiers to the
    Air Force to protect their bases abroad and at home. These unplanned
    missions simply demonstrate the accessibility, reliability, and
    capability of the National Guard. Our overseas presence today is
    supporting missions on five continents, and the future demands a level
    of commitment similar to previous years. Not since World War II has our
    call to duty been so great. It is important to note that our total
    commitment since 9/11 has been a call to federal duty for 175,734
    Soldiers. That represents just over 50 percent of our force of 350,000.

    Readiness of the Force
        Well before the attacks of September 11th, Army National Guard
    units were being mobilized more frequently. The Total Force Policy in
    the Army worked. During the Cold War period of our Army, the
    expectation of readiness for the Reserve Components was to be
    ``generally ready for war.'' There were plans with TPFDDs and windows
    of time for expected deployment. The plan was to move to an active duty
    installation and then provide units with additional equipment and extra
    training. Since 9/11, that level of readiness and window of time have
    changed. Today our units are required to deploy at the highest level of
    readiness, and the time from notification to deployment is sometimes a
    matter of hours. In 2003, our units did extensive exchanging of
    Soldiers and equipment as they prepared for war in Iraq. We
    demonstrated flexibility, but placed unnecessary hardships on our
    Soldiers in the process. Soldiers went to war with equipment they had
    not previously trained upon. Thousands went to war with units other
    than their own. This method of exchanging resources after a unit
    mobilizes is not conducive to long-term success. Units must be manned,
    trained, and equipped before they get the call to go to war. Train--
    Mobilize--Deploy! The Army National Guard's level of readiness in the
    future should be C1, the highest level. The Army National Guard must
    modernize when the Army modernizes. We must raise the Full-Time Manning
    levels to 100 percent of Requirements. Our failure to resource Army
    National Guard units for any mission will place undue hardship on
    Soldiers as they go to war.

    Medical and Dental Readiness
        The Army and the Army National Guard have a vested interest in the
    care of Soldiers. The Army requires physical fitness prior to deploying
    to a war. Today's deployment timelines are shorter, and there have been
    some delays in our ability to respond to war because of the medical
    readiness of our Soldiers. Most, but not all, Soldiers have medical and
    dental plans. There are limits on the Army's ability to fix medical
    shortcomings after the Soldier is mobilized for war. We have
    experienced medical backlogs at some of the Army's installations
    responsible for providing medical treatment.
        The future of medical readiness rests in providing complete medical
    evaluations prior to being alerted for war. We envision that each of
    our State's Joint Force Headquarters provide support in the initial
    care for Soldiers and refer Soldiers for medical support beyond their
    capacity.
        The National Guard plans to provide periodic physicals to its
    Soldiers. This will enable our units to transition faster from a state
    of peace to war. We also envision leveraging the medical capabilities
    of our communities to offset the shortages in military medical
    providers. Medical readiness and health care for our Soldiers are key
    variants to our ability to train, mobilize, and deploy in the fashion
    of a Minuteman.

    Training Soldiers and Growing Leaders
        Supporting the Warfighter will be best accomplished by training the
    force with an integrated training strategy for individuals, leaders,
    and units through live, virtual, and constructive training.
        Throughout 2003, the Army National Guard prepared units and
    Soldiers for wars and responded to the nation's call for contingency
    operations. Our units trained at the Army National Guard Training
    Centers and the Army's Combat Training Centers. They participated in
    joint exercises and conducted training deployments overseas.
        The key to training Brigades is to have them participate in the
    Brigade Command and Battle Staff training. Five brigades participated
    in this training in 2003. Seven of the eight Army National Guard
    divisions participated in the Battle Command Training Program at the
    Joint Readiness Training Center at Fort Polk in Louisiana in 2003.
        The Army National Guard is committed to producing the best
    Soldiers. An excellent training venue is the Army National Guard
    training centers. These centers train Soldiers, simulate real-world
    conditions, and provide training enablers for the commanders.
        Another way the Army National Guard achieves training excellence is
    through Distributed Learning. The Army National Guard's emphasis on
    Distributed Learning reduces the time Soldiers are away from their home
    stations, eliminates excess travel time and costs, and takes less time
    than training in a formal school setting. The goal of this program is
    to maximize training time by providing more local access to training
    and education at any time and at any location.
        The Army National Guard's limited training time, training dollars,
    and sometimes access to training ranges has generated an increased
    reliance on low-cost, small-footprint training technologies. We have
    invested in a virtual training infrastructure to meet or exceed the
    Army's training requirements. As more missions such as homeland defense
    and weapons of mass destruction are required of the National Guard, the
    ability of our forces to respond requires that we are ready at all
    times. The following new virtual technologies are tools critical to
    achieving these readiness objectives:
      --Advanced Bradley Full Crew Interactive Skills Trainer.--The Bradley
            Fighting Vehicle, an armored personnel carrier, is the primary
            weapon system of the U.S. Army Mechanized Infantry, as well as
            a critical system for the cavalry. The current force structure
            plans have the Army National Guard providing more than half of
            the U.S. military's Bradley Fighting Vehicle force. The Army
            Infantry School approved the Advanced Bradley Full Crew
            Interactive Skills Trainer as a precision gunnery trainer. This
            is a low-cost, deployable training system that attaches
            directly to the Bradley and therefore does not require a
            simulated vehicle mockup, thereby better preparing the crew for
            live fire gunnery.
      --Abrams Full Crew Interactive Skills Trainer.--The Army National
            Guard provides 54 percent of the armor force in the U.S.
            military. This equates to nearly 2,500 Abrams tanks with the
            vast majority being the M1A1 configuration. The Abrams Full
            Crew Interactive Skills Trainer is approved by U.S. Army Armor
            School as a precision gunnery trainer. This, too, is a low-
            cost, deployable training system that attaches directly to the
            Abrams tank and therefore does not require a simulated vehicle
            mockup, thereby better preparing the crew for live fire
            gunnery.
      --Simulations Network Rehost.--In the mid-1980s, the Defense Advanced
            Research Projects Agency developed a new concept in simulation
            training called the Network. The goal of this trainer is to
            expose mounted combat forces to mock battles in an effort to
            develop tactical maneuver skills and improve situation
            awareness of commanders. This program provides a highly cost-
            effective means of providing basic tactical platoon-level
            training capability to a highly dispersed force. The
            Simulations Network units are platoon sets for the Abrams Main
            Battle Tank and the Bradley Fighting Vehicles. The National
            Guard's force structure accounts for approximately 50 percent
            of these mounted combat forces.
      --Table Top Trainers (M1A1 and M2).--The Table Top Trainer program is
            the linchpin of the National Guard's virtual training strategy.
            The ammunition and operational tempo cost to train this fleet
            exceeds $1 billion annually. The virtual training systems have
            been introduced to offset costs that were even higher in
            previous years. A single low-fidelity Table Top Trainer can be
            reconfigured to supply 60 to 70 percent of the associated
            skills training for Abrams Tanks, Bradley Fighting Vehicles,
            and Stryker Light Armor Vehicles. The remaining skills tasks
            can be trained in the available 25 percent training time in the
            high-fidelity trainers or through live fire events.

    Combat Training Centers and National Training Center
        In 2003, the Army National Guard sent over 28,000 Soldiers to
    participate in training at the Army's two Combat Training Centers. This
    training program cost $23 million but produced the most significant
    increase to training readiness for those units and Soldiers.
        North Carolina's 30th Brigade formed the core of a 34-unit, 15-
    state task force comprising the 5,545 Army National Guard Soldiers who
    deployed to the National Training Center at Fort Irwin, California, in
    May and June 2003. This training rotation was the culminating exercise
    in an intensive four-year train-up. The North Carolina Joint Force
    Headquarters formed Task Force Tar Heel that served as the division
    headquarters throughout the train-up and at the National Training
    Center. The 30th and North Carolina's Joint Force Headquarters executed
    wartime mobilization tasks by deploying the entire task force's
    equipment and personnel from facilities across the country to Fort
    Irwin's desert environment.
        During 2003, additional Engineer, Field Artillery, and Infantry
    units representing 3,732 Soldiers deployed to the National Training
    Center in support of Active Component rotations. These units served
    both as friendly and opposing force units integrated side by side with
    their active military counterparts. An additional 1,123 Soldiers
    assigned to Direct Support and General Support Maintenance Companies
    were sent to Fort Irwin to supplement maintenance and reconstitution
    operations.

    Joint Readiness Training Center
        In 2003, the majority of Florida's 53rd Brigade was mobilized and
    deployed to Iraq. In preparation for this mission, they underwent
    training at the Joint Readiness Training Center. While there, they
    supported the training of the 10th Mountain Division, 7th Special
    Forces Group, and the 3rd Brigade (Stryker), 2nd Infantry Division.

    Combined Arms Center
        Through the Army National Guard's Battle Command Training Center,
    the U.S. Army's Combined Arms Center at Fort Leavenworth, Kansas,
    supported the 29th Infantry Division and 49th Armored Division during
    their Battle Command Training Program rotation in 2003. The training
    center also conducted twelve Brigade Command and Battle Staff Training
    Program seminars. Over 15,500 Army National Guard Soldiers participated
    in these training events.

    Force-on-Force Training
        The Army National Guard Force-on-Force Training Program supports
    the readiness of the National Guard's ground combat units. This program
    simulates battles that are fought using laser-targeting systems to
    replicate live ammunition. Some 2,080 Soldiers from Army National Guard
    divisions participated in Force-on-Force events in 2003.
        In 2003, Army National Guard brigades participated in Battle
    Command Training Program staff exchanges, train-up exercises at the
    Combat Training Centers, and gunnery and divisional artillery training.
    A total of 30,034 Army National Guard Soldiers, 8 percent of the Army
    National Guard's endstrength, conducted training at or in association
    with the Army's training facilities at a cost of approximately $26
    million. The payoff of this relationship is obvious. Three of these
    brigades, the 30th, the 39th, and the 81st were directed to prepare for
    war in Iraq. They will deploy there early in 2004.

    Recruiting and Retention
        The Army National Guard ended 2003 with 1,091 Soldiers above its
    endstrength goal of 350,000, a result of surpassing retention goals and
    retaining quality Soldiers. Despite the unprecedented challenges at
    home and abroad, the Army National Guard validated the three-tenet
    Strength Maintenance philosophy of recruiting, attrition management,
    and retention. The ``Oath to Expiration of Term of Service'' philosophy
    has helped to create a partnership with the units by building greater
    trust and cooperation between the recruiting force, the full-time
    support force, and unit leadership. The Army National Guard has
    developed numerous tools to ensure continued success:
      --Highly successful advertising campaigns and recruiting initiatives
            that integrate the recruiting and retention force with
            traditional unit members.
      --Dynamic recruiting and retention programs to highlight the
            relevance, features, and benefits of Army National Guard
            service to current and potential Soldiers.
      --Soldier and family member feedback programs that assess unit
            environments and determine Soldier motivations for joining and
            remaining in the Army National Guard.
      --Post-mobilization surveys and retention initiatives to facilitate
            the re-integration of the unit and its members following
            deployment.
      --Post-mobilization ``Freedom Salute'' campaign to recognize Soldier,
            family member, and employer support of extensive overseas
            deployments.
      --Development of Recruit Sustainment Programs to better prepare new
            Soldiers for initial active duty training and promote unit
            strength readiness.
      --Attrition management/retention programs to educate leaders on
            caring for and mentoring Soldiers in the high operations tempo
            environment of the Global War on Terror.
      --Resource allocation that optimizes the effectiveness of the
            Strength Maintenance Philosophy and the teaming of the
            Recruiting and Retention Force and traditional Army National
            Guard Soldiers.

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                      Selected Reserve Incentives Program
        Up to $8,000 Enlistment Bonus for Non-Prior Service enlistees
      --$3,000 for critical skill
      --$3,000 for non-prior service bonus
      --$2,000 for Off-Peak ship to training
        $3,000 Civilian Acquired Skills Program for NPS enlistees
        $2,500 for a first 3-Year Re-enlistment/Extension Bonus
        $2,000 for a second 3-Year Re-enlistment/Extension Bonus
        $2,500 for a first 3-year prior service Enlistment Bonus
        $2,000 for a second 3-year prior service Enlistment Bonus
        $50 per month for Affiliation Bonus (72-month maximum)
        $10,000 Student Loan Repayment Program
        $50,000 Health Professional Loan Repayment Program

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

        Army National Guard Incentive Programs are currently undergoing
    review by program managers for potential adjustments to both the
    monetary amounts and the payment schedules of the various incentives.
    We believe these improvements are necessary to compensate our Soldiers,
    who are contributing to our nation's defense and deploying overseas on
    a continuous rotational basis. Our goal is to retain our Soldiers when
    they return.

    Army National Guard Full-Time Support
        Dedicated men and women who provide Full-Time Support to Army
    National Guard Soldiers are a critical part of the Army National Guard.
    They enhance readiness by assisting Unit Commanders in managing day-to-
    day requirements. In recent years, the Army National Guard has begun to
    expand its Full-Time Support force in order to better serve its
    Soldiers and the units to which they are assigned. To meet readiness
    requirements, the Chief of the National Guard Bureau, in concert with
    the state Adjutants General, has placed increasing Full-Time Support
    authorizations as one of the top priorities for the Army National
    Guard.
        The National Guard Bureau will place new Full-Time Support manpower
    into our units or into positions that directly impact unit readiness.
    An example is the Military Technicians that will be directly placed
    into organizational maintenance shops. Junior enlisted grades will
    increase through fiscal year 2012 and will be applied to the unit level
    to accomplish many of the missions where it is not uncommon to find
    single Active Guard Reserve Soldiers working today.

    Army National Guard Well-Being
        The Army National Guard Well-Being Team works in concert with the
    Active Army and the Reserve as part of a holistic initiative to address
    various issues affecting Soldiers, families, retirees, veterans, and
    civilians. The initiative uses various methods to measure success,
    weakness, or failure in programs that affect the total Army force.
    Based on the outcomes of these measures, policies and programs are
    modified or assets are re-allocated to impact the total Army force.

    Diversity Initiatives and Equal Opportunity
        The Army National Guard Diversity Initiatives Team addresses
    demographic realities impacting the Army National Guard as a community-
    based force. The role of women in American society continues to evolve.
    More positions in the Army National Guard are open to women based on
    changes in force structure. With the rapid advance in technology and
    changes in society, diversity also hinges on generational, technical,
    and cultural differences.
        The Army National Guard Equal Opportunity Team proactively
    addresses team development and cultural exchanges to foster more
    productive units and Soldiers. Fundamental to the mission of the Army
    National Guard, the Equal Opportunity Office addresses issues that
    arise relating to race, color, gender, sexual harassment, national
    origin, and religion. The Army National Guard is steadfast in
    maintaining zero tolerance for all forms and types of discrimination.
    The Army National Guard will guarantee that all are treated with
    dignity and respect.

                                HOMELAND DEFENSE

    Domestic Operations
        In 2003, the Army National Guard provided 419,463 mandays in 42
    states, two territories, and the District of Columbia to state-level
    emergency support missions. The year began with Tropical Storm Lilli
    along the Gulf Coast that required 9,835 mandays for cleanup and
    security. Super-typhoon Pongsona hit Guam and required 18,822 mandays
    to provide traffic control, water, debris removal, and security.
        The Army National Guard provided 318,131 mandays to Key Asset
    Protection, the most significant category of Emergency Support
    Missions. The Space Shuttle Columbia disaster demonstrated how quickly
    the National Guard responds from a ``standing start.'' On the day of
    the disaster, thousands of Army National Guard Soldiers from five
    states were on duty, recovering and safeguarding debris. This mission
    required 18,816 mandays of support.
        The Army National Guard also provided support to special events,
    including assistance to law enforcement for the Super Bowl and the
    Kentucky Derby. Support to governors in response to Hurricane Isabel
    ended a busy year.
        The Army National Guard routinely performs training missions that
    simultaneously support and assist our communities. The Innovative
    Readiness Training Program required 205,000 mandays of support in 2003.
    Programs included improving schools and parks, building and repairing
    roads, administering immunizations, and providing medical care to
    under-served areas.
        The California Army National Guard is leading an effort to
    construct access roads to the United States-Mexican border to assist
    the Border Patrol in dealing with the growing tide of illegal
    immigrants and narcotics. In Alaska, the Guard is leading a five-year
    project that will result in a 15-mile road connecting two villages on
    Annette Island, a trip that currently can only be made by boat. The
    Army National Guard in Maine, Colorado, Arizona, Illinois, North
    Carolina, Texas, and Alaska conducted medical training exercises to
    provide inoculations, physician contacts, dental care, and optometrist
    services to under-served populations. Innovative Readiness Training
    projects benefit both the Army National Guard and the communities.

    Missile Defense
        Defense against ballistic missile attack is a key component of the
    National Security Strategy in providing for Homeland Security. The
    National Guard will play a major role in this mission as the force
    provider for the Ground-based Midcourse Defense system in the initial
    defensive operations/defensive operations phase per National Security
    Presidential Directive 23, dated December 16, 2002.
        The National Guard received an increase of 100 in Active Guard and
    Reserve authorizations in the fiscal year 2004 President's Budget
    request to support this mission. Ground-based Midcourse Missile Defense
    is a critical element of the Administration's National Security
    Strategy and defense of the homeland. This program is continually
    evolving and undergoing refinement.

    Continuity of Operations
        The National Guard's Continuity of Operations Program was
    conceptualized in 1988 and took on added importance after September 11,
    2001. In support of homeland defense, the Guard is utilizing this
    program as a means to ensure continuous command and control in case of
    emergency.
        Executive orders, Department of Defense directives, Chairman of the
    Joint Chiefs of Staff directives, and Army Regulations require a
    Continuity of Operations Program. This protects key leaders; allows for
    the continuity of essential missions; provides for relocation sites;
    protects vital records and operating files; and ensures survivability,
    recoverability, and the ability to reconstitute. The National Guard has
    taken a three-level approach to achieving this end:
      --The first level is the Headquarters Department of the Army
            Continuity of Operations Program that provides the active
            component with the Army National Guard leadership to support
            the War fight.
      --The second level is the National Guard Continuity of Operations
            Program that allows both the Army National Guard and the Air
            National Guard to continue supporting the states and
            territories in the event of a national disaster.
      --Finally, the National Guard is also providing the platform for the
            54 states, territories, and the District of Columbia to develop
            their own Continuity of Operations Program initiatives to
            support both homeland defense and the War fight at the state
            and local level.
        The National Guard plans to exercise the Continuity of Operations
    Program at all three levels to ensure readiness and preparedness for
    any situation. Ultimately, Continuity of Operations Programs will
    ensure that no matter the situation, the National Guard will be ready
    to continue its essential missions.

                      TRANSFORMATION FOR THE 21ST CENTURY

        The Army National Guard is changing. Although our forces continue
    to meet today's missions, tomorrow's force must be more versatile,
    ready, and accessible than ever before. They must continue to be
    capable of full-spectrum operations, but must be better equipped and
    trained to defend the nation. Future Army National Guard forces must be
    more interoperable with the Active Component and must be fully capable
    of operating in a joint or interagency environment. Finally, Guard
    forces must be postured to support long-term Stability and Support
    Operations, Peacekeeping Operations, and the missions of the newest
    Combatant Command, NORTHCOM.
        In order to achieve these objectives, the Army National Guard must
    attract and retain quality Soldiers. We must train and equip them to
    accomplish the missions of tomorrow.

    Force Balance and Restructure
        The Department of the Army is revising priorities to better support
    the National Military Strategy. Under the direction of the Secretary of
    Defense, the Army is exchanging some formations from the Active
    Component and the National Guard. These realignments will better align
    the Army National Guard and the Army in supporting the warfighting and
    Homeland Defense missions.
        Another significant aspect of this force balance analysis is an
    initiative by the Director of the Army National Guard to reduce the
    Army National Guard's force structure with its congressionally
    authorized personnel endstrength. This rebalancing effort will enable
    the Army National Guard to deploy units within five to 30 days because
    their readiness will be improved.
        The results of force balance adjustments, coupled with the
    alignment of force structure and personnel endstrength, will allow the
    Army National Guard to provide divisions, brigade combat teams, and
    supporting forces that are ready and capable of supporting the full
    spectrum of military operations required by the National Military
    Strategy.

    High Demand Units
        Since 1995, the Army has placed a high demand on the Military
    Police in the National Guard. Beginning with missions to the Balkans,
    the rate of work for these units has only increased. Today they are
    used extensively in the Global War on Terrorism, principally in
    guarding prisoners. To reduce the stress on Military Police units, we
    have started to convert Field Artillery units into Military Police.
    Eighteen additional Military Police units will be organized in the next
    two years.

    Modular Units
        The Chief of Staff, Army, has directed a comprehensive reevaluation
    of the Army's corps, divisions, and brigade structures with the intent
    of making these units more expeditionary through modular design.
    Modular units will allow for a ``plug and play'' capability, which will
    enable the Army to provide the flexible mix of capabilities needed by
    the warfighter. The Army National Guard will adapt existing force
    structure to the new design envisioned by the leadership of the Army.
    Over the next few years, we will reconfigure existing brigades,
    including the 15 enhanced Separate Brigades, to the new Brigade Combat
    Team design. We will have 34 Brigade Combat Teams and 8 Divisional
    Headquarters that will be designed in an infantry and armored mix
    identical to the Active Component's. This modular capability will
    provide a new level of flexibility to our organizations as they support
    the full spectrum of military operations. Distribution of new
    capabilities will be equitable across the states.

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

    Fiscal Year 2005 Army National Guard Equipment Modernization Shortfall
                                      List
        High-Mobility Multi-Purpose Wheeled Vehicles (HMMWV)
        Single-Channel Ground and Airborne Radios (SINC-GARS)
        Night Vision devices
        Black Hawk utility helicopter
        Heavy Expanded Mobility Tactical Trucks (HEMTT)
        Small Arms
        Family of Medium Tactical Vehicles (FMTV)
        Javelin Anti-Armor Missiles
        Thermal Crew-Served Weapon Sight
        Movement Tracking System
        Enhanced Position Location Reporting System (EPLRS)
        Warlock Electronic Jamming Device
        Tactical Unmanned Air Vehicle (TUAV)
        M-22 Automatic Chemical Detector Alarm
        Prophet Signal Intelligence System
        Line Haul Tractor (M915A3)
        22\1/2\-ton Trailer (M871A3)
        Dump Truck (M917A1)
        34-ton Trailer (M872A4)
        Tactical Quiet Generators
        Secure Mobile Anti-Jam Reliable Tactical Terminal (SMART-T)
        Sentinel air defense radar system
        Howitzer (LW 155)
        Bradley Infantry Fighting Vehicle (M2A2)
        Hercules (M88A2 [heavy tank recovery vehicle])

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

    Force Modernization
        The Army's highest priority remains maintaining warfighting
    readiness. In support of this priority, the Army National Guard is
    pursuing a modernization strategy that will provide the nation with
    compatible, interoperable, and strategically relevant forces well into
    the future.
        In the near term, we will ensure our Soldiers are equipped with
    essential force protection items such as the latest body armor with
    Small Arms Protective Insert plates for the outer tactical vests, the
    latest Night Vision Devices, and small arms. To enhance near-term
    readiness, the Army National Guard will focus on Army procurement of
    the Black Hawk utility helicopter, High-Mobility Multi-Purpose Wheeled
    Vehicles, Single-Channel Ground and Airborne Radios, Family of Medium
    Tactical Vehicles, and M-22 Automatic Chemical Detector Alarm.
        In the midterm, the Army National Guard will ensure the Army
    earmarks sufficient funding to refurbish or recapitalize its current
    forces to ensure fleets viability over the next several decades and for
    future readiness and relevance. The Army National Guard will focus on
    Current Force systems to include our primary aircraft, the Black Hawk,
    CH-47 Chinook, and the Apache; the M1A1 Abrams Main Battle Tank; M2A2
    Bradley Fighting Vehicle; M109A6 Paladin Howitzer; Heavy Expanded
    Mobility Tactical Trucks; and the 5-ton truck fleet. The Army National
    Guard will continue working with the Army to ensure program managers
    bring systems cascaded to the Army National Guard's Divisional and
    Corps troop units up to the required standard.

    Army National Guard Aviation Modernization & Transformation
        Throughout 2003, the focus of the Army National Guard aviation
    modernization and transformation efforts was directed toward completion
    of sweeping changes to unit organizational designs. Accompanying these
    widespread conversions to the Army Aviation Transformation designs was
    the continued turn-in of obsolete UH-1H/V ``Huey'' (Iroquois) and OH-
    58A/C Kiowa series aircraft, and the fielding of the additional modern
    UH-60A/L Black Hawk and AH-64A/D Apache series aircraft. Unfortunately,
    while the Army National Guard net inventory of modernized aircraft
    increased by 8 Black Hawk and 17 Apache aircraft during fiscal year
    2003, the resulting Army National Guard levels for these aircraft did
    not meet Army goals. In addition, most of the supporting or corrective
    actions scheduled and funded for 2003, such as increased quantities of
    special tools and spare parts, were effectively negated by the
    increased requirements for contingency operations in Afghanistan and
    Iraq. Based upon current projections, it is uncertain whether the
    originally scheduled fiscal year 2002 figures for the Black Hawk and
    Apache inventory in the Army National Guard will be reached by end of
    fiscal year 2004. Army fixed-wing aviation modernization efforts are
    underway to replace the Army National Guard's C-23 Sherpa cargo
    aircraft with a more robust and capable airplane.

    Information Operations
        Army National Guard Information Operations Field Support Teams
    assist the Brigade, Division, Corps, Joint Task Force, and Combatant
    Commanders in integrating full-spectrum offensive and defensive
    information operations, planning, execution, and assessment into their
    operations. Additionally, Army National Guard full-spectrum Information
    Operation Vulnerability Assessment Teams, Computer Emergency Response
    Teams, and Joint Web Risk Assessment Cells contribute to national and
    homeland security through the protection of information infrastructure.
    The teams deploy domestically and globally to provide their specialized
    service to the Combatant Commanders.
        In fiscal year 2003, the Army National Guard's Information
    Operations program continued to develop technically and tactically
    focused units that supported the warfighting commanders and provided
    protection of the nation's critical information infrastructure across
    the operational continuum. During the same period, the Army National
    Guard Information Operations section for the Pennsylvania Guard's 28th
    Infantry Division and Minnesota's 34th Infantry Division deployed in
    support of peacekeeping operations in Bosnia and Kosovo. Seven
    Information Operations Field Support Teams and one Computer Emergency
    Response Team were mobilized in support of Operation Iraqi Freedom. The
    Army National Guard Information Operations program also provided
    operational support to all major commands and several Army divisions.
        This program has trained over 2,400 Reserve and Active Component
    Soldiers since fiscal year 2000. The program is scheduled to expand its
    training capability, doubling its capacity in fiscal year 2004.

    Logistics and Equipment
        The Army National Guard is deployed all over the world in support
    of the Global War on Terrorism and operations taking place in
    Afghanistan and Iraq. Army National Guard personnel, in many cases,
    train on and use older generation equipment to help support these
    critical operations. This equipment is far behind the current
    technologies, making much of what is used by the National Guard
    incompatible with current Army equipment. And in many cases this older
    equipment is more expensive to operate and maintain. An additional
    challenge is that operational costs of older equipment are higher than
    the new versions due to increased failure rates and decreased
    availability of spare parts.
        The Army National Guard has faced modernization challenges in
    previous years for such systems as the High-Mobility Multi-Purpose
    Wheeled Vehicles, Single-Channel Ground and Airborne Radios, chemical
    and biological detection equipment, and Night Vision Devices. Many of
    these challenges have had an adverse impact on units preparing for
    overseas deployment.
        The Army National Guard is making significant progress in
    modernizing its heavy force and bridging its equipment to the digital
    force. Emerging technologies will dramatically lower the logistics
    impacts of these systems and substantially reduce repair times,
    increase operational readiness rates, and eliminate obsolete and
    unsustainable test equipment. This will allow the Army National Guard
    to operate its heavy equipment at a higher operational rate while
    reducing the overall costs for these systems.

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

         Equipment Modernization Challenges in the Army National Guard
        High-Mobility Multi-Purpose Wheeled Vehicles
        Single-Channel Ground and Airborne Radios
        Chemical and biological detection equipment
        Night Vision Devices

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

        The Army National Guard currently has a significant portion of the
    Army's maintenance infrastructure. This Cold War vestige is too
    expensive and redundant. Under the Army's new maintenance strategy, the
    Guard and other Army elements are transforming their maintenance
    capabilities from a four-level system to a two-level system. This two-
    level maintenance system will cut redundancy in the system and allow
    Army maintenance personnel to more efficiently diagnose and maintain
    equipment at the forward level.
        Another focus area for the Army National Guard is the agility and
    flexibility provided as a full partner in the Army Acquisition
    Community. Whether it is grooming expert contingency contracting
    personnel, facilitating Rapid Fielding activities, and/or participating
    in major Army Program/Project Executive Offices, Army National Guard
    Acquisition professionals are engaged in depth. The Army National Guard
    is aggressively analyzing the task organization of Contingency Support
    Contracting Teams. The members of these teams, task-organized from the
    existing Modified Table of Organization and Equipment structure, are
    identified and trained in advance to support specific deployment
    requirements, giving deploying commanders the flexibility necessary to
    accomplish their missions without relying on supporting unit
    assistance.

    Environmental Programs
        Training the best force in the world requires the world's best
    training areas. The Army National Guard's environmental programs
    support the war-fighter and homeland defense by sustaining healthy
    training lands. By reducing training restrictions, the Army National
    Guard is able to be a good steward of the land it uses, while operating
    top training facilities. The first Army Compatible Use Buffer under
    Title 10, U.S. Code 2684A was recently implemented at Camp Blanding,
    Florida. Within the designated buffer, and in collaboration with other
    agencies, the National Guard has formed land-use agreements to ensure
    land-use is compatible with military operations.
        In addition, Integrated Natural Resource Management Plans will now
    be used in lieu of critical habitat designation to ensure training
    lands will continue to be used for training while simultaneously
    protecting habitat. Also, the Army National Guard has instituted
    restoration programs to clean and restore contaminated sites.
    Initiatives at seven sites were recently completed and efforts at five
    additional sites will be conducted through fiscal year 2005.
        The Army National Guard is also improving its business practices as
    they relate to the environment. Environmental program management will
    be improved through the implementation of mission-focused Environmental
    Management Systems. The Army National Guard will change its
    environmental program from one of compliance to one that is proactive
    and oriented toward the strategic goal of sustainable installations.
    This will enhance the ability of warfighting units while minimizing
    environmental impacts. Our organization is utilizing tools such as the
    Environmental Performance Assessment System's Compliance Site
    Inventory, a web-based module that allows environmental managers to
    track, manage, and query a wide array of compliance data. Recent
    program developments include a series of protocols to assess the
    progress of the Environmental Management Systems.
        A top priority for the Army National Guard is preparation for
    fiscal year 2005 base realignment and closure actions and the effect
    these will have on the environment. The Army National Guard expects to
    have a complete inventory of training lands by 2006 through its
    Geographic Information System program. These technologies are critical
    to the battlefield intelligence component of transformation.

    Part of the Joint Force
        During the past year, the Chief of the National Guard Bureau
    directed the most profound organizational change to the National Guard
    since the end of World War II. The heart of this transformation effort
    was to combine the separate Army and Air National Guard Headquarters
    that existed in each state and territory into a Joint Force
    Headquarters, State. The vision was to make the National Guard more
    responsive to regional Combatant Commanders and better enable the Guard
    to defend the nation as part of the Joint Team.
        The Army National Guard is capable of fighting as part of the Joint
    Team. Today, operations in both peace and war are conducted by Joint
    Forces. Army National Guard leaders must be trained and capable of
    operating in a joint environment.
        To ensure that its leaders are capable of this, the Army National
    Guard is developing the means to expose them to joint operations at
    various stages in their careers, and facilitate the opportunity for
    them to receive Joint Professional Military Education. These
    opportunities and experiences with the realities of joint operations
    will better assure prepared leadership in the Army National Guard.

    Predictability for Our Soldiers
        The National Guard has manned units from local communities since
    the first muster in the Massachusetts Bay Colony in 1636. The National
    Guard is a community-based force where a Soldier may spend an entire
    career in the same battalion, company, battery, or troop. This provides
    for unit cohesion, stability, continuity, and the bonds of camaraderie
    that come from shared hardships and experiences.

        Although we remain a ``Minuteman'' force, predictability is an
    important factor in retaining our Citizen-Soldier. Since 1996, our
    force has been consistently called to federal active duty. Our Soldiers
    have and will continue to muster for any mission in the fine tradition
    of the National Guard. However, the Global War on Terrorism is
    projected to last several years. Feedback from the Soldiers, their
    families, and their employers is consistent: they simply wish to know
    when they are needed and for how long. Soldiers are asking for
    predictability. When possible, mobilizations and deployments should be
    forecasted in advance, potentially years ahead of a unit's deployment.
    The Army National Guard is working towards instituting a Predictable
    Deployment Cycle that will provide units a forecast on overseas
    deployments. This predictable cycle looks at using a unit only one time
    in a six-year period. This is a benchmark. While the National Guard
    stands ready for any mission at any time, this concept will help
    alleviate the magnitude of the unknown.

    Home Station Mobilization
        Home Station Mobilization is a National Guard initiative that
    empowers the Joint Force Headquarters, State, with greater
    responsibilities for the mobilization of units deploying to war. The
    Joint Force Headquarters, State, assume responsibility for all
    mobilization processing activities that are currently done at active
    duty installations. This expedites the mobilization of the National
    Guard and their employment into theaters of operation. Improved
    efficiencies in mobilization allow the Army to maximize the operational
    capability of the force. Three units successfully conducted Home
    Station Mobilization and demobilization in fiscal year 2003.

    Strategic Readiness System
        The Army National Guard implemented the Strategic Readiness System
    in 2003 to more accurately capture unit readiness. This is an
    integrated strategic management and measurement system that ensures
    that all levels of the Army recognize and align their operations to the
    vision, objectives, and initiatives of the Army Plan. It measures each
    element's success in achieving these goals. The Strategic Readiness
    System has assisted Army transformation by changing the way the Army
    National Guard approaches and reports readiness data.

    Personnel and Human Resources
        Continuing Army National Guard participation in the Department of
    Defense Personnel Transformation includes immediate movement towards
    the implementation of the Defense Integrated Military Human Resources
    System during 2005-2006. This human resource system aligns the Army
    National Guard with a Defense vision and goal of a Joint Service
    integrated personnel and pay system. It will provide support throughout
    the life cycle of a service member's career. Development and
    implementation are proceeding under the direction of the Under
    Secretary of Defense for Personnel and Readiness in coordination with
    all services and components. This human resource system will streamline
    the Guardsman transition from a non-federal to federal active duty
    status.
        The Army National Guard's Permanent Electronic Records Management
    System is a web-based system utilizing digital imagery to store and
    retrieve personnel records. Its importance lies in its seamless records
    management capability throughout the Army, enhancing both mobilization
    and personnel readiness.
        By consolidating the administrative operation of human resources in
    one place, the Permanent Electronic Records Management System allows
    personnel records to follow a Soldier regardless of component. Army
    National Guard enlisted records, currently in hard copy, will be
    converted to an electronic form in fiscal years 2004 and 2005. It will
    also 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.
        Moving from a paper system to a digital 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 and programmed for
    fielding in fiscal year 2005.

                                   CONCLUSION

        The Army National Guard remains a unique capability with its State
    and Federal mission. As a community-based force, we are entrusted with
    the responsibility to protect our citizens' liberties and our nation's
    freedoms. Army National Guardsmen have a warrior's ethos and a loyalty
    to respond to any Governor or Presidential call to duty.
        Our Soldiers have been called upon more than ever to provide
    security to our nation. We are a ready and relevant force, but we will
    continue to raise our readiness level to C1, the highest level. We are
    committed to obtain the necessary resources in the areas of
    modernization, training, and equipping. Our Soldiers will not reach
    their fullest potential readiness with outdated equipment, limited
    health care, and unpredictable deployment cycles. In all areas,
    however, we remain dedicated to using our resources efficiently and
    prudently.
        The Army National Guard continues its transformation into a leaner,
    more agile and ready force. As the Army National Guard continues to
    operate in concert with the U.S. Army, it will fight wars and ensure
    the safety and well-being of the American people.
                                     ______

           Prepared Statement of Lieutenant General Daniel James, III

                                    OVERVIEW

        What an incredible year this has been for the nation and the Air
    National Guard. We've continued to make great strides in securing peace
    for the nation in the Global War on Terrorism. We have validated
    everything we've said about our capabilities: we train to fight and can
    accomplish the mission professionally and, most importantly, bring the
    will of the American people to the conflict.
        Our contributions over the past two years and specifically in
    Operation Iraqi Freedom have been tremendous. Since September 11th,
    we've mobilized over 36,000 members and have flown over 111,000 sorties
    for over 340,000 hours. One-third of the Air Force aircraft in
    Operation Iraqi Freedom was from the Air Guard. We flew 100 percent of
    the Operation Enduring Freedom A-10 missions and 66 percent of the
    Iraqi Freedom A-10 taskings. We accomplished 45 percent of the F-16
    taskings. The A-10s flew more combat missions in the Iraqi war than any
    other weapon system. Thanks to our innovative culture, we modernized A-
    10 and F-16 Block 52 aircraft with LITENING II targeting pods in just
    three months, giving them precision guided munitions capability.
    Because of this capability, we were 100 percent successful in stopping
    SCUD missile launches in the Western Iraqi desert.
        We flew 86 percent of the Operation Iraqi Freedom tanker sorties.
    We accomplished this primarily through the Northeast Tanker Task Force
    which was operating within 24 hours of initial call from Air Mobility
    Command. In line with our militia spirit, that task force was initially
    manned through volunteerism. A total of 18 units supported it; 15 were
    from the Air Guard.
        Iraqi Freedom was also the first employment of the integrated 116th
    Air Control Wing flying with the Joint Surveillance and Target Attack
    Radar System (JSTARS). Wing leadership and the Guard and Active crews
    worked together superbly. While there is still work to do to fix some
    administrative issues, we have validated the concept of blended or
    integrated units.
        Our Expeditionary Combat Support has been providing outstanding
    service to the warfighter. Air National Guard maintenance quickly
    rewired our A-10s and F-16s with LITENING II in minimum time. They've
    kept our aircraft flying despite the challenging operating conditions.
        Security Forces personnel were mobilized for two years and have
    provided an incredible service. It was Air National Guard Security
    Forces that were the first Security Forces on the ground in Iraq.
    Intelligence personnel have been providing unique capabilities for
    Central Command and organizational support for the U-2, Predator, and
    Global Hawk. Medical personnel have been utilizing the new
    Expeditionary Medical Service capability, providing critical care to
    the warfighter. Civil Engineers built bare bases out of the desert and
    trained Iraqi firefighters while Weather personnel worldwide provided
    over 50 percent of the Army's weather support. Financial Management
    personnel have been diligently working to keep benefits flowing to our
    members despite complex systems. Air National Guard Command, Control,
    Communications and Computer personnel have kept vital information
    flowing on one end of the spectrum and provided Ground Theater Air
    Control System Personnel on the other. Our chaplains, too, have been
    providing outstanding spiritual aid out in the field. We have been able
    to participate at these levels because we provide Expeditionary and
    Homeland Defense capabilities that are relevant to the nation.
        Today as we look toward our future relevancy, as indispensable and
    equal Total Force partners, we have to be prepared to transform with
    the Total Force. We are now in a position to make the decisions that
    will influence our next evolution--transforming the Air National Guard.
    We are fully committed to the transformation of the National Guard
    Bureau and Joint State Headquarters.
        Some of today's capabilities may not be required in the future. The
    future Air Force will rely heavily on technological advances in space,
    command and control, intelligence and reconnaissance systems,
    information warfare, unmanned aerial vehicles, and the ability to
    conduct high volume and highly accurate attacks with significantly
    fewer platforms. For the Air Guard to remain Total Force partners, we
    have carved out our own strategy in those areas and will explore new
    organizational constructs. Among those constructs are various forms of
    integrated units where we can combine individual units with other Air
    Guard units or with another service component. We have to expand our
    capabilities as joint warfighters and make the necessary changes to
    integrate seamlessly into the joint warfighting force. To remain
    relevant we must continue to listen to the messages that are being sent
    today.
        The ``VANGUARD'' Engagement Strategy is our vision for transforming
    the Air National Guard to remain ``out in front'' as the Department of
    Defense addresses current realities and plans for an uncertain future.
    Our Air National Guard of tomorrow will be molded by our
    transformational approach and actions of today. The Engagement Strategy
    highlights several Transformation Focus Areas where we can concentrate
    our continuing transformational efforts.
        We must continue to lean on the strengths of our people, core
    values, core competencies, community connections and unique culture
    while participating in Air Force and Department of Defense
    Transformation, Jointness and Capabilities-Based Relevance.
        Now is the time for us to lead the way by considering, selecting
    and implementing new concepts and missions that leverage our unique
    strengths to improve Total Force capabilities in support of
    Expeditionary roles and defense of the homeland. This can only be
    accomplished by involving all Air National Guard stakeholders, working
    toward a common goal--enhanced future relevance for the entire Air
    National Guard. Vanguard seeks the optimum synergy resulting from
    melding the right concepts and missions at the right times and places
    for the right reasons without jeopardizing our core values and historic
    traditional militia heritage and culture.
        By together addressing the complex issues that face us, we will
    keep the Air National Guard ``Ready, Reliable, Relevant--Needed Now and
    in the Future.''

                             SUPPORT THE WAR FIGHT

        In the continuing tradition of the Citizen-Airmen, members of the
    Air National Guard have been contributing to the Global War on
    Terrorism across the full spectrum of operations. During the peak of
    Operation Iraqi Freedom, we had over 22,000 members mobilized or on
    volunteer status supporting the Global War on Terrorism worldwide. In
    Operation Iraqi Freedom we flew 43 percent of the fighter sorties, 86
    percent of the tanker sorties and 39 percent of the airlift sorties. At
    the same time we were flying almost 25 percent of the Operation
    Enduring Freedom fighter sorties and over 20 percent of the tanker
    sorties. True to our heritage, Air National Guard members were hard at
    work protecting our shores at home by flying over 70 percent of the
    fighter sorties, over 50 percent of the tanker sorties and 35 percent
    of the airlift sorties.
        But our capabilities do not reside only in aircraft; 15 percent of
    our expeditionary combat support were engaged during this same period.
    This includes 60 percent of Security Forces, many of whom were
    mobilized for the longest duration. Additionally, about 25 percent of
    our Intelligence, Services and Weather personnel were mobilized.
        Air National Guard men and women are proud to defend and protect
    our nation at home and abroad. Often, however, support equipment
    requirements overseas necessitate that equipment remain in place,
    causing a shortage of equipment for training at home. We are working
    with Air Force and Defense Department leaders to develop a solution.

    Medical Service Transformation--Expeditionary Combat Support, Homeland
            Defense, and Wing Support
        In 2002, the Air National Guard's Surgeon General led the Air
    National Guard Medical Service through its most revolutionary
    transformation in history by reconfiguring its medical capabilities
    into Expeditionary Medical Support systems. These systems provide
    highly mobile, integrated and multifunctional medical response
    capabilities. They are the lightest, leanest and most rapidly
    deployable medical platforms available to the Air National Guard today.
    This system is capable of simultaneously providing Expeditionary Combat
    Support to the warfighter for Air and Space Expeditionary Force
    missions, Homeland Defense emergency response capabilities to the
    states and support to the Air National Guard Wings.
        During Operation Iraqi Freedom, Air National Guard medical units
    provided Expeditionary Combat Support to the warfighter. The
    Expeditionary Medical Support capability allowed 10 percent of Air
    National Guard medical unit personnel to deploy for Operation Iraqi
    Freedom, compared to only 3 percent in the early 1990s for deployments
    for Operations Desert Shield and Desert Storm. The United States
    Central Command has validated that the Expeditionary Medical Support
    system is a perfect fit for the Chief of Staff, U.S. Air Force Global
    Strike Task Force and Concept of Operations.
        Homeland Defense capabilities are provided by the Expeditionary
    Medical Support system through its Military Support to Civil
    Authorities. The Air National Guard Medical Service plays a vital role
    in the development and implementation of the National Guard's Chemical,
    Biological, Radiological, Nuclear, and High-Yield Explosive Enhanced
    Response Force Package. This package will provide support to state and
    local emergency responders and improve Weapons of Mass Destruction
    response capabilities in support of the Civil Support Teams. The Air
    National Guard will have 12 trained teams by late 2004 and will build
    toward an anticipated 54 teams by 2007. The Air Combat Command Surgeon
    General has committed to providing 39 mass decontamination equipment
    sets to 39 Wings for installation-to-installation support, which will
    ensure that the Chemical, Biological, Radiological, Nuclear, and High-
    Yield Explosive Enhanced Response Force package's decontamination teams
    remain trained. The National Guard's short-term objective is to obtain
    10 Small Portable Expeditionary Aerospace Rapid Response equipment
    sets, one for each Federal Emergency Management Agency Region.
        The Air National Guard Medical Service's new Force Structure
    provided by the Expeditionary Medical Support system provides
    standardized and much improved Force Health Protection, Public Health,
    Agent Detection, and Health Surveillance capabilities to better support
    all Air National Guard Wings. This will enhance the protection of the
    Wings' resources and improve the medical readiness of its personnel.
        Thus the modular ``building block'' capability of Expeditionary
    Medical Support provides an advanced technology and an essential,
    tailored medical capability in a small forward footprint expandable to
    meet situational needs.
        The Air National Guard Surgeon General has pursued and will
    continue to develop the Air National Guard Medical Service's technology
    and modernization plans to support the warfighter's, state's, and
    Wing's requirements.

    Eyes and Ears in the Sky: Air National Guard Intelligence,
            Surveillance, and Reconnaissance Systems and Support
        The Air National Guard's Intelligence Surveillance and
    Reconnaissance personnel and systems play an increasingly important
    role in the defense of our nation. Air National Guard men and women are
    essential to Air Force tasking, processing, exploitation, and
    dissemination missions to support Global Hawk, Predator, and U-2
    collection missions.
        Due to a significant increase in Air Force mission requirements,
    the Air National Guard continues to expand its intelligence collection
    and production capability. The Air National Guard has also expanded its
    imagery intelligence capability through the use of Eagle Vision, which
    is a deployable commercial imagery downlink and exploitation system.
    This system provides valuable support to aircrew mission planning and
    targeting, as well as imagery support to natural disasters and
    terrorism.
        Other developing Air Force capabilities that are entrusted to the
    Air National Guard include the F-16 Theater Airborne Reconnaissance
    System and the C-130 SCATHE VIEW tactical imagery collection system.
    The Theater Airborne Reconnaissance System will be improved to provide
    near-real-time support to warfighter ``kill-chain'' operations in day-
    night, all weather conditions. SCATHE VIEW provides a near-real-time
    imaging capability to support humanitarian relief and non-combatant
    evacuation operations. To support signal intelligence collection
    requirements, the Air National Guard continues to aggressively upgrade
    the SENIOR SCOUT platform. SENIOR SCOUT remains the primary collection
    asset to support the nation's war on drugs and the Global War on
    Terrorism in the Southern Hemisphere. Finally, the Air National Guard
    established a new unit to support RC/OC/WC-135 flying operations at
    Offutt AFB, Nebraska. This unique future Total Force organizational
    construct is transformational and serves as a successful example for
    future operationally integrated units. The Air National Guard is
    transforming its force structure to meet escalating Intelligence
    Surveillance and Reconnaissance mission requirements and an ever-
    increasing demand for Air Guard capabilities.

    Managing Force Finances
        Financial Management experienced an unprecedented deployment tempo
    during 2003. For the first time ever, an Air National Guard Comptroller
    was assigned exclusive command and fiduciary responsibility for the
    establishment and sustainment of financial operations in direct support
    of combat missions. The challenge was to create a financial
    infrastructure from scratch. This Comptroller and subordinate staff of
    5 Air National Guard financial management professionals ``financed the
    fight'' with distinction.
        As locations overseas were vacated, our financial management
    expertise was noticeably acknowledged. Our finance personnel were
    specifically chosen and assigned the significant responsibility for
    final reconciliation and settlement of accounts. The importance of
    departing the local economy with balanced books and completely
    liquidated fiscal obligations cannot be understated. The Air Guard
    delivered remarkable stewardship in this demanding role.
        The Operational Tempo at home generated another Financial
    Management ``first''. One hundred seventy-six Air National Guard
    finance personnel were mobilized as part of an innovative home station
    support package. This was a transformational approach to the surge in
    processing workload that tripled as hundreds of Airmen at each unit
    were called to duty and follow-on overseas deployment.

    The Air National Guard: Using the Stars to Serve the Community
        For the Air Guard, Space Operations provide a critical
    communications link to communities throughout the nation in the form of
    satellite support for everyday uses, television, computers, and
    wireless phones, but also serve as an important military deterrence
    from external threats. Currently, the 137th Space Warning Squadron in
    Colorado provides mobile survivable and endurable missile warning
    capability to U.S. Strategic Command. Recently, two Air National Guard
    units in Wyoming and California have come out of conversion to provide
    operational command and control support to Northern Command and to
    provide round-the-clock support to the Milstar satellite constellation.
        Additionally, the Air Force has approved space missions for the
    119th Command and Control Squadron in Tennessee to support the U.S.
    Strategic Command, and 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 missions and assets in Alaska and other states
    to Air National Guard control.

    Comprehensive and Realistic Combat Training--An Asymmetric Advantage
        The National Guard Bureau has a fundamental responsibility to
    ensure that the men and women of the Air Guard are properly trained to
    meet the challenges they will face to protect and defend this country.
    This can be done through the effective development and management of
    special use airspace and ranges. To support this requirement of the
    warfighter, the Air Guard is responsible for 14 air-to-ground bombing
    ranges, four Combat Readiness Training Centers, and the Air Guard
    Special Use Airspace infrastructure.
        To ensure that our units remain ready and relevant, they must have
    access to adequate training airspace and ranges that meet the demands
    of evolving operational requirements. The National and Regional
    Airspace and Range Councils, co-chaired by both the Air Guard and the
    Air Force, continue to identify and work airspace and range issues that
    affect combat capability and are engaged with the Federal Aviation
    Administration in the redesign of the National Airspace System.
        Transformation efforts to improve realistic training at our ranges
    have been identified by several units as instrumental in preparation
    for Operation Iraqi Freedom. For example, the recently deployed Joint
    Modular Ground Targets, Urban Area Targets and Time Sensitive Targets
    provide training that reflects today's combat realities. Ranges are
    being equipped with modernized scoring and instrumentation and data-
    link equipment necessary to support precision-guided weapons training.
    Critical training is provided to ground Forward Air Controllers as well
    as aircrews. Range residual cleanup and associated environmental issues
    remain a major challenge.
        The four Combat Readiness Training Centers provide an integrated,
    year-round, realistic training environment (airspace, ranges, systems,
    facilities, and equipment), which enables military units to enhance
    their combat capability at a deployed, combat-oriented operating base
    and provide training opportunities that cannot be effectively
    accomplished at the home station. As such, these centers are ideal
    assets for the Joint National Training Capability. The centers offer an
    effective mix of live, virtual and constructive simulation training.
    The Air National Guard continues to pursue National Training Capability
    certification for these centers and ranges.
        It is imperative to the warfighter that the Air Guard maintain its
    training superiority. As the warfighting transformation and joint
    operational requirements evolve, it is essential that the airspace and
    range infrastructure be available to support that training.

                                HOMELAND DEFENSE

    Air Sovereignty Alert
        Since September 11, 2001, thousands of National Guardsmen have been
    mobilized to operate alert sites and alert support sites for Operation
    Noble Eagle (ONE) in support of Homeland Defense. Our Air National
    Guard has partnered with Active Duty and Reserve forces to provide
    Combat Air Patrol, random patrols, and aircraft intercept protection
    for large cities and high-valued assets in response to the increased
    threat of terrorist groups. By the end of fiscal year 2003, Air
    National Guard units had assumed 16 of 16 North American Air Defense
    and Northern Command-directed ground alert sites in the Continental
    United States and 1 of 2 alert site locations outside the United
    States. While the Air National Guard has assumed the responsibility of
    all ground alert sites and some irregular Combat Air Patrol periods,
    Active Duty units have shouldered the burden of all regular ``steady-
    state'' Combat Air Patrols. This partnering agreement maximizes our
    nation's current basing locations and capitalizes on the high
    experience levels within the Air National Guard and its professional
    history in Air Defense operations.
        To continue operations at this indefinite pace has posed some
    unique funding and manning challenges for both the field and
    headquarters staffs, especially with the looming two-year mobilization
    limitation and Secretary of Defense's desire to normalize operations.
    Beginning mid-November 2003, many Air National Guard personnel began to
    reach their two years on active duty, causing much concern as to the
    participation of Air National Guard personnel. With the release of the
    fiscal year 2004 President's Budget, the Air National Guard received
    temporary funds to begin transitioning from a mobilized to a ``steady
    state'' force for fiscal years 2004 and 2005. This funding allowed for
    supporting the ASA mission in a new Continuum of Service active duty or
    technician status while at the same time it funded many of our
    facilities, equipment, and MILCON requirements to support the mission
    long-term. Our goal is to have all alert personnel transitioned from
    contingency/mobilized to ``steady state'' Continuum of Service status
    by March of 2004. As we move into the fiscal year 2006 Program
    Objective Memoranda exercise, the active Air Force and Air National
    Guard will continue to work towards a permanent solution for our alert
    force and advocate with the Office of the Secretary of Defense to
    incorporate these temporary Continuum of Service tours into steady
    state programs.

                      TRANSFORMATION FOR THE 21ST CENTURY

    Supporting a ``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's priority is
    Transformation--and therefore it is 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, Joint
    Chiefs-validated, and Combatant Commander-required ``-capabilities.''
        The Air Force is pursuing innovative organizational constructs and
    personnel policies to meld the various components into a single,
    unified force. Ongoing shifts in global conflict and U.S. strategy
    suggest an increasing attention to activities such as homeland defense,
    nation-building, and others that may require different mixes of
    capability that are not necessarily resident at sufficient levels in
    the Active Component alone. This ``Future Total Force'' integration
    will create efficiencies, cut costs, ensure stability, retain
    invaluable human capital, and, above all, increase our combat
    capabilities. One example of this transformational initiative is the
    proposed movement of Air National Guard manpower to Langley AFB, an
    active duty base, from Richmond, an Air National Guard base, with the
    intent of leveraging the high experience of Guard personnel to improve
    the combat capability for the active force.
        Another transformation effort is to ``integrate,'' 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; and integrated
    fighter squadrons realizing the benefits of highly trained personnel
    flying legacy systems during the transition period to newer fighter
    aircraft such as 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
    significant during conflicts envisioned for 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.

    Modernizing for the Future
        The Air National Guard modernization program is a capabilities-
    based effort to keep the forces in the field relevant, reliable and
    ready for any missions tasked by the state or federal authorities. As a
    framework for prioritization, the modernization program is segmented
    into three time frames: short-term, the current and next year's Defense
    budget; medium-term, out to fiscal year 2015; and long-term, out to
    fiscal year 2025 and beyond.
        As the force structure continues to evolve, the Air Guard can
    anticipate a continuous process to ensure the forces provide an
    equivalent capability for Joint and Coalition Forces. The Air National
    Guard remains an equal partner with the Air and Space Expeditionary
    Forces that are tasked to meet the future challenges and missions.
    Because of budget constraints, it is incumbent upon the Air Guard to
    maximize combat capability for every dollar spent. The Air National
    Guard includes all aircraft, ground command and control systems, and
    training and simulation systems in this modernization effort. The
    requirements necessary to focus this effort must be grounded in clearly
    defined combat capabilities and missions. The foundation of our 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 Air Force will be
    stretched to simultaneously fund current operations, modernization, and
    future research and development projects.
        In the near-term, our Modernization Program focuses on the ongoing
    Global War on Terrorism. Theaters of operations range from domestic
    efforts, such as fire-fighting, to full partners in overseas efforts,
    such as Operation Iraqi Freedom and Operation Enduring Freedom. The
    demands of the modern battlefield require the Air Guard weapons systems
    and crews to have identical or equivalent capability as the joint and
    coalition forces. The results of the modernization program were
    graphically demonstrated in both Operation Iraqi Freedom and Operation
    Enduring Freedom as the Block 25/30/32 F-16s, with their laser
    designator LITENING II targeting pods, the Enhanced Position Reporting
    System and Situation Awareness data links became the weapons system of
    choice for the combatant commanders in both theaters. Once air
    supremacy was achieved, the Air National Guard, Air Force Reserve
    Command and active A-10 aircraft became the primary choice in both
    theaters. We fully expect that future threats will continue to evolve
    which will require continued modernization across all weapons systems.
        Here is a summary of the Air National Guard's force posture by
    weapons system:
        The A-10 demonstrated its continued relevance in today's
    battlefield as the Warthog was the dominant weapon when coalition
    forces raced for Baghdad during Operation Iraqi Freedom. Rapid
    integration and installation of the LITENING II laser targeting pod in
    only a few days and subsequent spectacular precision attacks served as
    a model for the future of the A-10. Several other limitations were
    identified to include the need to modernize the aircraft infrastructure
    through the Precision Engagement program. One particular limitation was
    the lack of a tactical data link. The leading candidate in the near-
    term is the Joint Tactical Radio System, with installation scheduled to
    begin in fiscal year 2005. During 2003, the A-10 modernization program
    experienced, increased emphasis including an aircraft modification to
    house the personal locator system, further research into an adequate
    engine replacement, continued testing of the AN/ALR 69 Radar Warning
    Receiver, continued COMET infrared countermeasures pod testing,
    continued acquisition of targeting pods for precision guided munitions,
    and further work for the Precision Engagement program to upgrade the
    aircraft avionics continued development and integration.
        During 2003, the Air Guard F-16s provided crucial combat
    capabilities in Operation Noble Eagle, Operation Iraqi Freedom and
    Operation Enduring Freedom by using advanced targeting pods funded by
    the Air National Guard's Modernization Program for precision-guided
    munitions. The Commercial Central Interface Unit, Color Multifunctional
    Displays, the Heads Up Display Advanced Electrical Unit, the Radar
    Modernized Programmable Signal Processor, the AN/ALR-69 Radar Warning
    Receiver Antenna Optimization, Situational Awareness Data Link and the
    Electronic Attack Upgrade were all part of our successful modernization
    effort. Funding for the Advanced Identify Friend or Foe upgrade was
    secured along with funding for the final engine upgrade kits. The
    Theater Airborne Reconnaissance System continued its spiral development
    to bolster the manned tactical reconnaissance limitation identified by
    the combatant commanders in every after-action report.
        The HC-130 is completing installation of the Forward Looking
    Infrared system, an essential capability during combat rescue
    operations. The HC-130 starts integration and installation of the Large
    Aircraft Infrared Counter Measure system, increasing survivability in
    face of the ever-increasing threat from hand-held missiles.
        The HH-60 program started installation of the new M3M .50 caliber
    door gun, replaced personal equipment for the pararescue jumpers with
    state-of-the-art weapons and technologies. The initiation of the HH-60
    replacement program will begin to slow any further modernization.
        The Operational Support Aircraft Modernization Program leased two
    737 Boeing Business Jets that are supporting current VIP Special Air
    and Joint Operational Support Airlift operations to improve response
    for civilian and military senior leaders. A third aircraft will receive
    full modifications and begin service as the C-40C in September 2004.
        The training and simulation systems ensure the personnel on the
    front line are as ready and relevant as the equipment they use. Over
    the past year, the Air National Guard has begun the transition to the
    Distributed Mission Operations capability leveraging 21st century
    technology with realistic simulation. Useful at every level of
    training, crews acknowledged the edge they gained through mission
    rehearsal on the ground prior to some of the more complex missions.
    Starting with the A-10 and F-16 distributed mission training capable
    flight simulators, the Air National Guard has begun to transform their
    approach to combat training. The modernization of the F-15 includes the
    continued installation of the BOL Infrared countermeasures improvements
    system, continued delivery of upgraded engine kits and completion of
    the installation of the Multifunctional Information Distribution System
    Fighter Data Link. The next upgrades include the installation of the
    new 8 mm recorders, retrofit of a permanent night vision cockpit
    lighting system, continued integration and purchase of the Joint Helmet
    Mounted Cueing System, and the delivery of the replacement Identify
    Friend or Foe system. The conversion from the F-15A/B to F-15C/D begins
    in fiscal year 2005, thereby extending the relevance of the air
    superiority forces in the Air National Guard.
        C-130 enhancements included the multi-command Avionics
    Modernization Program which upgraded nearly 500 aircraft to a modern,
    more sustainable cockpit. Additionally, the Air National Guard
    continued acquisition of the AN/APN-241 Low Power Color Radar,
    continued installation of the Night Vision Imaging System, and 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. Other Air Guard programs include the AN/AAQ-24 (V)
    Directional Infrared Counter-measures System, propeller upgrades like
    the Electronic Propeller Control System and NP2000 eight-bladed
    propeller, and a second generation, upgraded Modular Airborne Fire
    Fighting System. Additionally, the Air National Guard partnered with
    the Air Force for the first multiyear buy of the new C-130J aircraft to
    replace the aging C-130E fleet.
        The KC-135 weapons system completed the installation of the cockpit
    upgrade and continued the engine upgrades to the R-model. The KC-135
    continued to be the air bridge for the multiple combat deployments
    across the globe. Keeping the aging fleet modernized will continue to
    challenge the Air National Guard as the refueling operations evolve to
    meet the next mission. It is critical the aging tanker fleet be
    modernized.
        The Air National Guard Modernization Program is the key to
    continuing to field a relevant combat capability, ensuring dominance of
    American air power for the next 15 to 20 years. We must sustain an open
    and honest dialogue from the warfighter through Congress, in order to
    maximize the investment of precious tax dollars. The modernization
    program is a process, not a goal. Recent combat successes validate that
    process and serve as a model for future transformation of the United
    States Air Force.

    Land Fleet Supports Air Operations
        The Air National Guard Vehicle Priority Buy program cannot 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, 35 percent of the Air National Guard vehicle
    fleet is due for replacement, at a cost of approximately $262 million.
        The Air National Guard vehicle fleet will continue to age and
    become more costly to maintain. The less-than-adequate replacement rate
    coupled with additional requirements to support newly emerging homeland
    security tasking will severely impact our vehicle readiness.
    Military Personnel Transformation--30 Years After ``Total Force''
        The Air National Guard is partnered with the Air Force in multiple
    transformation initiatives that will affect the Total Force. These
    initiatives, tied with the Office of the Secretary of Defense's new
    paradigm--Continuum of Service--will necessitate simplifying the
    processes and rules that are now in place. Continuum of Service is a
    transformation for personnel management that is needed to acknowledge
    the changes that have occurred in the way Reserve Component members are
    now employed in the full range of operational worldwide missions. This
    transformation will require changes in legislation and the commitment
    of the military services. Although there is an increased spirit of
    volunteerism, and retention remains strong despite the increase in
    calls for federal and state service, a more integrated approach to
    military personnel management is imperative. The integration that is
    required presents a challenge in military personnel life cycle
    management. The Guard's Directorate of Diversity, Personnel, and
    Training, the stewards of the force, will ensure Continuum of Service
    policies have the flexibility to manage the force separately, so
    Guardmembers have a reasonable opportunity to compete for promotion.
        One of the business operations targeted by the Secretary of the Air
    Force for transformation is the manner in which the Air Force delivers
    human resource services to its customers. The transformation of these
    business operations will achieve the Air Force Secretary's objectives
    by shifting from the current labor-intensive, transaction-focused
    customer service delivery system to a ``strategic partner'' role. The
    ultimate goal is the creation of a customer-focused, mission-driven
    Total Force service-based delivery system. The system will be leveraged
    by technology that provides effective, efficient and timely services,
    while freeing human resource professionals to advise commanders on the
    development and management of their personnel. The Air Guard is
    committed to the Secretary's vision and goals for Customer Service
    Transformation while, at the same time, ensuring Air National Guard
    members have access to the human resource services which are vital to
    effective career management.
        The Air National Guard supports the transformational vision of the
    Chief of Staff of the Air Force for a more deliberate approach in
    developing a force development construct. This entails a Total Force
    concept that incorporates the way the Air Force trains, educates,
    promotes, and assigns the Total Force--Active, Guard, Reserve, and
    Civilians. The newly published Air Force Policy Directive 36-26
    represents a radical departure from the current educational and
    assignment culture. The newly published directive emphasizes a
    flexible, capabilities-based, Total Force approach that fulfills the
    professional and personal expectations of our Airmen, while still
    meeting mission requirements.
        One aspect of the Force Development construct is ensuring
    implementation of the Air National Guard's national diversity strategy.
    The purpose of the diversity strategy is to increase mission readiness
    in the organization by focusing on workforce diversity and assuring
    fair and equitable participation for all. Finally, the Air National
    Guard has developed a Formal Mentoring Initiative that is ready for a
    nation-wide rollout. This program will be a key component in the
    professional development of Air National Guard members.

    Information Networking for the Total Force
        The Air National Guard Enterprise Network is critical to the
    successful transmission of information within a unit, between units,
    and among the various states. We are making progress towards
    modernizing our nationwide information technology network that serves a
    vital role in homeland security and national defense. A healthy and
    robust network for reliable, available and secure information
    technology is essential to federal and state authorities in their
    ability to exercise command and control of information resources that
    potentially could impact their various constituencies. The effective
    functioning of the Air National Guard relies upon a strong interface
    and interaction within the network to share information at all levels.
        The Air National Guard continues to make 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.
        The Air National Guard has completed a nationwide consolidation of
    network servers by consolidating core network services to regional
    operations centers, and we continue to provide high quality Information
    Technology services. At the same time, we continue to reduce redundant
    and obsolete systems and programs.
        The current initiative to provide better communications to our
    warfighters is our initial roll-out of Microsoft's Active Directory
    Services. These services will provide enhanced security and broader
    communications capabilities to our users, and more closely integrate
    our network with Air Force and other Service networks, thereby
    increasing both security and communications capability. We hope to fund
    the remaining roll-out in fiscal year 2004 and begin follow-on programs
    that will reduce the time required to maintain server and desktop
    hardware, as well as help manage the software upgrades and security
    patches so critical to our network's security.
        Greater emphasis must be placed on maturing the Air National Guard
    Enterprise Network. 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 Guard network has typically been supported
    at the same level it was during the 1990s. Without a significant
    infusion of new technology, all other Air National Guard mission areas
    will be less than fully capable of executing their missions. This
    modernization initiative will certainly enhance the Air National
    Guard's interoperability with other federal and state agencies.

    Preserving Facility Operations
        Air National Guard Civil Engineering is proud of its management
    record of constraining infrastructure and operating costs while
    providing quality installations responsive to the nation's needs. This
    focused business concept limits direct investment to core
    responsibilities to better balance component, service, and department
    resources with other risk areas.
        Civil Engineering demonstrates the balance between cost-effective
    and responsive infrastructure by operating a lean facility plant,
    relying on contractors for most facility work, and leveraging with the
    states and the traditional Guard member structure to reduce costs.
        Facility space at the typical Air National Guard installation
    averages only 350,000 square feet constrained to operational, training
    and administrative space on 150 acres of leased property. Air National
    Guard installations do not have the extensive support facilities
    typically present on active component bases, such as dormitories, golf
    courses, family housing, hospitals, child-care facilities, schools,
    youth centers, commissaries or main exchanges. Instead, Guard members
    leverage this quality of life support through the community. Additional
    cost containment is realized by the joint-use of runways and taxiways
    that are typically owned by the local civilian airport authority and by
    property leases at nominal or no cost.
        A small federal workforce of 7 to 10 predominantly civilian
    employees executes the facility operations and maintenance program
    through a contract and state employee workforce. This small full-time
    workforce is built around the Base Civil Engineer, an assistant, a
    facility manager and a production controller. About 15 state employees
    provide maintenance service for day-to-day requirements while larger
    non-routine maintenance, repair and construction, where most investment
    is made, are accomplished through contracts as needed. Twenty-four
    state employee firefighters provide crash, fire and rescue service when
    not provided by the local civilian airport authority.
        Base operational costs are further leveraged by state
    contributions. Specifically, states are required to provide matching
    funds for services such as utilities, custodial, trash, grounds
    maintenance and snow removal. This contribution typically ranges
    between 15 and 25 percent of the total cost of the requirement.
    Additionally, Civil Engineer and Services ``outsource'' its military
    capability, with personnel fulfilling traditional part-time roles, and
    thus avoiding full-time costs except when needed for wartime or
    deployment requirements. The Air National Guard Prime Base Engineer
    Emergency Force or PrimeBEEF force has been covering 30 percent of the
    total Air Force engineering wartime and deployment requirement, while
    the Prime Readiness in Base Services or Prime RIBS team has been
    covering 40 percent of these requirements.
        Civil Engineer management controls costs to help keep the Air
    National Guard and its military presence in the community. National
    Guard facilities and personnel assigned to local units are the primary
    connection most Americans have with the military since a large number
    of active duty bases were closed during the 1990s. This community
    presence provides cost-effective platforms for recruitment and
    retention by being close to where Guard members work and live.
    Correspondingly, the Air Guard's efficient infrastructure and
    management structure helps the National Guard and the Department of
    Defense to balance resources with other areas of risk as they continue
    to transform military capabilities.

    Redesigning Financial Management Systems
        The Air National Guard Financial Management community is actively
    participating in the coordination of the Office of the Secretary of
    Defense Business Management Modernization Program and the Air Force
    Financial Management Transformation efforts.
        This will ensure our future systems and procedures comply with the
    Defense Business Enterprise Architecture. The Air Guard's efforts
    include: Adopting standard business practices and systems to enhance
    the accountability and accuracy of financial management transactions;
    and replacement of non-compliant financial management systems with web
    applications that fully support the defense architecture and the Chief
    Financial Officers Act of 1990.
        This is particularly evidenced by our efforts to transform and
    modernize the management of the Air National Guard Military Personnel
    Appropriation through the future implementation of the Reserve Order
    Writer System, a candidate to become a joint system that will bring the
    latest advances in technology and military orders information to
    Guards-members in the convenience of their homes around the clock.

                                   CONCLUSION

        The Air National Guard will continue to defend the nation in the
    War on Terrorism while transforming for the future. We will do this
    across the full spectrum of operations in both the Expeditionary and
    Homeland Defense missions. The Air National Guard will also continue to
    leverage our militia culture and linkage to the community that is vital
    to our nation. The men and women of the Air Guard are currently serving
    proudly in the far corners of the globe--and here at home--and will do
    so with distinction with the necessary tools to protect our freedoms.
                                     ______

       Prepared Statement of Major General Paul J. Sullivan, Vice Chief,

                             National Guard Bureau

                                    OVERVIEW

        The most exciting changes occurring in the National Guard today are
    in the areas of Transformation, Jointness and Homeland Defense. The
    initiatives begun in 2003 to bring the National Guard fully into the
    Goldwater-Nichols era of jointness are already transforming the way we
    do business in the highest echelons of the Department of Defense, out
    in the states, and around the world where our Soldiers and Airmen are
    protecting our nation from harm.
        Transforming our headquarters to a joint structure provides greater
    interoperability with combatant commands, especially with U.S. Northern
    Command, U.S. Southern Command, and U.S. Pacific Command. It also
    increases our ability to interface with the Department of Defense and
    the Joint Staff on issues of Homeland Defense, Homeland Security, and
    Military Assistance to Civil Authorities. In summary, this will allow
    the Guard to operate on the same basis as the rest of the Defense
    Department.
        The year 2003 marked the beginning of our journey. There are many
    more tasks to accomplish before we have fully implemented our
    transformation campaign plan.
        The National Guard Bureau completed the initial stage of its
    transformation to a joint staff during the summer of 2003. In revising
    the staff structure, we attempted to mirror as closely as possible the
    structure of the Joint Staff in the Pentagon, thus facilitating closer
    coordination between the two to the maximum degree possible.
        The Bureau is extensively reorganizing its manpower to perform
    staff functions that had never been addressed outside of the single-
    service focus of the Army National Guard and Air National Guard
    Directorates. The new joint Directorates of Logistics and Intelligence
    are prime examples of the Bureau expanding its vision and capabilities
    so that we can fully engage in interservice and intergovernmental
    efforts to protect the nation at home and abroad.
        The expansion of the National Guard Bureau's roles and missions in
    the joint arena must still be validated by the Secretary of Defense and
    the Joint Staff.
        The transformation to a joint Headquarters at the National Guard
    Bureau is being paralleled by a similar transformation in the states.
    The new Standing Joint Force Headquarters, State, are being designed to
    parallel the configurations of the National Guard Bureau, the Joint
    Staff, and the Combatant Commands. The States have been given
    flexibility to apply their human and financial resources to the joint
    configuration to address their unique needs, while centralizing each
    governor's ability to leverage both homeland security and state mission
    capabilities in the event of a local emergency.
        Every Joint Force Headquarters, State will provide a standing Joint
    Force Command and Control capability that will allow a combatant
    commander to accurately monitor an incident, provide supporting forces,
    or command federal forces, including federalized National Guard forces,
    in support of the civilian incident commander. This coordination
    between state and federal authorities will be aided by the creation of
    a robust command, control and communications backbone. We have proposed
    a Joint CONUS Communications Support Enterprise initiative that will
    provide a common, secure means through which they can coordinate their
    response for any domestic emergency. Upon completion of these
    transformational initiatives, the ability of both civil and military
    authorities to secure and defend the homeland will have increased
    exponentially.
        In 2003, under the direction of Lieutenant General H Steven Blum,
    the Bureau asserted that joint duty billets and joint educational
    opportunities should be extended to the National Guard. The Defense
    Department is currently considering plans that will allow members of
    the reserve components, for the first time in history, to benefit from
    the opportunities provided by Joint Professional Military Education.
    The broad-based implementation of this training in years to come will
    be critical to achieving our goal of fully integrating the National
    Guard system with the Department and the combatant commands.
        In organizing itself for the future, the National Guard Bureau,
    together with the National Guard headquarters in every state and
    territory, is transforming to become a member of the joint team. The
    War on Terror demands this capability from us; indeed, we are already
    serving in this capacity in our day-to-day interactions with the Office
    of the Secretary of Defense, with the Joint Staff, and with the
    combatant commanders. It is our responsibility to ensure that this
    transformation to jointness reaches full operating capability by
    October 2005.

                             SUPPORT THE WAR FIGHT

    State Partnership Program
        The National Guard State Partnership Program links states and
    countries for the purpose of improving bilateral relations with the
    United States. The value of this program is its ability to focus the
    attention of a small part of the Department of Defense--a state
    National Guard--with a single country or region in support of our
    government policies. The program's goals reflect an evolving
    international affairs mission for the National Guard. In addition, the
    National Guard promotes regional stability and civil-military
    relationships in support of U.S. policy objectives. The State Partners
    actively participate in a host of engagement activities including
    bilateral familiarization and training events, exercises, fellowship-
    style internships, and civic leader visits. All activities are
    coordinated through the theater combatant commander and the U.S.
    ambassadors' country teams, and other agencies, as appropriate, to
    ensure that National Guard efforts are tailored to meet both U.S. and
    country objectives. This program increases exposure of Guard personnel
    to diverse cultures in regions where they may be deployed in the
    future.
        During 2003, nine new partnerships--Kansas-Armenia; Maryland-
    Bosnia; Puerto Rico-Dominican Republic; New York-South Africa;
    Wisconsin-Nicaragua; Utah-Morocco; Alaska-Mongolia; Florida-Guyana; and
    Virginia-Tajikistan--were formed. The Colorado-Jordan partnership was
    announced in March 2004. Currently thirty-nine U.S. states, two
    territories, and the District of Columbia are partnered with forty-five
    countries around the world, and last year alone more than 300 events
    took place between the partners. In fiscal year 2004 and beyond, it is
    our goal to expand the program to include increased interaction at the
    action officer and troop level will enable the partners to develop more
    hands-on events.
        The State Partnership Program is also invaluable for our own
    homeland security. As we interface with countries that, on a daily
    basis, live with a terrorist threat in their own back yard, we learn
    the tactics and techniques that they employ to thwart attacks on their
    civilian population. Conversely, the countries learn some of the
    capabilities and techniques employed by not only the Department of
    Defense, but by our civilian organizations at both a federal and state
    level that are in use to protect our homeland. It is through this
    cooperative exchange of vital information that we ultimately protect
    our homeland by pushing our borders outwards and creating an atmosphere
    of mutual support and collaboration.

    Full-Time Support
        The Active Guard and Reserve and Military Technician programs are a
    major asset for the National Guard and are essential to organizational
    readiness. Governed by USC Title 32, these full-time personnel are
    uniformed members who perform day-to-day responsibilities for a unit,
    who train with traditional Guardmembers in that unit, and who are
    available for mobilization or deployment when the unit is called to
    active duty.
        The heightened pace of operations, however, has put a strain on
    normal procedures, particularly for the military technician force.
    National Guard technician deployments in support of ongoing contingency
    operations involved approximately 16 percent of the technician
    workforce. This resulted in an increased demand for personnel actions
    to support technician separation and leave of absence actions,
    entitlements counseling, and backfill of positions in order to continue
    accomplishing essential full-time functions like payroll processing and
    equipment maintenance. In order to expedite the increased demand for
    backfill, the previously authorized emergency hiring flexibilities were
    expanded and extended for another year. These flexibilities provided
    streamlined hiring processes for affected states.
        The deployment of large numbers of military technicians with their
    units, while beneficial to the overall mission, created funding
    challenges for the program. Under current Uniformed Services Employment
    and Reemployment Rights laws, absence of technicians from their
    positions due to service in the armed forces does not result in absence
    of costs for agencies employing those technicians. The National Guard
    was still responsible for costs associated with stay-behind missions,
    such as maintaining armories and equipment, and the congressional
    legislation that employee and employer health benefit costs for
    technicians be paid for up to 18 months during mobilization. Therefore,
    residual costs incurred from health benefit costs, costs associated
    from backfilling mobilized technicians, outsourcing expenses, and other
    issues resulted in increased funding challenges during 2003.

    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.
        Not since World War II have so many Guardmembers been deployed to
    so many places for such extended periods of time. The role and support
    of the family is critical to success with these missions. The National
    Guard Family Program has developed an extensive infrastructure to
    support and assist families during all phases of the deployment
    process. There are more than 400 National Guard Family Assistance
    Centers located throughout the fifty-four states, territories and the
    District of Columbia. These centers provide information, referral, and
    assistance with anything that families experience during a deployment.
    Most importantly, these services are for any military family member
    from any branch or component of the Armed Forces.
        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
    deployment, pre-mobilization, mobilization, and reunion. The Family
    Program office provides support to program coordinators through
    information-sharing, training, volunteer management, workshops,
    newsletters, family events, and youth development programs, among other
    services.
        The greatest challenge lies in awareness and communication. The
    feedback we receive indicates that many family members are unaware of
    the many resources available to them during a period of active duty or
    deployment. Our primary goals are to increase the level of awareness
    and participation with existing family resources, and to improve
    overall mission readiness and retention by giving our warfighters the
    peace-of-mind of knowing that their families are well cared for.

    Employer Support of the Guard and Reserve
        The National Guard Bureau renewed its partnership with the National
    Committee, Employer Support of the Guard and Reserve. The Chief,
    National Guard Bureau, reinforced this commitment with his decision to
    authorize 54 positions for the states, District of Columbia, and
    territories to augment retention initiatives within all seven of the
    reserve components. A new initiative in fiscal year 2004 is a national
    level contract that provides the states with additional personnel and
    puts the Employer Support program on a parallel track with the National
    Guard's Family Program. These two programs are intended to dovetail,
    and reflect our increased efforts to address the impact of
    mobilizations on employers and families.

    Youth ChalleNGe Program
        The award-winning National Guard ChalleNGe program is a community-
    based program in twenty-nine sites that leads, trains, and mentors at-
    risk youth to become productive citizens. 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.
        A national model since 1993, the twenty-five states and territories
    that offer the program have graduated more than 48,000 young men and
    women who leave equipped with the values, skills, education and self-
    discipline necessary to succeed as adults in our society.
    Significantly, although many ChalleNGe candidates are from at-risk
    populations, over 70 percent of them have attained either a General
    Equivalency Diploma or a high school diploma. Furthermore,
    approximately 30 percent of all graduates choose to enter military
    service upon graduation. While the General Equivalency Diploma
    attainment is over 66 percent, and the graduation rate is above 90
    percent, the National Guard seeks to improve the results in both areas.
        The National Guard is ``Hometown America'' with deep roots in every
    community. The strong community ties make the National Guard a highly
    visible and effective entity in many towns and communities across the
    United States. 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. The
    ChalleNGe program pays for itself with the savings realized from
    keeping young people out of jails and off welfare roles. In fact, these
    same young people are more prone to become productive, tax-paying
    members of their communities. The program saves $175 million in
    juvenile corrections costs, while lowering the percentage of youth who
    are on federal assistance from 24 percent to 10 percent. The results
    are that a ChalleNGe program actually makes money for the tax dollars
    spent.

    Drug Interdiction and Counterdrug Activities
        In 1989, the Congress authorized the National Guard to perform drug
    interdiction and counterdrug activities under Section 112, Title 32 of
    the United States Code.
        This domestic counterdrug effort falls into two general areas:
    supporting community-based drug demand reduction programs and providing
    support to help law enforcement stop illegal drugs from being imported,
    manufactured and distributed. Approximately 2,600 personnel in Title 32
    status work with the programs, while at the same time maintaining their
    wartime military skills and unit readiness.
        The mission of the Drug Demand Reduction program organizes and
    expands community efforts to form coordinated and complementary systems
    to reduce substance abuse. The Guard's primary focus is on community
    mobilization and assistance to neighborhood groups. We assist these
    groups in setting goals and objectives and building neighborhood
    strength and resiliency that provide alternatives to drugs and drug-
    related crime. In fiscal year 2003, National Guard members were able to
    reach an audience of over 4.7 million students and family members with
    an anti-drug message.
        Supply reduction activities stem the flow of illegal drugs into the
    United States. The National Guard performs a variety of counterdrug
    missions in direct support of local, state, and federal law
    enforcement. The types of support provided are diverse, but focus
    primarily on intelligence analysis and investigative case support.
    Activities also include linguist support, surface and aerial
    reconnaissance and observation, as well as communications and engineer
    support. We provide unique military-oriented skills so the program acts
    as a force-multiplier for law enforcement agencies.
        As part of the supply interdiction mission, the National Guard
    provides airborne support to the domestic effort through the
    Counterdrug Reconnaissance and Aerial Interdiction Detachment program
    and the C-26 Sherpa program. These programs employ Kiowa helicopters
    and Sherpa aircraft to detect and track targets identified by law
    enforcement agencies. These aircraft have been specially modified with
    thermal imaging equipment, night vision devices, and high-tech
    communications equipment. Currently, we operate 116 Kiowa helicopters
    distributed among thirty-seven states; while eleven states each have a
    single Sherpa aircraft for these efforts. Recently, several of the
    Sherpa assets have been tasked to support overseas missions in support
    of U.S. Southern Command.
        In fiscal year 2003, National Guard support efforts led to 66,395
    arrests and assisted law enforcement in seizing the following:

    ------------------------------------------------------------------------
    Cocaine...............................  665,179 pounds
    Crack Cocaine.........................  61,713 pounds
    Marijuana eradicated..................  2,232,693 plants
    Marijuana (processed).................  1,251,182 pounds
    Methamphetamines......................  26,077 pounds
    Heroin................................  6,475 pounds
    Ecstasy...............................  387,616 pills
    Other/Designer Drugs..................  14,600,274 pills
    Weapons...............................  10,260
    Vehicles..............................  76,349
    Currency..............................  $192,607,004
    ------------------------------------------------------------------------

        Due to the tremendous successes of the Guard's training programs,
    and the growing need for more specialized training, the Guard operates
    five congressionally authorized training academies that provide
    counterdrug training for both law enforcement and community officials.
    These programs are open to both civilian and military personnel, and
    these no-cost courses provide training in both supply interdiction and
    drug demand reduction.
        Finally, to help ensure a drug-free workplace, the National Guard
    administers and oversees a Substance Abuse Prevention Program. All
    members of the National Guard are subject to random, unannounced
    testing throughout the year. Additionally, members in certain
    specialties or job categories are subject to mandatory testing each
    year. In fiscal year 2003, we performed more than 225,000 drug tests.
    This testing helps ensure that the National Guard force is fit and
    mission-ready.

                                HOMELAND DEFENSE

    National Guard Reaction Force
        The National Guard has nearly 368 years of experience in responding
    to both the federal government's warfighting requirements, and the
    needs of the states to protect critical infrastructure and to ensure
    the safety of local communities. In an effort to improve the capability
    of states to respond to threats against critical infrastructure within
    their borders, the Chief of the National Guard Bureau has asked each
    Adjutant General to develop a Quick Reaction Force capability. The goal
    is to have a trained and ready National Guard force available to the
    governor that can respond in support of local, state and, when
    required, federal agencies. The Guard Bureau has been coordinating with
    the states and territories to identify current response capabilities,
    as well as working with Northern and Pacific commands to ensure that
    these capabilities are understood and incorporated into their emergency
    response plans. Work is underway to identify additional requirements
    for force protection and interoperability with civil responders. This
    reaction force is not a new capability or concept. What is new is the
    standardized training and mission capabilities being shared by all
    states, territories, and the District of Columbia.

    Full Spectrum Vulnerability Assessment
        The Full Spectrum Vulnerability Assessment program is a new
    National Guard Homeland Defense initiative in which each state and
    territory has a team of Soldiers or Airmen trained to conduct
    vulnerability assessments of critical infrastructure in order to
    prepare and plan emergency mission response in the event of a terrorist
    attack or natural disaster. This program is designed to execute the
    pre-planning needed for emergency response; to educate civilian
    agencies on basic force protection; to develop relationships between
    emergency responders, owners of critical infrastructure and National
    Guard planners in the states; and deploy traditional National Guard
    forces in a timely fashion to protect that infrastructure. In
    developing this concept, the Guard Bureau has worked with the office of
    the Assistant Secretary of Defense for Homeland Defense to establish
    policies and standards. During 2004, we plan to have six of these teams
    trained to conduct vulnerability assessments. Through this initiative,
    the National Guard continues its time-honored tradition of being
    prepared to respond at a moment's notice in defense of America.

    Weapons of Mass Destruction Civil Support Teams
        The National Guard continues to strengthen its ability to respond
    to chemical, biological, radiological, nuclear, and high-yield
    explosive events. Since September 11, 2001, the existing thirty-two
    teams have been fully engaged in planning, training and operations in
    support of state and local emergency responders. Civil Support Teams
    are designed to provide specialized expertise and technical assistance
    to an incident commander by identifying chemical, biological,
    radiological, or nuclear substances; assessing the situation; advising
    the commander on potential courses of action; and assisting 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 U.S.C. Title 32 status. The National Guard
    Bureau provides logistical support, standardized operational
    procedures, and operational coordination to facilitate the employment
    of the teams and to ensure back-up capability to states currently
    without a team.
        During fiscal year 2003, teams responded to seventy-four requests
    for support from civil authorities for actual or potential incidents.
    Teams from Texas, Louisiana, Oklahoma, Arkansas, and New Mexico also
    provided valuable support in response to the Columbia space shuttle
    disaster during February 2003.
        In accordance with Congressional and Defense Department direction,
    the National Guard will add twenty-three new teams, beginning with
    twelve in 2004, so that each state, territory, and the District of
    Columbia will have at least one team. Another four teams will be added
    in 2005, with four more in 2006, and the remaining three in 2007.
        In order to continue to be the best possible resource to the
    emergency responders they assist, it is vital that these teams continue
    to be equipped with state-of-the-art technology and trained to the
    highest possible level. To accomplish this, the teams must remain a
    high priority for resourcing at all levels of the Department of
    Defense.

    Chemical, Biological, Radiological, Nuclear, and High-Yield Explosive
            Enhanced Response Force Package
        After the terrorist events of September 11th, the protection of
    personnel and resources has greater urgency and the potential for
    response to civil authority is greater than ever. Local, state and
    federal agencies are applying tremendous resources to improve their
    Weapons of Mass Destruction response capabilities. To enhance the
    National Guard capability, the National Guard Bureau has developed an
    initiative to equip and train units in twelve states to provide a
    Chemical, Biological, Radiological, Nuclear, and High-Yield Explosive
    regional response. This force will augment the Civil Support Teams and
    will provide emergency responders with a follow-on, task force-oriented
    structure that will help secure the incident site, support mass
    casualty decontamination operations in or near contaminated
    environments, and provide for casualty search and extraction. Included
    in this response force package is platoon-sized security, medical,
    decontamination, and technical search and extraction teams. These
    personnel are expected to respond to an incident on short notice in
    either state active duty or U.S.C. Title 32 status. The new teams are
    expected to be trained and ready to respond by October 2004.

    Intelligence for Homeland Security
        During the 2003 transformation to a joint staff structure, the
    Guard Bureau broke new ground by organizing for the first time in its
    history an Intelligence Directorate. The draft mission statement
    designates the directorate as the primary advisor to the Chief,
    National Guard Bureau, Deputy Chiefs, and the Adjutants General of the
    fifty-four states and territories for all intelligence-related matters.
    With the focus on improving threat awareness for the Guard's Homeland
    Security mission, the immediate goal has been to efficiently maximize
    information-sharing between the Guard and Defense Department, the
    combatant commands, particularly U.S. Northern Command and U.S. Pacific
    Command, the Department of Homeland Security, and national-level
    intelligence agencies. Concurrently, this new directorate is taking the
    lead in establishing a common operating system for intelligence that
    will provide a standardized intelligence picture that gives each
    participant the same level of situational awareness and allows sharing
    of information and intelligence across a single system, thus aiding the
    decision-making process.

                      TRANSFORMATION FOR THE 21ST CENTURY

    Transformation to a Joint National Guard Bureau
        In May 2003, the Chief, National Guard Bureau, announced his vision
    to transform the Bureau into a Joint National Guard Bureau that
    encompasses both its federal and state missions. In July 2003, the
    Chief provisionally organized the Bureau's manpower resources into a
    joint staff.
        In late July 2003, the Office of the Secretary of Defense
    recognized the changing roles of the National Guard, both in its
    federal and state relationship, and indicated support of the Bureau as
    the national strategic focal point for National Guard matters.
    Secretary of Defense Rumsfeld further suggested greater ties with his
    office, the Joint Staff, and the Departments of the Army and Air Force
    in support of combatant commanders. The Secretary encouraged the
    development of proposals to forge a new relationship, one which would
    improve his office's access to National Guard capabilities and improve
    the ability of the National Guard to operate in the joint environment
    and other military matters. The primary interest for the Chief,
    National Guard Bureau is the Area of Responsibility of all combatant
    commanders whose plans include or affect, or will likely include or
    affect, federalized or non-federalized National Guard units or
    personnel. As such, the Bureau supports U.S. Northern Command, U.S.
    Pacific Command, U.S. Strategic Command, and the states and territories
    in developing military strategy and contingency plans for homeland
    defense and civil support operations. It further supports all of the
    combatant commanders in developing joint operational requirements for
    Theater Security Cooperation, and War and Contingency Plans.
        The Bureau is recommending its recognition, in both law and policy,
    as a joint activity of the Department of Defense, as well as a joint
    bureau of the Departments of the Army and the Air Force, with both
    joint and Service responsibilities. This joint initiative is projected
    to achieve full operational capability and validation from the
    Secretary of Defense and the Joint Staff by fiscal year 2005.

    Joint Force Headquarters, State
        On October 1, 2003, the Chief approved provisional operation of the
    Joint Force Headquarters in each of the fifty-four states, territories,
    and the District of Columbia. Transformation of the previously separate
    Air and Army National Guard Headquarters will continue through fiscal
    year 2006.
        The Joint Force Headquarters of each state, territory, Puerto Rico
    and the District of Columbia exercises command and/or control over all
    assigned, attached or operationally aligned forces. It acts as a
    standing, deployed joint force headquarters, within the geographic
    confines of the state/territory/commonwealth or district; it provides
    situational awareness of developing or on-going emergencies and
    activities to federal and state authority. As ordered, the Joint Force
    Headquarters, State provides trained and equipped forces and
    capabilities to the services and the Combatant Commanders for federal
    missions. The Joint Force Headquarters, State supports civil authority
    with capabilities and forces for homeland security and/or domestic
    emergencies.
        The Bureau is working to obtain Joint Staff approval for
    integration of this headquarters organization into the joint manpower
    process, specifically through submission of a Joint Table of
    Distribution, along with supporting documentation, by September 30,
    2004.

    Joint Professional Military Education
        Joint Professional Military Education is the key to integrating the
    staffs of the fifty-four newly-created and the National Guard Joint
    Staff with the rest of the Defense Department. Credit for performance
    of joint duty is also a key factor in determining promotions in the
    active component, and increasingly within the reserve components as
    well. For this reason, in order to make the Bureau competitive with
    other joint duty assignments, ceilings for Joint Specialty Officer
    billets must be raised and billets must be allotted to the Guard. Guard
    officers also need increased access to resident Phase 2 Joint
    Professional Military Education. We are actively working with the Joint
    Staff in the Pentagon to explore ways of using the Guard's extensive
    Distance Learning facilities to expand Joint Professional Military
    Education opportunities to members of the military, regardless of
    service or component.

    Reserve Joint Staff Duty at National Guard Bureau
        One of the Chief's early initiatives while meeting with the other
    reserve component chiefs was to obtain input and support for exchanging
    officers to serve on each other's staffs. This added capability is
    intended to assist in planning for the homeland security mission by
    sharing at an early stage a better understanding of the roles and
    specific security missions assigned to each component. For the first
    time in its 100-year history, Navy and Marine Corps Reserve officers
    are now serving as part of the Bureau staff, and Guard officers, in
    turn, have been assigned to their staffs. Similar exchanges are planned
    with the Coast Guard Reserve. These pioneers in the reserve joint staff
    arena are field grade officers currently assigned to the Operations and
    Plans and Policy equivalent directorates for a two-year period.
    Joint Continental U.S. Communications Support Enterprise
        Under Section 10501(b), U.S.C. Title 10, one of the purposes of the
    National Guard Bureau is ``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, between the
    Department of the Army and the Department of the Air Force, and the
    several states.'' Therefore, an obvious role for the National Guard is
    to provide an interface for communications between federal and state
    agencies with regard to incidents involving homeland security. There is
    a requirement for U.S. Northern Command, as well as other federal
    agencies, to have ``continuous situational awareness'' of incidents
    occurring in the states related to homeland security and the associated
    activities of the National Guard while acting under the states'
    control.
        To meet these requirements, the Bureau has established a
    communications enterprise concept that meets the new homeland defense
    challenges and leverages the advantages of the National Guard's
    constitutional dual status under the state and federal governments. The
    proposed communications enterprise is the state-federal network
    connectivity concept named the Joint Continental United States
    Communications Support Enterprise.
        This enterprise will involve national level management and
    integration by the Bureau of long haul, tactical, and other service
    capabilities to provide U.S. Northern Command, Pacific Command and the
    Joint Force Headquarters, State with connectivity to and through state
    networks to an incident site. The enterprise includes the establishment
    of a National Guard Bureau Joint Operations Center; a state joint
    headquarters communications element; net-centric connectivity state-to-
    state; vertical connectivity to incident sites, including a wireless
    capability; and a National Guard Homeland Security Communications
    Capability.
        In 2003, the Bureau took the first step by establishing a Joint
    Operations Center, and the Standing Joint Force Headquarters in each
    state are in the process of establishing a dedicated communications
    element. Planning and resourcing for the remaining program phases are
    ongoing.

    National Guard Enterprise Information Technology Initiatives
        The National Guard continues to move aggressively in using
    information technology to support our warfighters and our missions at
    all levels, including Homeland Security and Homeland Defense. These
    initiatives are being implemented with an approach that is geared
    towards the National Guard Enterprise. Some examples of these
    initiatives from the past year include using Guard telecommunications
    resources, specifically distributed learning classrooms and video
    teleconferencing assets, to link Civil Support Teams in thirteen
    states. These resources have been used to provide critical pre-
    deployment support for warfighters and their families. For example, at
    Indiana's Camp Atterbury mobilization site, readiness training was
    conducted for Soldiers during the day, and in the evenings, a ``Cyber
    Cafe'' was established where Soldiers checked e-mail and military
    accounts, took care of personal matters, and communicated with family
    members. During March and April 2003, nearly 10,000 Soldiers logged
    more than 327,000 minutes at this facility, providing substantial
    training efficiencies, but just as importantly, it was a great boost to
    Soldier and family morale. These same assets are currently being used
    throughout the organization to facilitate command and control for
    readiness of operating forces at levels never before available. Other
    examples are spread across the country, where Guardsmen are using newly
    provided capabilities to improve efficiency, effectiveness and morale.
        Another initiative is the development of the Virtual Mission
    Preparation capability. This is being used as a prototype to provide a
    web-based, portal technology that delivers the capability to portray
    real-time status of units and their overall mobilization readiness down
    to the individual Soldier level. It was developed in Pennsylvania in
    support of the 28th Division's rotation to Bosnia, and is now being
    applied to Operation Iraqi Freedom, and to the 56th Stryker Brigade of
    the Pennsylvania Army National Guard. Virtual Mission Preparation
    provides functionality that has application across the Army National
    Guard to improve deployability, as well as the capability to meet Army,
    Defense Department and emergency response mission requirements.
        The Bureau, through initiatives managed by the Communications
    directorate and the Chief Information Officer, is ensuring that the
    vision of supporting the warfighter and transforming the Guard is
    supported through an approach that casts off the old lock-step, stove-
    pipe method to Information Technology and moves to a truly
    interconnected, net-centric information sharing capability.

    Transforming the Mobilization and Demobilization Process
        Today's global environment does not allow for the luxury of time
    that our current Cold War era-mobilization process requires. The
    modern, smaller, all volunteer military needs access to the reserve
    components within days or weeks--not months.
        The U.S. Joint Forces Command was tasked by the Secretary of
    Defense to coordinate the development of a more agile and responsive
    process to mobilize units and individuals within the reserve
    components. As a result of this tasking, the command established
    ``Tiger Teams'' that consisted of subject matter experts from the
    reserve and active components, defense agencies, and the Joint Staff to
    study the mobilization process and make recommendations.
        The Bureau fully participated in the workshops, endorsed the
    recommendations of these teams, and is working closely with the U.S.
    Joint Forces Command to improve the readiness and accessibility of the
    National Guard for its federal mission. In order for this to occur, the
    reserve components must be funded at a higher level of readiness and
    the mobilization process must be updated so that the efficiencies of
    automation and training during the course of the year can be
    capitalized upon.
        The lead agency within the Bureau for this effort is the newly-
    organized Directorate of Logistics. They are the point of contact for
    all coordination and inquiries by the Office of the Secretary of
    Defense and combatant commands regarding logistical and mobilization
    matters as they relate to the National Guard. In the past, the Army and
    the Air National Guard had no Bureau-level counterpart to interface
    with the Office of the Secretary of Defense or with joint commands. The
    joint Directorate of Logistics fills this void and is designed to
    strengthen the interoperability of the Bureau with the other services
    and components.
        In addition to spearheading our efforts to reform the mobilization
    and demobilization process, the directorate is an active member of a
    newly formed multi-government agency committee of senior logisticians
    that is chartered to develop a National Logistics Strategy to support
    the National Response Plan. The group is working with U.S. Northern
    Command to identify all logistics sources to support Homeland Defense
    and Homeland Security needs.

        Senator Stevens. General Schultz.

    STATEMENT OF LIEUTENANT GENERAL ROGER C. SCHULTZ,
                DIRECTOR, ARMY NATIONAL GUARD
        General Schultz. Thanks, Mr. Chairman. I am honored to be
    before this committee.
        As you think about our soldiers--you already mentioned the
    highlight--they make our units special. They make our units
    what they are, and collectively they develop our units'
    capabilities.
        As we talk about the Army National Guard, today we have
    94,000-plus soldiers currently deployed. We have already
    demobilized over 54,000 soldiers.
        So, Mr. Chairman, our bottom line is readiness, and you
    have clearly helped us deliver what I am now talking about in
    highlight terms. Our posture statement gets at the detail, but
    I do want to reinforce a point that General Blum has already
    made and it has to do with Guard and Reserve equipment
    appropriation. That is a readiness-enhancing initiative for us,
    and I reinforce the importance of that.
        Mr. Chairman, I know this is a 2005 hearing, but I need
    your help getting through 2004. I have enough total money.
    There will be a request coming to this committee for
    consideration of moving some money from personnel accounts to
    operations accounts. I will give you just a brief update of
    what is going on. With all the mobilization activity, we have,
    no doubt, changed our training plans from 1 October of last
    year. So I would ask favorable consideration to move some of
    our personnel accounts in a reprogramming action into the
    operations and maintenance accounts where I have clear need for
    some of our mobilization-related kinds of activity.
        Mr. Chairman, thank you.
        Senator Stevens. We will look forward to that request and
    act promptly on it. I understand what you are after and we will
    work with you closely on that.
        General James.

    STATEMENT OF LIEUTENANT GENERAL DANIEL JAMES, III,
                DIRECTOR, AIR NATIONAL GUARD
        General James. Mr. Chairman and members of the committee,
    thank you on behalf of the more than 107,000 Air National Guard
    men and women. Thank you for this opportunity.
        Before I give my remarks, I would like to introduce to the
    committee, if possible, Kentucky Air National Guardsman, Master
    Sergeant David Strasinger. Master Sergeant Strasinger is here
    with us today. He is a 20-year veteran. He has flown more than
    1,000 sorties in his career. That is 2,500 hours of safe
    flying. He is a combat veteran of 30 combat missions in
    Operation Enduring Freedom. He has also participated in Iraqi
    Freedom and Noble Eagle. From the 123rd Operations Group,
    Master Sergeant David Strasinger.
        Senator Stevens. Sergeant, it is nice to see that A-2
    jacket. That brings back lots of memories.
        General James. Well, Mr. Chairman, as you know, this has
    been an incredible year for our Nation and it has also been an
    incredible year for our Air National Guard. We have continued
    to participate in the global war on terrorism with pride and
    determination, and we have validated everything we have always
    said about our capabilities. We have trained to Air Force
    standards and accomplished the mission professionally as full
    partners in the total Air Force.

                            OPERATION IRAQI FREEDOM

        Our contributions over the past 2 years since September
    11th: we have mobilized over 36,000 members, flown over 100,000
    flights for 340,000 hours. One-third of the Air Force aircraft
    in Operation Iraqi Freedom were from the Air National Guard.
    Today over 42,000 personnel, nearly 40 percent of the National
    Guard's force, is currently performing full-time duty.

                            RECRUITING AND RETENTION

        We constantly monitor our recruiting and retention numbers,
    and I am very pleased to report that the trends so far are
    positive. We will and do expect to make our end strength for
    this year. Because we have retained more of our people, our
    recruiting goals are higher than need be. We have not recruited
    to those goals, but we will retain enough people to make our
    end strength.
        We are currently working on a plan to posture the National
    Guard for the missions our Nation will need in the future. The
    plan, or Vanguard as I call it, is an examination of our
    current capabilities and those required for our future air and
    space force. We are already well into developing initiatives
    for establishing the units that are integrated with the active
    and reserve component in the Guard for the F/A-22 Raptor and
    the RQ-1 Predator remotely piloted vehicle. Both of these are
    groundbreaking opportunities for the Air Guard and we are
    excited about the prospect of being involved in these new
    missions and weapons systems.

                                 C-17 AIRCRAFT

        In December of 2003, the first C-17 aircraft was delivered
    to the 172nd Air lift Wing in Jackson, Mississippi, the first
    operational wing of its kind ever in the Air National Guard.
    The final aircraft will be delivered in May and will be named
    the Spirit of Sonny Montgomery in honor of Congressman
    Montgomery who has done so much for not only the National
    Guard, but for the Nation, the military, and its veterans. We
    look forward to that event and to the great things to come from
    this distinguished unit.

                                     KC-135

        The KC-135 tanker continues to be the backbone of our air
    bridge for combat operations across the world. Modernizing this
    aging fleet is critical to the Air National Guard, the Air
    Force, and combatant commanders. This committee has helped make
    and keep us relevant and is directly responsible for our
    ability to participate as full partners with the Air Force.
    Your exceptional support in providing the miscellaneous NGREA
    funds has been absolutely critical in enabling us to leverage
    our limited resources in an effort to bring needed capabilities
    to the warfighter. The procurement of such items as the
    Litening II targeting pod, upgrading the F-15 engines, and the
    situational awareness data link, or SADL, are some examples of
    how this appropriations has assisted us. We cannot thank you
    enough for your continued support of this very important
    program. With your help, I am certain that we will continue to
    be ready, reliable, and relevant and needed now and in the
    future.
        I look forward to answering your questions. Thank you.
        Senator Stevens. Thank you, Generals.

                                    TANKERS

        General James, in November 2001, we suggested a leasing
    program to replace the KC-135's. Members of Congress and others
    outside of Congress have criticized our suggestion, but they
    have taken over 2\1/2\ years to review it and they have not
    come up with anything else. The first time any one of those KC-
    135's goes down and one of your people loses a life, I am going
    to take it to the floor and point it out. And each one of those
    people who are delaying that proposal are going to be
    responsible. Those tankers are now what? Forty-four years old
    on the average, General?
        General James. Yes, sir. I think the oldest is 47 years
    old.
        Senator Stevens. It is just impossible to believe that. As
    you say, the most critical portion of our operations today is
    the tanker. We are airborne for almost everything that is going
    on in Iraq and Afghanistan, and I cannot believe that this
    should be delayed by just petty foolishness. It is time for
    them to come up with a program and get it underway. It will
    take 3 years before it is initiated, and take 5 years before
    you get the replacement. Those tankers are going to be over 50
    years old by the time they are replaced. That is criminal,
    absolutely criminal.
        Senator, do you have any comments, questions?
        Senator Inouye. You have said everything I would have said,
    sir.
        Senator Stevens. I mean, it is your turn.
        Senator Inouye. Mr. Chairman, I would have said the same
    thing that you have said about the tanker. If we let this
    fester any longer, it would be criminal, and I would hate to be
    a witness to its first accident.
        Is it okay to ask questions?
        Senator Stevens. It is your turn. Yes, sir. I used my time
    to blow off.

                                   RECRUITING

        Senator Inouye. General Blum, the major concern that this
    committee has can be said in two words, retention and
    recruiting. What is your situation, sir?
        General Blum. Senator Inouye, speaking for the three of us
    at this front table, our major concern right now is readiness
    which translates directly to our ability to recruit and retain
    trained and ready citizen soldiers and airmen. My intuition
    would tell you that that would be very, very difficult in the
    situation and environment we find ourselves. However, in some
    cases, the successes that we are experiencing, is that our
    soldiers and airmen are reenlisting at very solid rates. They
    are staying with us. After they deploy to very unpleasant
    places around the world and put themselves in harm's way, they
    are staying with their formations, which brings a great sense
    of pride and satisfaction to the three of us at this table
    because our citizen soldiers and airmen are answering the call
    to colors and are remaining with us. This means we will have a
    veteran force of combat veterans which the Guard has not had
    since World War II. So in about 2 years, 8 out of 10 citizen-
    soldiers and citizen-airmen in our formations will have pulled
    a tour somewhere around the world in harm's way and will be
    veterans of either a combat operation overseas in the away game
    or a homeland defense operation here at home. And that vast
    operational experience will make us an even more capable and
    ready force.
        I hope those young men and women from the high school in
    Alaska are listening because we are getting non-prior service,
    first-term enlistments out of high schools and colleges at an
    unprecedented rate. We are doing very well and the quality of
    our young men and women coming in has never been better.
        So the good news is we are making our end strength and we
    are maintaining our end strength now that we are almost 3 years
    into a shooting war that is very, very difficult and putting a
    strain on the force. But the trends seem to be holding. We do
    not take them for granted. We monitor it very closely. We are
    watching for any signs that this may fail, but so far the young
    men and women of our Nation are answering the call to colors.
        Senator Inouye. How would you describe the attitude of
    employers and families?

                                   EMPLOYERS

        General Blum. Senator Inouye, as you well know, the
    National Guard is really very similar to a three-legged stool.
    One leg of that stool is the citizen soldier or airman. One is
    their family members, and the third leg, equally important, is
    the employer. So far the American employers have been standing
    with us.
        What they have asked us for time and time again, either
    through contacting their elected officials or contacting the
    National Committee on Employer Support for the Guard and
    Reserve, or calling us directly, as happens in some of our
    outreach programs, they simply want predictability. When is my
    employee going to be called to active duty? How long will they
    be away? When will they return? And how frequently will they be
    called back? How soon again will I have to lose that employee?
        So what we are doing is trying to set up a predictability
    model that will give employers, families, and the citizen
    soldiers and airmen a much greater picture further out. Right
    now we are out to about 18 months with predictability in the
    Air Guard and almost 24 months out with predictability in most
    of the larger formations in the Army National Guard. So this
    gives the soldier, the family, and their employer the
    predictability they have asked for.
        And we are also, to aid this, our transformation,
    modularity and rebalancing efforts are trying to put a greater
    number of high-demand capabilities in our force so that we do
    not have to rotate the same units so frequently. We are aiming
    for about a 5- or 6-year recovery time from an extended
    overseas deployment.

                                   READINESS

        Senator Inouye. In your response to the first question, you
    mentioned three R's: retention, recruiting, and readiness. How
    would you describe the readiness of the forces under your
    command?
        General Blum. Senator Inouye, the National Guard soldiers
    that have deployed most recently to Afghanistan and Iraq are
    among the best trained, best equipped, best prepared soldiers
    this Nation has ever sent out of any of its components. As a
    matter of fact, they are probably the best trained, best
    equipped, and best prepared soldiers any nation has ever sent
    to war. So that pre-deployment part of it is superb.
        But there are large parts of our force that are not ready
    because they were not resourced to be ready. Part of our
    rebalancing and restructuring of the National Guard will take
    us to a posture where we can apply increased resources to
    achieve enhanced readiness.
        Senator Inouye. Thank you very much. Thank you, Mr.
    Chairman.
        Senator Stevens. Thank you, Senator.
        Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you.

                                      C-17

        General James, I wanted to thank you for coming to Jackson,
    Mississippi for the arrival of the first C-17 that is deployed
    there for the Air National Guard to operate and maintain. I
    hope you are as pleased as I am with the progress that is being
    made to train the pilots and the crews. I understand the plan
    is to ramp up to an increased level of flying once all of the
    crews are qualified in the C-17.
        I am curious to know if your budget request contains the
    resources that are necessary in order to make this unit an
    active participant and to fully utilize these new assets.
        General James. Well, Senator, it was a great honor for me
    to be there and see that airplane roll down the runway and come
    in behind the grandstand with you and other colleagues, your
    colleagues from Mississippi.
        I am very proud of the fact that the leadership of the
    172nd remains engaged with us and Air Mobility Command (AMC) to
    make sure that the conversion goes smoothly. I just spoke with
    the Adjutant General yesterday about some plans to try to keep
    the airplanes flying and the training going on while still
    taking some pressure off of the air mobility assets that AMC
    has.
        In terms of our budgeting, when you have a conversion like
    that that starts into the fiscal year, we agreed with the
    Adjutant General (TAG) and with the leadership of the 172nd to
    budget at 80 percent rather than 100 percent of the flying
    hours for this fiscal year that we are currently in. We are
    using the model that we talked about earlier that came over
    from the 141. Once we train the crews and get the crews up to
    speed and get everybody checked out, we intend to look at all
    the data that we get from this first year's experience and then
    make an adjustment there so that we gradually ramp up to what
    or hopefully near what the active component is flying in their
    C-17 programs.
        Senator Cochran. I appreciate your leadership and your
    staying personally in touch with the needs of that unit.
        General James. Well, thank you, Senator. I have to tell you
    that the new TAG knows the airlift business, air mobility
    business very well and he does not hesitate to call me if he
    has got an issue.
        Senator Cochran. General Schultz, we were talking before
    the hearing began about the fact that Camp Shelby in
    Mississippi has been designated as a mobilization center. I
    would like for you to let us know whether this means that we
    will need to appropriate any additional funds beyond what is
    requested in the budget to ensure that that mission is carried
    out successfully.
        General Schultz. Currently, Senator, the 278 Cav Regimen
    from Tennessee will be mobilizing at Camp Shelby. Requirements
    for the installation of upgrades and various things will be
    processed through the Army. So right now today, I do not have a
    line item for you on what that requirement would be.
        Senator Cochran. Up in Tupelo, Mississippi, we have a unit
    that had helicopters. It is an Army National Guard unit. Some
    of the pilots have been deployed to Iraq, as a matter of fact.
    These are Kiowa helicopter pilots. Maybe General Blum is the
    one to respond to this. The report from the soldiers up there
    was that no replacement aircraft had been identified. Maybe
    they have by the time this hearing is held, but I understand
    the Army National Guard aviation distribution plan will be
    announced soon.
        Can you speak to this issue or give us any indication of
    what the plans are?
        General Schultz. Senator, I am working that plan
    personally. We will have 10 Kiowa Warriors, which is the
    aircraft that the unit had before we sent all the pilots off to
    active duty, to war. When we are done, there will be 8 Apaches
    in Tupelo plus the 10 Kiowa Warriors.
        Now, we are going through, obviously, a transformation in
    the aviation community as well, so some of the numbers I am
    talking about will take a while to be rebuilt, redistributed,
    but the end state would be a 16-helicopter flight facility
    there.
        I might also say, Senator, that I talked with the brigade
    commander from the 101st Air Assault Division, and the pilots
    we took from Tupelo were recognized as outstanding, skilled
    aviators indeed.
        Senator Cochran. We appreciate that compliment. We have had
    a lot of National Guard and Reserve forces from our State
    deployed. As a matter of fact, I think two Army Reservists have
    been killed in Iraq, so we are fully aware of the dangers they
    face and we want to be sure that the equipment they have and
    the training that they receive will enable them to carry out
    their mission successfully and to return home safely as soon as
    possible. We appreciate your leadership in assuring that.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you very much, sir.
        Senator Leahy.

                                HEALTH INSURANCE

        Senator Leahy. Thank you, Mr. Chairman.
        Last year the subcommittee recognized that almost 20
    percent of the National Guard and Reserve did not have health
    insurance. We realized that this was damaging readiness. On the
    Iraq supplemental, we enacted legislation that allows
    unemployed members of the Guard to buy into the TRICARE program
    on a cost share basis, and we put that in the defense
    authorization bill. It was a bipartisan piece of legislation.
    But it has not been implemented. I joined my colleagues,
    Senators Graham and DeWine and Daschle, recently to write the
    Secretary of Defense to find out how we can speed this up, stop
    slowing down this critical legislation. I would ask consent
    that my letter be part of the record, Mr. Chairman.
        Senator Stevens. Without objection.
        [The letter follows:]
                                          United States Senate,
                                        Washington, DC, March 25, 2004.
    The Honorable Donald Rumsfeld,
    Secretary, U.S. Department of Defense, The Pentagon, Washington, DC
            20301.
        Dear Mr. Secretary: We are writing to express our mounting
    frustration with the Defense Department's lethargic efforts to
    implement a pilot program to provide our reservists access to TRICARE.
        As you know, in both the Fiscal Year 2004 National Defense
    Authorization Act (NDAA) and the Emergency Supplemental Appropriations
    Act, Congress voted to expand reservists' access to TRICARE for one
    year. This legislation contained seven TRICARE-related provisions,
    ranging from medical and dental screening for reservists alerted for
    mobilization, to an extension of TRICARE eligibility before and after
    mobilization periods.
        We were pleased last week to see that the Defense Department has
    finally implemented the provisions to extend the post-mobilization
    TRICARE benefit to 180 days. But the same announcement said that
    implementation of a critical component of the TRICARE benefit--offering
    coverage to those without employer-provided health care--``cannot be
    completed for several months.'' We are very disturbed by the delay in
    the department's implementation of this key provision.
        We are also concerned that transitional benefits will not provide
    access to TRICARE Prime Remote. Many reservists, and perhaps most, live
    beyond a 50-mile radius of a military treatment facility and thus would
    be forced into TRICARE Standard. This plan charges a substantial annual
    deductible as well as copayments for every visit. This is not the
    transitional benefit that Congress sought to create.
        In recent days, the Administration has indicated that it supports
    improving health care benefits for our reservists. We applaud that
    decision and ask that you work with us, both to implement the existing
    one-year program and enact our proposal to provide reservists and their
    families permanent access to TRICARE.
                Sincerely,
                                       Mike DeWine,
                                       Tom Daschle,
                                       Lindsey O. Graham,
                                       Patrick Leahy,
                                                 Members of the Senate.

        Senator Leahy. General Blum, can you tell me why this has
    not been put into place yet? I would think there would be some
    urgency on this.
        General Blum. Senator Leahy, there is definitely urgency on
    our part. We place nothing at a higher priority than taking
    care of our soldiers, our airmen, and their families. I do not
    view this TRICARE initiative or this health care initiative as
    an entitlement program. I really view it as a medical readiness
    enhancement. I too am anxiously awaiting the implementing
    instructions from the Department of Defense on how we are going
    to move forward in this area.
        Senator Leahy. Well, please pass the word back that an
    awful lot of us up here from both parties--this is not a
    partisan issue, and you certainly have not made it one--who are
    very, very concerned. As we call up more and more of our Guard
    and Reserves, we would like this TRICARE implemented. If they
    keep delaying it at the Pentagon, I think it is going to hurt
    your readiness. It is certainly going to hurt retention. I know
    you and I have had a lot of discussions and I know how
    concerned you are.
        We added, in this subcommittee, about $200 million divided
    almost equally between the Air and Army National Guard to
    increase equipment procurement. We also gave the Air and Army
    Guard a lot of discretion, an enormous amount of discretion in
    managing the account. I have received an update on how you used
    the funds. It appears you put them toward an urgent need like
    up-armored high mobility multi-purpose wheeled vehicle (HMMWV),
    M-4 carbines, combat identification friend or foe systems. Do
    you still have an equipment backlog and what are some of the
    most urgent needs?

                               EQUIPMENT BACKLOG

        General Blum. Yes, Senator, we always will have an
    equipment backlog as technology changes and as the requirements
    change on the battlefield. General James has an equipments
    needs list as does General Schultz. These are not wants; these
    are needs. Frankly, the Army and the Air Force are making every
    effort to finally make an honest effort to equip us like our
    active counterparts, but they too are going to fall short. We
    will welcome any assistance that we could get in that regard
    against our needs list, and those needs directly equate to
    readiness. If you want some detail on that, General Schultz can
    share that on the Army Guard side and General James can give
    you the detail, sir, for the Air Guard.
        Senator Leahy. General Schultz.
        General Schultz. Senator, in the case of the Army Guard, we
    bought trucks, machine guns, night vision devices, and radios.
    The equipment I am talking about now is as a result of
    Congress' action last year. It will be realized in the form of
    units going to the third rotation of Operation Iraqi Freedom
    (OIF)-3. In other words, we are buying new equipment and
    furnishing this equipment to units that are about to go to war.
    That is how critical this function is. We are still short the
    very things that I have just talked about as we now alert and
    mobilize follow-on units.
        Senator Leahy. General James.
        General James. Yes, Senator. In terms of fiscal year 2004,
    we have utilized those resources I mentioned in my opening
    remarks on targeting pods, engine upgrades, everything from
    night vision goggles to helmet-mounted cuing systems and large
    aircraft infrared countermeasures which is something we
    continue to press for. We have a large fleet of large airplanes
    and I really am concerned about their ability to protect
    themselves against infrared man-launched shoulder-mounted
    weapons in theater in particular.

                    LARGE AIRCRAFT INFRARED COUNTERMEASURES

        As far as the unfunded areas, the top five for us for this
    coming fiscal year would be again the targeting pods, depot
    maintenance shortfalls, weapons of mass destruction equipment
    and training, primarily training. Again, the LAIRCM, the large
    aircraft infrared countermeasures, and the F-15, F-16 engines.
        Senator Leahy. Thank you.
        I will submit my other questions for the record, if I
    might.
        Senator Stevens. Thank you very much, Senator. I will
    remind members that we do have a second panel.
        Senator Burns.
        Senator Burns. Thank you very much, Mr. Chairman.
        Each time I go home, I am just standing in marvel of what
    we have accomplished in the last 3 years as far as upgrading
    our Reserves and our National Guard in our home States.
        A decision was made some 10 or 11 years ago that part of
    our overall military force structure was going to be moved to
    the ranks of the National Guard and Reserves. It became
    apparent to me that when you look at the infrastructure in our
    particular States, our infrastructure was not ready to really
    train hard and to have the facilities, the infrastructure to
    complete that mission.
        So in my State, I went to work trying to fix that because
    we were operating out of facilities that were built in World
    War II. Our communications and our ability to teach
    interactively and distance learning and everything that we had
    to do was woefully way behind the state of the art. But now we
    have done that.

                                TRAINING RANGES

        I just want to mention to you, General James, about a
    training tool that we use in Montana at the 120th wing there on
    the Litening II advance targeting pods. I keep hearing my
    people talk about them. They have probably been the most useful
    thing. As you know, we ran out of ranges, places to train, air
    space in which to train. By the way, if any of you all want
    some air space, you know the sky is bigger in Montana. We have
    got room for you and we are willing to host you. I just thought
    that I would throw that out there.
        Senator Stevens. The sky is only bigger in Montana if you
    are lying on your back.
        Senator Burns. I am not going to go there.

                           LITENING II TARGETING PODS

        Could you bring us up to date on the Litening II targeting
    pods, if you would please, your requirements? Give us some idea
    of the cost of the program because it appears to me these will
    become a very, very economical way to train our pilots. Can you
    bring us up to date on that and tell us more about them?
    Because I do not think a lot of people know a lot about them.
        General James. Well, the Litening II targeting pod was, I
    would say, the piece of equipment that got us involved in the
    last few contingencies. The warfighters, the combatant
    commanders, want precision-guided munitions capability that can
    be delivered very accurately. My predecessor pursued this
    strategy to acquire the Litening II and they used the NGREA
    funds to do so. That capability allowed us to be involved in
    the last two to three contingencies, especially Iraqi Freedom
    and Enduring Freedom.

                                   SNIPER POD

        I have a list of different numbers here that I can pass on
    to the staff, but what I would say to you is our philosophy is
    that there is another pod that has come forward. It is called a
    Sniper pod and it is produced by another corporation. It was a
    little delayed getting into production but now they are
    starting to produce this pod, and it is supposed to be the
    Cadillac of all pods.
        We still are procuring our Litening II pods and we have
    developed a two-pod procurement philosophy. In other words, we
    will continue to procure some Litening pods, but we will also
    procure the Sniper pod as it becomes more and more available.
        Senator Burns. Well, I congratulate on that.
        General Schultz, we are trying to update our 155's in
    Montana. Can you give us an update? Is that possible? We want
    to go to the lighter weight Howitzers up there. Is that
    possible? What plans do you have for us on those 155's?
        General Schultz. Senator, I owe you a complete answer for
    the record. We are going through those reviews right now. We
    had some 155's in our long-range program. Some of those numbers
    have changed, and I will give you a full lay down and a
    detailed description of just how we are doing there. It is
    possible to do what you are describing.
        Senator Burns. Thank you very much.
        [The information follows:]

      Fielding of Lighter Weight Howitzers for Montana Army National Guard

        No force structure decisions have been made with respect to
    the unit level of detail for the fielding of LW 155 equipped
    Army National Guard Field Artillery units. Montana is part of a
    two-state coalition that is attempting to go after a
    congressional add for the LW 155 Howitzer. Montana Army
    National Guard is not currently on any fielding schedule for
    the LW 155.

        Senator Burns. I have some more questions. I will offer
    them in writing, Mr. Chairman. Again, I want to congratulate
    the leadership because I think you have been visionary because
    we know we are not just a weekend Boy Scout camp anymore. We
    are there to do business. You have caught the imagination of a
    lot of young people. They are staying with you to somewhat of a
    surprise because we hear a little rhetorical going on every now
    and again, but for the most part, they are very, very
    optimistic and they are doing a great job. I thank the
    Chairman.
        Senator Stevens. Thank you.
        Senator Dorgan.
        Senator Dorgan. Mr. Chairman, thank you very much.
        First of all, let me thank all of you for your service and
    for what the men and women under your command do for this
    country.
        General Schultz, this weekend a member of the 142nd
    battalion that just returned from Iraq told us that they did
    not have enough sets of body armor. The young man indicated
    that when one soldier came back from patrol in Iraq, he took
    off his body armor and gave it to the next soldier going on
    patrol. Can you give me any information about what is the
    supply of body armor? Is there sufficient body armor in Iraq at
    this point?
        General Schultz. Senator, the condition you described early
    on in the first rotation of Operation Iraqi Freedom was no
    doubt exactly as the soldier outlined it to you. The Army has
    (OIF-1) been working hard on the distribution of the body
    armor. In Afghanistan and Iraq, there are adequate quantities
    of the inventory. We followed the 142nd battalion and they
    performed a significant portion of their mission without every
    soldier having the full-up body armor issued. That is correct.
    That has since been adjusted in theater, though. So we have
    taken the action that he outlined the concern for.
        Senator Dorgan. I will ask him more about that later, but
    the question is how much is in the country relative to the
    number of soldiers in the country.

                      BASE REALIGNMENT AND CLOSURE (BRAC)

        Let me ask you a question about BRAC. What will be the role
    of the three of you with respect to making recommendations to
    the Defense Secretary? My understanding is that only a handful
    of Air Guard and Air Force Reserve facilities were evaluated,
    General James, in the 1995 BRAC round. My understanding is that
    this BRAC round intends to look at all facilities of the Guard
    and Reserve. Is that correct, or am I wrong about that?
        General Schultz. Senator, if I could. In terms of the Army
    Guard, all our facilities fall below the threshold that BRAC
    considers. What I have said, though--and I encourage Adjutants
    General to do the same thing here--is we ought to volunteer to
    be considered for the survey, for the review, for the analysis.
    And then States would participate on a voluntary kind of basis
    for a site by site and a reconfiguration and redesign, et
    cetera. So there are aspects of the BRAC program I think we
    ought to take a serious look at and see the value-added or the
    advantage of what BRAC might bring us. So I have said do not
    just discount the BRAC benefits by saying nothing qualifies in
    the Army Guard.
        What I am saying is we ought to take a serious look at
    facilities that could be joint, facilities that may have
    qualities where we can just simply share costs with other
    services. Now, that will not apply to every kind of armory
    across the country, but it might to some. So that is what I
    have encouraged States to do.
        Senator Dorgan. General James.
        General James. We will be full participants in the BRAC. We
    are already working with the committees from the Office of the
    Secretary of Defense (OSD) all the way to the Air Force
    committees. The Air National Guard will be full participants in
    having an input into BRAC. To answer your questions, are all
    installations being looked at for BRAC, my understanding is
    yes, all installations will be looked at.
        Senator Dorgan. And that is a change from 1995. Is that not
    correct?
        General James. Correct.
        Senator Dorgan. If all of your units are full participants,
    what role will you have in making recommendations to the
    Secretary? I think I understand what role the other service
    chiefs have, but what role will you have?
        General James. We are involved with the Air Force. We
    participate through the Air Force and then on to the Department
    of Defense (DOD). My deputy, Brigadier General David Brubaker,
    sits on the committee that represents the Air National Guard
    and makes our inputs.
        Senator Dorgan. So you will participate through the Air
    Force Chief.
        I mean, there is a difference between regular Air Force and
    Air Guard because in the regular Air Force, you can close a
    base and move your troops. That is not necessarily the case
    with the Guard. Is that right?
        General James. That is our challenge. We cannot cut
    Permanent Change of Station (PCS) orders and just move our
    folks. We have to come up with a program whereby we can re-roll
    or integrate these forces into possibly a facility that is
    close by that is an active duty facility. Under the Vanguard
    concept, we are looking at those types of formations and those
    types of units whereby we have integrated Air National Guard
    and active duty. That does not work in every case as you look
    at the demographics and how we are spread out. In some places,
    that lends itself very well, in the large airplane community,
    for example, along the east and west coast where we have
    facilities that have the air mobility assets. But when you look
    at the heartland and your State and other States where you have
    fighter units spread out throughout the United States, you have
    to look very carefully. There is potential because you do have
    a large tanker base north of you, but all of this has to be
    taken into consideration.
        One of the things we are doing is we are asking for inputs
    from the States through the adjutants general for how they
    would do it if they were forced to remission or move.
        Senator Dorgan. Finally, General Schultz, in the Guard you
    recruit not just a soldier but their family because it is a
    citizen soldier and their family plays a significant role in
    this. I listened closely to your answer about retention and
    recruitment. I think it is critical to take a hard look and a
    close look at that because often what we are getting from
    families after long deployments is word that they are concerned
    about that. So one would expect there to be some concern
    showing up in recruitment and retention. I am really pleased to
    hear your report that it is not, but I think that your
    suggestion that you need to follow that very closely is an
    important one at this point.
        General Schultz. We watch it very closely, Senator.
        Senator Dorgan. I hope that those men and women who serve
    under you understand the gratitude of this committee and that
    this country is grateful for their service.
        Mr. Chairman, thank you.
        Senator Stevens. Senator Domenici.
        Senator Domenici. Thank you, Mr. Chairman. I had a series
    of four questions. I will try to get them in. If I do not, I
    will submit them.

                                      IRAQ

        Let me ask all of you. It would seem to this Senator that
    you must have had to change the activity expected from some of
    your units and some of the preparation in order to be used in
    this war in Iraq. When you hear of Reserves and National Guard
    units over there, you frequently hear that they are doing
    things that the regular Air Force is not doing and the regular
    Army is not doing. But could you tell me, when you say we are
    sending the best equipped, best trained people, what are you
    sending them over there to do? What are they principally
    involved in doing in Iraq?
        General Blum. Senator, I have been to Afghanistan and Iraq
    three times. I will be going there again in the next 2 weeks. I
    have been for each and every rotation, and I can assure you
    that the first rotation was not a pretty picture. They did not
    go over there as well-equipped as we currently are doing. They
    were trained and they were ready, but they were not equipped,
    and that has been brought up by several of the other Senators.
    They are absolutely correct. Those issues have been corrected.
    The United States Army, General Pete Schoomaker has moved lots
    and lots of effort and money to making us the best equipped,
    best trained, best prepared force that has ever been deployed,
    and I mean that sincerely, bar none, in the history of this
    Nation. The group that is over there now, the 30th, the 39th,
    the 81st, and the 116th, the 278th, 256th, and the 42nd that
    are getting ready to go will be the best equipped and trained
    and superbly ready force we have ever sent.
        What they do is what the combatant commander needs them to
    do on a given day because this is not a training exercise. This
    is a war where an enemy has a vote, and unfortunately, he votes
    often and differently each time, and we have to make those
    adjustments.
        The performance of the citizen soldier and airmen that have
    been sent overseas has been nothing short of outstanding,
    superb. They have not failed in anything they have been asked
    to do. They can perform at the same rate or better than their
    active duty counterparts because of their civilian-acquired
    skills and some of their maturity and education levels are a
    little bit higher.
        Senator Domenici. General, let me interrupt. I understand
    your answer and I appreciate it.
        It seems to me when you talk about the success rate at
    keeping these people in that somebody like me wonders are they
    staying in expecting to be overseas or are a lot of them
    expecting to be part of a mission that does not take them
    overseas?
        General Blum. Sir, in the last 3 years no one has come into
    the National Guard because they think they are coming in
    strictly for a college education or military vocational
    training. They know they are going to have to answer the call
    to colors. They know they are going to be serving, defending
    this Nation either here at home or abroad, and maybe both. In
    fact, some of the people on the panel have done all three. They
    are staying with us because they feel what they are doing is
    vitally important to the survival of this Nation and our way of
    life and our liberties. I thank God every night that we have
    young citizens in this country that are willing to do that.
    When you remember that we are now in our 30th year of no draft,
    all volunteer, all recruited force and being tested for the
    first time in the crucible of war, this young generation is
    standing up to that test and getting high marks.
        Senator Domenici. Thank you very much.
        I want to just say I had three questions and I am just
    going to outline them. One has to do with a lot of families in
    rural areas. New Mexico is a very rural State. The families do
    not know their benefits, do not know what they are supposed to
    get, do not know what they are entitled to, and they are not in
    Albuquerque. They are off in some little rural area. Could
    there be some kind of centralized office that could provide
    Guard and Reserve families with information regarding what they
    are entitled to, or is that being done in your opinion?
        General Blum. Sir, we have over 400 centers called Family
    Assistance Centers where any member of the Army National Guard,
    Air National Guard, or any of the other services, whether
    reserve or active, can contact that unit armory and speak with
    a trained representative who can tell them all of their
    benefits and direct them almost as an ombudsman to solve their
    problems. That is what they are there for. They are funded and
    they are established and they are trained to take care of the
    families of soldiers, sailors, airmen, and marines who happen
    to live in a ZIP code where there is no major military
    installation to help them.
        Senator Domenici. So if we are receiving complaints about
    that, what we ought to do is have them check where their
    closest center is, and if there are not any, we ought to
    complain to you.
        General Blum. Absolutely. In your case, sir, I would direct
    them right to see General Montoya and have him direct them to
    the local closest Army National Guard or readiness facility
    that could support their efforts.

                                 BLENDED UNITS

        Senator Domenici. My last one has to do with blended units.
    We understand that the National Guard unit in California and an
    active duty Air Force squadron in Nevada recently formed what
    they called a blended wing for the operation of Predator
    unattended aerial vehicles (UAV). How is this concept working?
    And do you see an increased role for the Guard in operating
    UAV's for the border? And do you and the Air Force plan to
    expand the number of blended wings? If so, for what purpose?
        General Blum. I personally think it is the way of the
    future. I think it makes sense for the American taxpayer to
    leverage the Department of Defense's capabilities by getting
    the synergy of the active, the Reserve, and the Guard
    components. That unit that you talk about is an Air Force
    Reserve unit, an active Air Force unit, and two Air National
    Guard units that make up that unit. We call that an integrated
    unit because it is fully integrated. All three components
    comprise that unit and I think that makes great sense as we
    move into the future and we use our Guard and Reserve as an
    operational force, not a strategic Reserve.
        Senator Domenici. Could I have one more, Mr. Chairman?
        Senator Stevens. Yes, sir.
        Senator Domenici. In New Mexico, it seems like a
    restructuring is taking place. The National Guard leadership is
    developing a plan and an organization to convert much of what
    we have got there from air defense to infantry military police
    and other units. Is this in line with what you want, and do
    these kind of missions reflect a larger plan for building the
    National Guard for the future, reflecting perhaps a change of
    needs?
        General Blum. Senator, I applaud those efforts being taken
    by the joint force headquarters in New Mexico. It is exactly
    the right thing to do. They are divesting themselves of units
    that are no longer needed for current and future threats and
    moving it to areas to develop capabilities that that State will
    need and our Nation will need from its National Guard forces in
    New Mexico. General Montoya is doing exactly, in my judgment,
    the right thing at the right time.
        Senator Domenici. Thank you. Thank you, Mr. Chairman.
        Senator Stevens. Thank you, gentlemen. I have only one
    question and that is this. When we were in Iraq, we pursued to
    a great extent the question of the dumps of ammunition and
    ordnance that exist all over that country. We were told there
    are from 1,000 to 7,000 of those dumps in that country and that
    the current deployment is not sufficient to guard them. They
    represent a massive amount of weapons of destruction. We have
    been looking for weapons of mass destruction. This is a massive
    amount of weapons of destruction. It appears that some of them
    were taken out, tied together, and blew up an Abrams tank and
    others have been used as mines in the roads.
        I do not want your response, but I would like you to go
    back to your offices and take a look at that and see what would
    it take to send over a force designed for one purpose and that
    is to gather up that ordnance, either destroy it or drop it in
    the ocean or do something with it because it is going to be
    consistently used to harm our American personnel if we do not
    do something about it. We are asking the Department to look at
    it too, and I intend to go further on it before the year is
    over. But I do think it is going to take a special force of
    people that would be trained to know how to deal with that
    ordnance and to move it somewhere, at least get it to where we
    can guard it. Currently very few of those dumps are guarded. So
    I appreciate your response if you would get it to me.

                         ADDITIONAL COMMITTEE QUESTIONS

        I also have some questions I will submit for the record, as
    did several members of this committee.
        I want to thank you all again and tell you what a wonderful
    job we know your people are doing. I have said before Senator
    Inouye and I were supposed to be part of the greatest
    generation. We spawned a greater generation. These young people
    are just fantastic people. I have never met anybody like those
    people who are over there, and that includes the ones that are
    in the hospital. They are just fantastic. Thank you all very
    much, gentlemen.
        [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
                 Question Submitted by Senator Daniel K. Inouye

        Question. One of my constituents, Atlantis Cyberspace, Inc. has
    developed what seems to be an extremely flexible Immersive Group
    Simulation system capable of providing superb training opportunities
    for Reserve component forces. Their basic solution provides four
    virtual reality pods, a live virtual camera system, a mission control
    instructor-operator station, training scenarios based on situations and
    graphics developed for ``America's Army'', a full runtime license, and
    set-up and installation. That basic system can be easily expanded from
    four to up to 32 pods and has additional options including expanded
    After Action Review stations, wireless or customized weapons, and force
    feedback vests that record opposing force hits. This existing
    flexibility allows realistic training for a range of needs: from small
    special operations teams up to platoon-sized conventional units. The
    scenarios can be modified to train specific tactics, techniques and
    procedures or to conduct mission rehearsals, in fact I understand that
    Atlantis Cyberspace has recently been asked to submit a proposal for a
    modification of their basic system to allow tactical convoy training in
    a virtual environment. The pods can be linked from different locations
    to allow individuals to train together while physically separated and
    the system is sufficiently compact to allow its deployment in austere
    locations or small training spaces.
        Atlantis Cyberspace has had some initial contact with the National
    Guard, but I am interested in your assessment of the training
    opportunities offered by their Immersive Group Simulation. Could you
    please have the appropriate members of the Bureau look at the system
    and provide me your thoughts on the utility of the system?
        Answer. We are aware of the system and have had contact with
    Cyberspace but have not as yet completed a full assessment of its
    applicability to Army National Guard Training. Once a complete
    assessment is completed, we will forward a copy of the review to you.
                                     ______

                 Question Submitted by Senator Patrick J. Leahy

                               HOMELAND SECURITY

        Question. General Blum, The past has shown that there are times
    when it is necessary to have access to military equipment and personnel
    to perform certain functions in a state and local setting. We have made
    provisions in previous years to allow National Guard members to perform
    certain missions such as counter-drug and weapons of mass destruction
    civil support in a separate status that would not violate posse
    comitatus. Do you feel that domestic operational use of National
    Guardsmen in a title 32 status would aid in providing the necessary
    flexibility for our states to respond to domestic emergencies such as
    unprovoked terrorist attacks?
        Answer. Providing clear authority for the National Guard to perform
    operations--in addition to training--under Title 32 would significantly
    strengthen the flexibility for addressing domestic missions. As you
    state, the counter-drug activities and weapons of mass destruction/
    civil support team operations have been quite successful. I would also
    add that the airport security mission and the recent mission in support
    of the G8 conference and similar major events have also demonstrated
    the wisdom of having National Guardsmen perform operational type
    missions while remaining under the command and control of states. One
    of the major benefits, as you point out, is the resulting ability of
    National Guardsmen to assist in both federal and state law enforcement
    free from the restrictions of posse comitatus.
        Also, important, is the great speed and agility inherent in Title
    32 operations. Because National Guard troops are already under the
    command of their state Adjutants General they can very rapidly be
    called to duty and, likewise, can easily be released from duty. No
    cumbersome federal mobilization and deployment process is needed.
        For this reason, I would urge that any amendment of Title 32 to
    provide operational authority do so in such a manner as to minimize the
    number and types of administrative prerequisites which might slow down
    the process and thereby destroy the speed and flexibility which are
    among the most important characteristics of Title 32 operations in the
    first place.
                                     ______

           Questions Submitted to Lieutenant General Roger C. Schultz
                  Questions Submitted by Senator Conrad Burns

                               HOMELAND SECURITY

        Question. What is your plan for the procurement of more M777,
    Lightweight 155-millimeter howitzers (LW155) for the Army National
    Guard?
        Answer. Money previously programmed to field all six battalions in
    the Army National Guard has been reprogrammed to fund the Army's
    Stryker brigades and leaving the Army National Guard with an unfunded
    requirement of four battalions--two-thirds--of the Army National
    Guard's total requirement for LW155 corps battalions. A battalion set
    of LW155 costs $35 million, which includes howitzers equipped with the
    digitization package, initial spares, new equipment training and LW155
    unique associated items of equipment and test sets.
        Question. I am interested in your plans for the expansion of the
    force structure of unmanned aircraft into the Army National Guard; can
    you provide me with a plan showing which systems will be brought into
    Army National Guard units and a timeline for that implementation?
        Answer. It is my intention to build modernized force structure
    which mirrors the modular design of the Active Army. These designs will
    be implemented between now and fiscal year 2010 and follow, as nearly
    as can be projected, the return of units from Peace Keeping or GWOT
    missions. When the plan is completely implemented the Army National
    Guard (ARNG) will have 34 fully equipped and trained Shadow 200
    Tactical Unmanned Aerial Vehicle (TUAV) Platoons. In order to meet this
    timeline the activities of a number of organizations to include the
    state National Guards; the operations, personnel, acquisition, force
    structure and training staff elements of both HQDA and NGB as well as
    manufacturers must be coordinated. At present, two TUAV platoons (from
    the Pennsylvania and Maryland Guards) comprised of 22 soldiers are
    training at Fort Huachuca as part of a Mobilize-Train-Deploy scenario.
    These units will leave equipment fielded to them in the theater of
    operations as they will be followed by platoons from the Minnesota
    ARNG. The 116th Brigade which is headquartered in Idaho shares force
    structure with the Oregon and Montana Army Guards and will convert to
    the modular design in fiscal year 2006.
        Question. What is your plan to decrease the stress on certain
    specialties such as Military Police and Civil Affairs due to high
    mobilization rates within the Guard?
        Answer. Current operations and future operations continue to
    require increasing numbers of military police units. This requirement
    is not likely to decrease in the near future. In order to meet on-going
    requirements, the Army National Guard committed to build 144 new
    military policy units, in addition to the 118 military police units the
    Guard presently has, between now and September 2009. The Army National
    Guard provisionally organized 16 military police units to fill the
    immediate need for additional military police for law and order mission
    inside the Continental United States, Hawaii, and military
    installations in Germany, but some of these provisional units will
    return to their original structure when missions complete. In addition,
    the Army National Guard accelerated the activation of two military
    police combat support companies. The Active component and the Army
    Reserve own all Civil Affairs functions.
                                     ______

          Questions Submitted to Lieutenant General Daniel James, III
                  Questions Submitted by Senator Conrad Burns

                                LITENING II PODS

        Question. What are your requirements for the Litening II Pods for
    the Air National Guard?
        Answer. The LITENING family of targeting pods has evolved from the
    original LITENING II to ER (Extended Range) and now to AT (Advanced
    Technology). The LITENING AT pod is equipped with a 512k FLIR, Laser
    Spot Track (LST), and the capability to target J-Series Weapons. The
    Northrop Grumman LITENING AT targeting pod (TGP) is comparable to
    Lockheed Martin's Sniper XR.
        The total targeting pod requirement for the Air National Guard is
    266 pods that includes 203 for Block 25/30/32/42 F-16s and 54 for the
    A-10. This breaks down to 8 TGPs per squadron plus spares. The ANG has
    87 LITENING TGPs in the inventory, with 25 LITENING ATs on order, 12
    Sniper XRs on order, and 70 Sniper XRs to be received from the active
    duty Air Force. The remaining requirement is 63 TGPs at a unit cost of
    $1.3 million per pod for a total price of $81.9 million.

                                   F-16 FLEET

        Question. Is the Air Force adequately funded to provide these pods
    to the F-16?
        Answer. No. The United States Air Force currently has 470 LANTIRN
    Targeting Pods (TGP) in its inventory, which has a single mode Forward
    Looking Infra-Red (FLIR) and does not have a TV mode, Laser Spot Search
    and Track (LSS/LST), Laser Marker (LM), or the ability to generate J-
    series weapons. The total documented requirement for the Combat Air
    Forces (CAF) is 679 3rd Generation TGPs. The United States Air Force
    has budgeted for 200 Sniper XR targeting pods, with 56 on contract. The
    United States Air Force, Air National Guard, and AFRC have a total of
    134 LITENING pods in their inventories. This leaves the CAF 345 TGPs
    short of our documented requirements.
        The United States Air Force and Air National Guard combined forces
    in February 2000 to develop and procure the Advanced Targeting Pod
    (ATP). Lockheed Martin's Sniper XR pod won an open competition for the
    ATP contract, and the Air National Guard is supposed to receive 70 of
    the first 176 Snipers that are procured. Sniper is over a year and a
    half late, and the Air National Guard is still waiting to receive the
    first TGP from the United States Air Force. LITENING has helped satisfy
    ANG requirements in the interim.

                            LITENING TARGETING PODS

        Question. What will be the impact if these Litening targeting pods
    are not adequately funded?
        Answer. The Air National Guard has been sharing LITENING Targeting
    Pods (TGP) between units since 1998. At the present time, we only have
    enough pods for units to get a minimum of 3 months worth of training
    before they deploy to theater. When a unit returns home, they typically
    go 3-6 months without any TGP training capability. Funding the
    remaining 63 LITENING pods and receiving 70 Sniper pods from the United
    States Air Force will allow the Air National Guard to permanently base
    8 pods plus spares at each unit. This will keep the Air National Guard
    from constantly moving TGPs, provide better training continuity, and
    establish unit ``ownership'' of pods that will improve their overall
    maintainability.

                               UNMANNED AIRCRAFTS

        Question. I am interested in your plans for the expansion of the
    force structure of unmanned aircraft into the Air National Guard; can
    you provide me with a plan showing which systems will be brought into
    Air Guard units and a timeline for that implementation?
        Answer. We are currently working with Air Combat Command, the lead
    command for unmanned aircraft, to develop a plan to support and
    integrate Air National Guard units into unmanned aircraft operations
    and maintenance. To date, the ANG has been processing, exploiting, and
    disseminating intelligence from Predator, Global Hawk, and U-2 missions
    over Iraq and Afghanistan. In particular, the 152 Intel Squadron (NV
    ANG) was the sole exploiter of Global Hawk imagery during OPERATION
    IRAQI FREEDOM and OPERATION ENDURING FREEDOM. We are currently
    expanding our exploitation capability by robusting our current
    intelligence units [117 Intel Sq (AL ANG), 123 Intel Sq (AR ANG), and
    152 Intel Sq (NV ANG)] and standing up additional units in California,
    Georgia, Hawaii, Kansas, Maryland, Texas, Utah, and Virginia.

                         TACTICAL AND STRATEGIC AIRLIFT

        Question. Are you finding that your tactical and strategic airlift
    capabilities adequate?
        Answer. ANG internal tactical (theater) and strategic capabilities
    are more than adequate to meet Air National Guard training, non-
    deployed mobility and exercise support needs. The issue is that ANG
    resources are part of a larger, Air Force/National Defense set of
    requirements determined by the Air Force and the Joint Staff. Whether
    overall capacity is sufficient to meet national strategy and
    warfighting needs is currently under study. The issue is beyond the
    capacity of the ANG to answer.
        Question. Is tactical and strategic airlift funded adequately in
    the fiscal year 2005 budget?
        Answer. There are shortfalls in funding both tactical and strategic
    airlift in the fiscal year 2005 budget. On the tactical side,
    additional unbudgeted C-130J aircraft are required to meet the
    previously agreed total force acquisition profile and funding is
    lacking for combatant commander and AMC mandated (but not funded) night
    vision goggle capability and aircraft defensive systems. The strategic
    airlift mission area is under funded in fiscal year 2005 in the amount
    of $1.7 million for the cost of C-5 simulator installation at Memphis,
    TN as part of the ongoing 164th Airlift Wing conversion from C-141 to
    C-5 aircraft. There is a critical shortfall of $63 million in fiscal
    year 2005 to cover the cost of required support equipment required for
    the incoming C-5s at Memphis and at the subsequently converting 167th
    Airlift Wing at Martinsburg, WV. This equipment is not being flowed
    from AMC with the aircraft and is acquisition lead-time away.

                                    RESERVES

    STATEMENT OF LIEUTENANT GENERAL JAMES R. HELMLY, CHIEF,
                ARMY RESERVE
        Senator Stevens. Our next panel will be the Reserve chiefs,
    Lieutenant General James Helmly, Vice Admiral John Cotton,
    Lieutenant General Dennis McCarthy, and Lieutenant General
    James Sherrard. If you would please join us, gentlemen.
        General McCarthy, can you tell us who those people are? One
    of them is your son I understand. Captain, it is nice to have
    you join your father. We appreciate it very much.
        General McCarthy. The young captain back there is Captain
    Michael McCarthy who is on active duty with the Marine Chemical
    Biological Incident Response Force (CBIRF) unit here in
    Washington who wanted to come and see a hearing today. Thank
    you for asking me that, sir.
        Senator Stevens. It is not very educational today, but that
    is fine.
        General Helmly, are those people behind you here for
    introduction?
        General Helmly. Yes, sir. This is Staff Sergeant James
    Gwiazda and Sergeant Paul Hutton, both members of the 299th
    Engineer Bridge Company of Fort Belvoir, Virginia, which fought
    the road to Baghdad and bridged the Euphrates River for the 3rd
    Infantry Division in its decisive attack on Baghdad.
        Senator Stevens. Well, we are proud to have you with us,
    gentlemen. Thank you very much.
        All of your statements will be printed in the record as if
    read. We appreciate your summarizing whatever you wish to say
    before us today. There is a debate going on on the floor now
    unfortunately, but General Helmly, let us start with you
    please, sir.
        General Helmly. Mr. Chairman and members of this
    distinguished subcommittee, thank you so much for the
    opportunity and indeed the privilege to testify on behalf of
    the 211,000 soldiers, 12,000 civilian employees, and indeed the
    families, as we noted here today, of the Army Reserve, an
    integral component of the world's greatest army, an army at war
    for a Nation at war.
        I am Ron Helmly and I am an American soldier in your Army
    and very, very proud of it, Mr. Chairman. I am joined this
    morning, as we noted, by Staff Sergeant James Gwiazda and
    Sergeant Paul Hutton, both of the 299th Engineer Bridge
    Company.
        Today, as we speak, nearly 60,000 Army Reserve soldiers are
    on active duty in Iraq, Kuwait, Afghanistan, here in the
    continental United States, and elsewhere around the world as
    part of our Nation's global war on terrorism, serving
    courageously and proudly. They are joined by another 151,000
    Army Reserve soldiers currently training and preparing for
    mobilization or, indeed, resting and refitting after being
    demobilized and redeployed.
        Since September 11, 2001, more than 100,000 Army Reserve
    soldiers have served on active duty as a part of this war.
    Tragically, 31 Army Reserve soldiers have made the ultimate
    sacrifice, 4 in just the last week, in service to our Nation to
    keep their fellow citizens and their families and neighbors
    safe and free. We are forever and deeply in their debt and
    honor their memories by our actions here today.
        Your invitation to testify comes at a time of profound and
    unprecedented change and challenge in the dynamics of our
    Nation's security environment. A critical issue that should be
    recognized is that this is the first extended duration war our
    Nation has fought with an all-volunteer force. January marked
    the 30th anniversary of the all-volunteer force. This immense
    policy change in our Nation has brought the Army Reserve and
    the armed forces an unheard of and unprecedented quality of
    those who populate our ranks. Yet, the all-volunteer force also
    brings expectations and sensitivities that we must confront
    with regard to how we support our people and how we train them
    and how and when we employ those people.
        To meet the demands of our Nation and the needs of our Army
    and joint force team, we must change the way we man the Army
    Reserve. We must change the way we organize, train, and prepare
    the force. This is a period of deep change from the old to the
    new, but we must forge this change while simultaneously
    continuing the fight in the current war. We are not afforded
    the luxury of hanging a sign outside our Army Reserve command
    headquarters in Atlanta that says ``closed for remodeling.''
    The culture must change from one that expects 1 weekend a
    month, 2 weeks in the summer, to one that understands I am
    first of all an American soldier. Though not on daily active
    duty, before and after a call to active duty, I am expected to
    live to demonstrate Army values. I must prepare for
    mobilization as if I knew the hour and, indeed, the day that it
    would come.
        Thank you, Mr. Chairman. I look forward to your questions.
        Senator Stevens. Thank you, General.
        [The statement follows:]

            Prepared Statement of Lieutenant General James R. Helmly

                                  INTRODUCTION

        Mr. Chairman and members of this distinguished subcommittee, thank
    you for the opportunity and the privilege to testify on behalf of the
    211,000 Soldiers, 12,000 civilian employees, and the families of the
    United States Army Reserve, an integral component of the world's
    greatest Army; an Army at war for a nation at war. I'm Ron Helmly, and
    I'm an American Soldier in your Army, and proud of it.
        Today as we speak, nearly 60,000 Army Reserve Soldiers are on
    active duty in Iraq, Kuwait, Afghanistan, in the continental United
    States, and elsewhere around the world as part of America's global war
    on terrorism, serving courageously and proudly. They are joined by
    another 151,000 Army Reserve Soldiers training and preparing for
    mobilization or resting and refitting after being demobilized. These
    modern-day patriots are your neighbors who live in your communities,
    work in your factories, teach your children, deliver your babies, your
    mail, and share your everyday lives. They have willingly answered the
    call to duty to perform missions they have trained for, and to honor
    their commitment as part of a responsive and relevant force, an
    essential element and indispensable component of the world's finest
    land force, the United States Army.
        The strength and added value we bring to that partnership is drawn
    from the people who serve in our formations. With nearly 25 percent of
    its Soldiers female, and more than 40 percent minority, the Army
    Reserve is the most ethnically and gender-diverse force of all the
    armed services. Overall, 92 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 fields who give of their time and expertise to serve our
    nation.
        Since September 11, 2001, more than 100,000 Army Reserve Soldiers
    have served on active duty as part of the global war on terrorism.
    Tragically, 21 Army Reserve Soldiers have made the ultimate sacrifice
    in service to our nation to keep their fellow citizens and their
    families and neighbors safe and free. We are deeply in their debt and
    honor their memories by our actions here today.

                                 THE CHALLENGE

        Your invitation to testify comes at a time of profound and
    unprecedented change and challenge in the dynamics of our nation's
    security environment. Since September 11, 2001, we have been embroiled
    in a war with wily, determined enemies, who are intent on destroying
    our very way of life. In this global war on terrorism, we are
    confronting regional powers; facing the potential use of weapons of
    terror and mass destruction at home and abroad; and struggling with the
    challenges of how to secure our homeland while preserving our precious
    rights and freedoms. From the start, we have understood that this will
    be no brief campaign or a short war. It will be an enduring global war,
    a protracted war, a long struggle that lacks clear, well-defined
    borders. Have no doubt, it is a war. It challenges our national will
    and our perseverance. It tries our patience and our moral fiber. It is
    a war different, just as all previous wars have been different. Unlike
    previous wars the Army fought here on our own soil, where we in the
    armed services must be continually ready to carry out our mission when
    and where the nation calls.
        As we engage these enemies we recognize that carrying out current
    missions is not by itself sufficient. The very forces that cause this
    war to be different have propelled the world into a period of
    unprecedented change and volatility. We live in a much-changed world
    and we must change to confront it. We must simultaneously confront
    today's challenges while preparing for tomorrow's. The Army will
    maintain its non-negotiable contract to fight and win the nation's wars
    as we change to become more strategically responsive and dominant at
    every point across the spectrum of military operations. The confluence
    of these dual challenges, transforming while fighting and winning, and
    preparing for future wars, is the crux of our challenge--transforming
    while at war.
        Last year was my first opportunity to address this subcommittee as
    the Chief, Army Reserve. I told you then that I was humbled and sobered
    by that responsibility. That feeling remains and indeed has grown more
    profound. The Army Reserve is an organization that daily 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 land force the world has seen. Together with the
    Marine Corps, Navy, Air Force, and Coast Guard, the Army Reserve of
    your Army fights as part of the joint team: the sum of the parts is
    much greater--and that's the power we bring to the battlefield today.

                              ALL-VOLUNTEER FORCE

        A critical issue that should be recognized is that this is the
    first extended duration war our nation has fought with an all-volunteer
    force. January marked the 30th anniversary of the all-volunteer force.
    This tremendous policy change in our Nation has brought the Army
    Reserve, and the Armed Forces, an unheard of quality of people. Yet the
    all-volunteer force also brings expectations and sensitivities that we
    must confront with regard to how we support our people, and how we
    train them, and how and when we employ those people.
        Title 10 of the United States Code directs the Army Reserve to
    provide units and Soldiers to the Army, whenever and wherever required.
    Since 1973, the Active and Reserve components have met this challenge
    with a force of volunteers, men and women who have freely chosen to
    serve their nation. Perhaps more than any other policy decision, this
    momentous move from a conscript force to a force, Active and Reserve,
    manned solely by volunteers has been responsible for shaping today's
    armed forces, the most professional and capable military the world has
    seen. Working through this sea change in how we lead our force has
    highlighted differing challenges that we simply must recognize and
    address if we are to maintain this immensely capable force.
        During a recent conference celebrating 30 years of the All-
    Volunteer Force (AVF) policy, former Secretary of Defense Melvin Laird
    discussed its genesis. He explained that while from the start, it was
    understood that the policy would apply to the Total Force, in reality,
    after the AVF was established, the focus tended to be almost
    exclusively on manning the Active component--understandable since it
    was the tip of the spear. But as a result, manning the Reserve
    components became, in effect, an accidental by-product of manning the
    Active component. This lack of a deliberate focus has hindered the
    development of force-manning policies that recognize the unique nature
    of Reserve service. As a result, the ``one weekend a month and two
    weeks in the summer'' paradigm was created. For almost three decades,
    that paradigm has remained largely intact. The world has witnessed
    major change since we started relying on an all-volunteer force. And
    yet we, in the Army Reserve, allowed the continuance of expectations
    for our most critical element--our people--our volunteers--for a world
    that no longer existed.
        To meet the demands of our nation and the needs of our Army and
    joint force team, we must change the way we man the Army Reserve, we
    must change the way we organize, train, and prepare the force, and to
    accomplish this change, the culture must change. This is a period of
    change from the old to the new. Forging a new paradigm is akin to the
    depth of change the Department of Defense endured when transitioning
    from a conscript force to an all-volunteer force. But we must forge
    this change while simultaneously continuing the fight in the current
    war. We are not afforded the luxury of hanging a sign outside the U.S.
    Army Reserve Command headquarters that says, ``Closed for Remodeling.''
    The culture must change from one that expects ``one weekend a month,
    two weeks in the summer'' to one that understands ``I am, first of all,
    a Soldier, though not on daily active duty, before and after a call to
    active duty I am expected to live Army values; I am expected to prepare
    for mobilization as if I knew the day and the hour that it would come.
    I use my civilian skills and all that I am to perform my military
    duties. I understand that I must prepare to be called to active duty
    for various periods of time during my military career while
    simultaneously advancing my civilian career.''
        The Army Reserve is part of a public institution founded in law.
    Our mission and our responsibility come from this law. I would like to
    note that the law does not say for big wars, little wars, short wars or
    medium wars, it says whenever our Army and our armed services and our
    nation require us, we are to provide trained units and qualified
    individuals. We must change to continue fulfilling the mandate of that
    law while simultaneously perfecting and strengthening the quality force
    we have today.

                                ACCOMPLISHMENTS

        The past year has been a full one for your Army Reserve, marked by
    great efforts and remarkable achievements. Among the most significant
    have been:

    At War--Army Reserve Soldiers Called to Active Duty in 2003
        In 2003, the Army Reserve called to active duty and deployed nearly
    70,000 Soldiers, more than 30 percent of the Army Reserve's 205,000
    Selected Reserve end strength, to Afghanistan, Iraq, Kuwait, and
    theaters around the world in support of Operations Enduring Freedom,
    Iraqi Freedom, Noble Eagle, and other contingency operations.
    377th Theater Support Command Operates Logistics on the Battlefield
        The seamless integration of the Army's Active and Reserve
    components was epitomized by the Army Reserve's 377th Theater Support
    Command during Operation Iraqi Freedom (OIF). The 377th was redeployed
    to OIF after performing as the senior logistics headquarters during
    Operation Enduring Freedom. Once redeployed, the 377th TSC
    (headquartered in New Orleans) supported OIF, and reported directly to
    the Combined Forces Land Component Command.
        The joint and coalition flavor that the 377th brought to the fight
    is a historic first. From the early hours onward, the 377th supported
    combat operations from Kuwait throughout the entire battle space into
    Iraq. The headquarters commanded over 43,500 Soldiers during the
    buildup of forces and subsequent combat phase of OIF, and consisted of
    8 general officer commands and 8 area support groups. The 377th TSC
    helped shape the theater logistical footprint and was responsible for
    supporting the reception, staging, onward movement, and integration of
    all coalition forces, in addition to many other logistical support
    operations.
        Of particular note were the 377th's accomplishments in seaport of
    debarkation operations in Kuwait. This included the largest wartime
    combined/joint logistics over the shore operation in over 50 years, at
    the Kuwait Naval Base. These operations involved over 150 ships, 31,000
    personnel, 4,900 wheeled/tracked vehicles, over 6,000 ammunition and
    general containers, over 29,000 ammunition and general pallets, and
    over 2,500 other pieces of cargo. The base was operated by units of
    377th and the Army Reserve's 143rd Transportation Command
    (headquartered in Orlando).

    Three Consolidated and Streamlined Support Commands Established
                Army Reserve Personnel Command (AR-PERSCOM) Merged with
                        Human Resources Command (HRC)
        Effective October 2, 2003, the St. Louis, Missouri-based Army
    Reserve Personnel Command inactivated and merged with the Total Army
    Personnel Command to form the U.S. Army Human Resources Command (HRC).
    The HRC envisions becoming the nation's premier human resources
    provider. The HRC mission is to execute the full spectrum of human
    resources programs, services, and systems to support the readiness and
    well-being of Army personnel worldwide.
        The HRC executes Army personnel policies and procedures under the
    direction of the Department of the Army G-1. It integrates, manages,
    monitors, and coordinates military personnel systems to develop and
    optimize utilization of the Army's human resources in peace and war.
    HRC is the activity within the Department of the Army responsible for
    managing the Individual Ready Reserve (IRR) and Standby Reserve. The
    HRC will also plan for and integrate civilian personnel management and
    processes to attain a fully integrated HR focus.

                Army Reserve Engineers Integrated with DA ACSIM
        Effective October 1, 2003, the Army Reserve Engineers, formerly
    known as the Office of the Chief, Army Reserve (OCAR) Engineer Staff
    and the U.S. Army Reserve Command (USARC) Engineer Staff, transferred
    to the Army's Assistant Chief of Staff for Installation Management
    (ACSIM) and Headquarters, Installation Management Agency (IMA).
        The former OCAR Engineer Staff (Arlington, VA) was integrated as a
    separate division within the Department of the Army, ACSIM, as the
    ACSIM-Army Reserve Division (ACSIM-ARD). The former USARC Engineer
    Staff (Atlanta, GA) was integrated as a separate division within the
    HQ, IMA, as the IMA-Army Reserve Division (IMA-ARD). The IMA-ARD is
    split-stationed between Arlington, VA and Atlanta, GA.
        The ACSIM-ARD and IMA-ARD program, plan, and execute base
    operations support (e.g., environmental, maintenance and repair, and
    sustainment) and military construction functions on behalf of the Army
    Reserve and its more than 900 Army Reserve centers worldwide and two
    power projection platform installations (Fort Dix, NJ and Fort McCoy,
    WI).

                Army Reserve Chief Information Office (CIO) Merged with DA
                        CIO/G-6
        At a June 25, 2003 signing ceremony, the Department of the Army
    CIO/G-6 and I formalized a memorandum of agreement that integrates the
    Army Reserve, CIO into the Department of the Army CIO/G-6.
        The Army Reserve counts communication and signal technology as one
    of its core capabilities--an enduring skill-rich capability across the
    spectrum of operations. With this integration, the Army Reserve
    demonstrates a commitment to both the transformation of the Army and to
    a common/single Army enterprise. With this integration, the Army
    Reserve Enterprise Integration Office will continue to be responsible
    for C\4\/IT planning, programming, budgeting, and execution support for
    all related Army Reserve appropriations. The Department of the Army
    CIO/G-6 will provide resource guidance and policy oversight, ensuring
    that Army Reserve C\4\/IT requirements are integrated and validated as
    part of broader Army requirements.

    FEDS-HEAL Program Expanded and Improved
        The Army Reserve Surgeon's office worked with the Veteran's
    Administration to expand and improve the Federal Strategic Health
    Alliance (FEDS-HEAL) program. This initiative includes the addition of
    consolidated medical and dental records review, centralized appointment
    scheduling, dental treatment, vision examinations and eyeglass and lens
    insert procurement, and support to Soldier readiness processing
    activities.
        The year began with a concerted effort to enhance Soldier readiness
    in support of Operation Iraqi Freedom. This resulted in 85,000 records
    being reviewed by the FEDS-HEAL Program Office, which subsequently
    initiated and completed 48,000 physical examinations, 31,000 dental
    examinations, 3,200 dental treatment services, 71,000 immunizations
    (not including Anthrax), 22,500 Anthrax immunizations, and 1,000 vision
    examinations. The effort has been sustained via routine SRP support
    across the nation. The effect has been to increase readiness and
    minimize processing time and the frequency of non-deployable Soldiers
    being called to active duty.
        In addition, the effectiveness of FEDS-HEAL was enhanced by the
    program's extension to the Army National Guard, Air Force Reserve, six
    Active component dental treatment facilities, and the occupational
    health programs of the Army National Guard and Reserve.

                             GROWING CONTRIBUTIONS

        Prior to Operations Desert Shield and Desert Storm, Army Reserve
    Soldiers provided minimal support to military missions. That all
    changed with the first Gulf War, when almost 95,000 Army Reserve
    members were called to active duty--and they not only responded but
    performed that duty well, contributing over 14 million duty days of
    support. Since that war, the Army Reserve provided between 1 million
    and 4 million duty days annually to total force missions until the
    terrorist attacks of September 11, 2001. Once again the Army Reserve
    has responded quickly and continuously with over 95,000 members serving
    on active duty and providing nearly 16 million duty days of support to
    the Active forces in fiscal year 2003.
        The increased personnel tempo became steady-state even before
    September 11th as our Reserve Soldiers took their places among the
    rotational forces that are still keeping the peace in Eastern Europe.
    Our military police, medical, civil affairs, and public affairs
    Soldiers continue to provide their skills and capabilities in
    Operations Joint Endeavor and Joint Guardian in Bosnia and Kosovo.
        In the wake of the events of September 11th, came the global war on
    terrorism, Operation Noble Eagle in the United States, and the
    subsequent campaign, Operation Enduring Freedom in Afghanistan and
    Kuwait. Civil affairs units made up 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 reestablishing a free, functioning society. Numerous new
    schools were built and medical aid provided 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 social capability they help create, and every
    contact they make with the native population. And your Army Reserve
    Soldiers are doing an incredible job.
        In Operation Iraqi Freedom our troops have liberated Iraq and
    brought down Saddam Hussein. Today they remain, boots on the ground,
    helping restore the fabric of Iraqi society and its infrastructure and
    return self-determination to the people of Iraq who are free for the
    first time in more than 30 years.
        No one expects this mission to be completed soon or the war on
    terrorism to be won quickly. Both will try our patience and test our
    resolve as a nation and as an Army. Both will require new
    organizational and institutional paradigms and expectations if we are
    to prevail in our present endeavors and prosper in future ones. The
    world will remain a dangerous and unstable place for the foreseeable
    future. We must so organize ourselves and our efforts that we have the
    institutional endurance and robustness to accomplish our missions
    effectively, efficiently, and definitively.

                           THE IMPERATIVE FOR CHANGE

        Despite the clear relevance and strength demonstrated by these
    examples, we, the Army as an institution, are not without our
    challenges. First and foremost, we, the Army Reserve, must evolve as an
    institution to accommodate the changes in our environment. The
    division-oriented, set-piece battles of the past now share the stage
    with conflicts in which smaller interchangeable units will be combined
    in formations tailored to meet specific threats and situations and to
    offer the combatant commander the capabilities he needs to contain and
    defeat the enemy, and prevail upon the shifting, asymmetrical
    battlefields of the twenty-first century.

                             ARMY RESERVE RESPONSE

        The Army Reserve is moving to meet that challenge, preparing
    changes to training, readiness and policies, practices, and procedures.
    We are restructuring how we train and prepare the force by establishing
    a Trainee, Transient, Holdee, and Student Account, much like the Active
    Army, to manage our force more effectively. We are preparing plans to
    support the continuum of service concept recently proposed by the
    Office of the Secretary of Defense, which 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 transition
    proposals.

    Federal Reserve Restructuring Initiative (FRRI)
        Our initiatives concerning the management of individuals and units
    in the Army Reserve are the catalyst of the evolving Army Reserve--The
    Federal Reserve Restructuring Initiative. Six imperatives are necessary
    in order for the Army Reserve to change to a 21st century force. These
    imperatives are: re-engineer the call to active duty process; transform
    Army Reserve command and control; ensure ready units; implement human
    resources life cycle management; build a rotational base in our force;
    and re-engineer individual Soldier capabilities.

    Call to Active Duty Reform
        Changing our industrial-age, Cold-War era call-to-active-duty and
    mobilization process remains a critical component to realizing the
    capabilities and potential of our highly skilled, loyal and sacrificing
    Soldiers. The nation's existing process is designed to support a
    traditional, 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 forces. Rather than a ``force in
    reserve,'' the Army Reserve has become and serves more as a
    complementary force of discrete specialized, skill-rich capabilities
    and a building block for teams and integrated units of capabilities,
    all essential to generating and sustaining forces. The process of
    accessing and employing these forces must be overhauled completely to
    become more efficient, flexible, and responsive to the nation's needs,
    yet sensitive to, and supportive of the Soldier, the family and the
    civilian employer. To do this we require a more decentralized, agile,
    and responsive process that accommodates the mission requirement while
    simultaneously providing greater predictability for soldier, family,
    and employer.
        Changing the way we employ Soldiers starts with changing the way we
    prepare for calls to active duty. The current process is to alert a
    unit for calls to active duty, conduct administrative readiness
    preparations at home station, and then send the unit to the
    mobilization station for further administrative and logistical
    preparedness processing and to train for deployment. This alert-train-
    deploy process, while successful in Desert Shield/Desert Storm, today
    inhibits responsiveness. By changing to a train-mob-deploy model, and
    dealing with administrative and logistical requirements prior to active
    duty, we will reduce the time needed to bring units to a campaign
    quality level needed for operations. This will require us to resource
    more training events at home station through the use of devices,
    simulators and simulations. As you would expect, this shift in
    paradigms will increase pre-call-to-active-duty OPTEMPO beyond the
    current statutory level and will require greater effort and resources
    to achieve. We are confident that the increased costs will pay
    significant dividends in terms of readiness and deployability.

    Realigning Force Command and Control
        Our evolutionary force structure journey actually began 10 years
    ago and is accelerating rapidly today. In 1993 we reorganized to
    produce a smaller, more efficient, and more effective structure. Our
    overall strength was reduced by 114,000 Soldiers, or 36 percent,
    leaving us with a 205,000 Soldier statutory end strength today. We
    continue our journey from a Cold-War Army Reserve force to our current,
    fully engaged Army Reserve, to a changed, even more responsive and
    capable future Army Reserve force that will include a rotational
    capability. In the 1990s, we cut the number of our Army Reserve
    commands by more than half and re-invested those resources 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 journey continues today as we
    mature plans for further realignments and force structure initiatives.
    Between fiscal year 2005 and fiscal year 2008, we will reduce our force
    structure by 35,000 spaces, reinvesting those into remaining units in
    order to man them at 100 percent. Simultaneously, we will redesign the
    remaining force into more capable modular organizations and reduce the
    number of general officer functional commands and the number of general
    officer command and control headquarters subordinate to the Army
    Reserve Command.
        The Army Reserve is the nation's repository of experience,
    expertise, and vision regarding Soldier and unit calls to active duty.
    We do have forces capable of mobilizing in 24 hours and moving to their
    active duty stations within 48 hours, as we demonstrated in response to
    September 11th. This norm of quick and precise calls to active duty
    ability will become institutionalized in the processes and systems of
    the future and give our forces the ability to marshal Army Reserve
    Soldiers rapidly and smoothly.

    Trainees, Transients, Holdees, and Students (TTHS) Account
        The most immediately effective methods for improving Army Reserve
    unit readiness is to harvest the personnel authorizations (spaces)
    associated with those units whose historical missions have been largely
    overtaken by events and whose consequent relevance to war plans and
    missions has been significantly reduced or eliminated all together.
    These spaces can then be used as a holding account that increases unit
    readiness by removing unready Soldiers from troop program unit spaces.
    Currently, unready Soldiers are carried on the rolls for a variety of
    reasons and reported as unavailable to fill force authorized positions.
    With the creation of the TTHS account, these unready Soldiers will be
    assigned to the TTHS account where they will be trained and managed
    until they can be assigned to a unit in a duty-qualified status.
        This procedure can be accomplished within existing manpower and
    funding levels. This initiative will improve the quality of service for
    individual Soldiers and relieve unit commanders of a major
    administrative challenge thus enabling them to better focus on calls to
    active duty and readiness activities.
        The TTHS account will be used to manage vacancies and the
    assignment of qualified Soldiers to authorized positions, thus
    increasing retention with a positive Soldier-oriented life-cycle
    management program.

    Individual Augmentee Program and Continuum of Service
        In today's operational milieu, there is a growing need to establish
    a capability-based pool of individual Soldiers with a range of
    specialties who are readily available, organized, and trained for calls
    to active duty 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 Individual Augmentee Program is intended 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 affecting their readiness, cohesion,
    and future employment effectiveness. This program 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 that
    enables service members to move more easily between their services'
    components during their careers.

    Rotating the Force
        While changing industrial-age mobilization, 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. We are committed to achieving a
    capability ratio that will manage Army Reserve deployments to once
    every four or five years. Predictable and sustainable utilization is a
    key factor in maintaining 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 long
    term source of skill-rich capabilities for small scale contingency
    conflicts and follow-on operations. Properly executed, predictable
    rotations will provide our units with operational experience; provide a
    sense of fulfillment for our Soldiers; impart a sense of order for our
    Soldiers, and even out the work load across the force. The recent
    changes to the Operation Enduring Freedom and Operation Iraqi Freedom
    rotational schedules are an important step in establishing those
    rotational capabilities.

    Rebalancing the Force
        There has been considerable concern raised about what is viewed as
    excessive reliance on the nation's Reserve components both for small-
    scale operations such as the Balkans rotations and for long-term
    contingency operations such as Operations Enduring Freedom and Iraqi
    Freedom. While only 33 percent of Army Reserve troop strength is
    currently called to active duty, and while that level of usage does not
    seem extreme, raw numbers alone do not tell the whole story. Some
    units, notably, military police and truck transportation units are in
    fact over-extended, and it is true that some types of units that have
    been used more in the war on terrorism than others. Military police,
    civil affairs, military intelligence, transportation and biological
    detection and surveillance capabilities are the highest in utilization.
    We are committed to eliminating these pockets of specialty over-stress
    by increasing the number of some units in both the Active component and
    the Army Reserve and Army National Guard.
        The Department of Defense is currently deeply involved in
    determining how to rebalance the Active-Reserve component force mix to
    mitigate the effects of over-use of particular specialties. Currently,
    313 Standard Requirement Codes (types of units) are found exclusively
    in the Army Reserve. The Army Reserve has been able to meet the
    challenges with this structure thus far, but clearly the structure
    requires change and perhaps augmentation to meet the continuing demand
    for these skill-rich capabilities that are more practically sustained
    in a Reserve component force.

    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 four straight years from 2000 to 2003. In fiscal
    year 2004, however, we are 182 accessions short of expected year-to-
    date mission out of a projected 10,156 accessions. While this is cause
    for some concern, I am not alarmed over this because we are currently
    at 103 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. 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, has 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 transferred from the Accessions Command to the Army Reserve.
    Tenets of this transfer included: 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.
        As for the retention of this all-volunteer force, during the mid-
    eighties, at the height of the Cold War, the Army Reserve averaged a
    36-38 percent officer and enlisted attrition at a time when we were
    never used. Today, after 8 continuous years of calls to active duty and
    use since 1997, we are averaging 24-26 percent attrition.
    Interestingly, the retention rates appear to be higher in those units
    that get called to active duty than in those that are not called. Our
    Soldiers feel the pressure, they understand the sacrifice, and they
    recognize their contributions to the common good and their fellow
    citizens. They are proud and they are determined. I am profoundly
    impressed by their performance, their commitment, and their dedication
    every day.
        Historically, our retention program has been 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. 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.
        In response, the Army Reserve developed the Commanders 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 Commanders 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 Commanders Retention Program, the
    Army Reserve has reduced enlisted troop program unit attrition by
    nearly 12 percentage points. The enlisted attrition rate in fiscal year
    2003 was 25.5 percent.
        The attrition rate for fiscal year 2004 is projected to increase to
    30.4 percent, due to an increase in the Expiration of Term of Service
    (ETS) population, expected retirements as well as recalls to active
    duty. The exact impact of demobilization of troops rotating out of
    theater having served in OIF1 and OEF3 remains to be seen. The next
    several months will tell the tale as stop-loss provisions are lifted 90
    days after our troops are released from active duty.
        Overall, the Army Reserve successfully accomplished its fiscal year
    2003 recruiting mission while achieving the Department of the Army and
    Department of Defense quality marks. Beginning fiscal year 2004, the
    Army Reserve transitioned the U.S. Army Recruiting Command (USAREC)
    from a contract recruiting mission to a ship mission as well as began a
    three-year phased implementation of the Delayed Entry Program (DEP)
    similar to the Active Army. To support these efforts the Army Reserve
    recruiting mission will increase over the next three years and will
    stabilize by fiscal year 2007. The purpose of these two initiatives is
    to better utilize our training seat resources and to reduce overall
    unit attrition. The accomplishment of the recruiting mission will
    demand a large investment in time on the part of our commanders, 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 also 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 affects 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.
        The Army Reserve is currently experiencing a shortfall of 4,200
    company grade officers. 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.
        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
        A functional family readiness program is important in peace and
    critical in war. Family programs provide invaluable family assistance
    during peacetime and calls to active duty, 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 25 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.
        In preparation for calls to active duty deployment, these
    volunteers and staff provide an extensive briefing for both families as
    well as Soldiers. 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.
        The average Army Reserve soldier is older and more likely to be
    married than the average active component soldier. While all families
    face hardships when their soldier is called to the colors, Army Reserve
    families have additional challenges as they generally do not live near
    an installation that can provide services. While historically we have
    relied extensively on volunteers, experience has shown we must increase
    the amount of full time staff available for families. We will soon have
    25 additional family readiness group assistants positioned in locations
    where they can assist geographically isolated families of mobilized
    soldiers. We also have begun the process of accreditation to ensure the
    program delivers a consistent level of service to families. We continue
    to work on obtaining more resources for the program.
        During Desert Shield/Desert Storm Army Reserve family readiness
    programs were sparse. Today, these programs are extensive, and they are
    providing a support network for our families. We have been able to meet
    the needs of our deployed Army Reserve Soldiers and will continue to do
    so. 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 that
    supports the continental United States. With this redesign, the Army
    Reserve would have the technological capability to sustain existing
    Army systems or field new Army systems to meet readiness requirements.
    The redesign will also enhance the timely dissemination of information
    supporting command and control of areas of mobilization, training, and
    overall data exchange.

                Force Protection
        The Force Protection program within the Army Reserve is designed to
    provide security and preparedness to meet the full spectrum of threats
    facing Army Reserve facilities and stand-alone facilities worldwide.
    The program is an integrated set of five security activities: physical
    security, anti-terrorism, law enforcement, information operations, and
    installation preparedness.
        The timely and accurate flow of threat information is the
    foundation of the overall Force Protection program within the Army
    Reserve. Vulnerability and risk assessments coupled with current threat
    information provides a solid crisis management planning platform for
    the Army Reserve stand alone facilities and installations.
        The Army Reserve Force Protection program enables commanders to
    prioritize facilities and focus resources using a proven decision
    making methodology. The Army Reserve Force Protection program is being
    used to dramatically repair and upgrade facilities, train leaders and
    integrate security programs to ensure fully capable units are available
    to support combatant commanders in the Global War on Terrorism.
        Installation Preparedness concentrates on detailed planning,
    integrated training and for the coordinated response of first
    responders such as fire, police and emergency services to incidents
    involving weapons of mass destruction or industrial accidents and
    disasters on or near Army Reserve facilities and installations.
        The Army Reserve is challenged with its existing military and
    civilian manpower structure. To sustain the current Force Protection
    program and meet the demands of emerging requirements, we must expand
    contract requirements for physical security, anti-terrorism
    vulnerability and risk assessments, force program leader training and
    exercise planning for the entire Army Reserve.
        Currently, the Army Reserve meets installation access control
    requirements, but sustainment of access control combined with the
    additional stand alone facility level security requirements associated
    with the global war on terrorism has become a challenge.
        Funding to support these critical security programs will allow the
    Army Reserve to continue to repair facilities, train leaders, and
    integrate security programs to ensure fully capable units are available
    to support combatant commanders in the global war on terrorism.

    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.
    The need to quickly and efficiently deploy Army Reserve units
    invalidates the old Cold War planning that Army Reserve units will have
    sufficient mobilization time to replace non-interoperable equipment or
    fill shortfalls deliberately accepted as ``necessary risk.'' Retaining
    older, less effective equipment or filling the Army Reserve's
    authorized levels of equipment only partially, leads to delays as a
    limited pool of Army Reserve equipment is transferred between
    deploying, redeploying and non-deploying units and Army Reserve
    Soldiers are trained or retrained to operate more modern equipment,
    they did not have access to during drills and annual training. The
    National Guard and Reserve Equipment Appropriation (NGREA) has been a
    significant and essential tool to improve the Army Reserve through
    force modernization.
        Meeting these challenges requires not only that the Army Reserve be
    issued modern, interoperable equipment, but that the resources to
    maintain the readiness of this equipment also be provided. Sufficient
    funding needs to be provided to allow the Army Reserve to reach higher
    standards of readiness than currently maintained as an element of risk
    accepted by the Army under constrained budgets. Until the Army Reserve
    can be fully equipped with modern items, sustaining the combat and
    deployment readiness of the equipment currently on hand is essential.
    This requires full funding of operations and maintenance requirements
    and continuing support of the Army's depot maintenance program, which
    is vital to maintaining the readiness of Army Reserve equipment, while
    extending service life, reducing life cycle costs and improving safety
    for Army Reserve Soldiers.
        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. The Army Reserve is continuing to support the Army's
    Transformation through the assignment of equipment from Army Reserve
    units to Army prepositioned stocks (APS) and stay-behind equipment
    (SBE) in Iraq and Afghanistan.
        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.
    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 1,160 communities across all 50 states, 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 training centers
    and support facilities worldwide, whose 40 million square feet of space
    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 sapping Soldier morale and esprit de corps.

                                    SUMMARY

        In today's national security environment, the Army Reserve has many
    challenges--we accept these without hesitation. These challenges find
    expression in our reliance on Reserve component forces in contingency
    operations. Historically our nation has placed great reliance on
    Reserve components of Soldiers, Marines, Sailors, and Airmen to expand
    the armed forces for operations during time of war. As BG David
    Fastabend notes in his unpublished white paper, Serving a Nation at
    War; a Campaign-Quality Army with a Joint and Expeditionary Mindset,
    ``Although the fundamental nature of war is constant, its methods and
    techniques change chameleon-like to match the strategic context and
    capabilities at hand.'' We must also change to accommodate the twenty-
    first century strategic context and operational reality. 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 man, train, 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.
        Thank you.

    STATEMENT OF VICE ADMIRAL JOHN G. COTTON, CHIEF, NAVAL
                RESERVE
        Senator Stevens. Admiral, I think this is your first
    appearance before our committee. We welcome you and would be
    happy to have your statement, sir.
        Admiral Cotton. Thank you, sir. I appreciate the
    opportunity to testify before the committee.
        There are many heros in the room today and many heros
    overseas. I would like to call to everyone's attention the
    brave actions here in the United States just a few weeks ago at
    the Baltimore Reserve Center where on a Saturday afternoon in a
    big storm 26 reservists went out in a mike boat and in a matter
    of minutes rescued 21 civilians, some of them near death, all
    of them would certainly have perished if these reservists had
    not rescued them. I am proud to say that in 10 days we will
    have a ceremony at the Reserve Center and appropriately
    recognize all of them with awards. I think what that
    demonstrates is not only are we fighting overseas, but we have
    capability amongst our Reserve centers, our Guard armories here
    in this country which will provide the backbone for homeland
    security both now and in the future.
        The Naval Reserve is very busy. We have about 2,700 folks
    recalled overseas, over 500 cargo handlers and 500 Seabees are
    in action today in theater. We also have another 20,000 naval
    reservists on orders just this week providing operational
    support, as well as undergoing training to support the fleet.
        We have fully integrated with the Navy. The Chief of Naval
    Operations and I work together to make sure that everything we
    do is in synergy to increase warfighting wholeness. In
    particular, the very much appreciated NGREA account is taken by
    Navy, and we look where we can apply it to Reserve equipment so
    that we can increase that warfighting wholeness both for
    current readiness and future readiness.
        One other word I would like to mention is alignment. In the
    last 6 months in particular, we have aligned our headquarters
    and key individuals to create a synchronization or an increased
    synergy between the Navy and its Naval Reserve, which is very
    important in this global war on terrorism. There is currently a
    zero-based review going on of every Naval Reserve unit and
    billet, and then once we lay this down over the next 2 years,
    we will properly resource and program this force along with
    Navy in the pillars of SeaPower 21.
        I thank you for your attention, your time. I look forward
    to your questions, sir.
        Senator Stevens. Thank you. We did notice that heroic
    action of your people and I think they do deserve recognition.
    Let us know if we can help in any way on that.
        Admiral Cotton. Yes, sir.
        [The statement follows:]

               Prepared Statement of Vice Admiral John G. Cotton

                                    OPENING

        Mr. Chairman and members of this subcommittee, thank you for the
    opportunity to speak with you today about some of the important changes
    that are happening in the Navy and its Reserve, and to give you a
    report on our accomplishments and current state of readiness.
        As we look back, we see clearly that the tragic attack on our
    country on September 11, 2001, and the operations that followed,
    prompted significant changes for the Armed Forces, including the Guard
    and Reserve. Members of the National Guard and the Reserve have been
    called upon more in this global war on terrorism than at any other time
    since World War II. The Chief of Naval Operations (CNO) has said,
    ``Change to make us better is completely necessary . . . to make our
    Navy even better and to build the 21st century Navy, and the Reserve is
    a key part of our growth and our future.''
        We are meeting the CNO's challenge head on, changing our culture
    and the shape of the force, moving away from an obsolete Cold War
    construct to one that provides tailorable, flexible capability in
    support of 21st century warfighting. Active-Reserve Integration is
    about more than gaining business efficiencies--it is about capitalizing
    on the skills, dedication and patriotism of the citizen-Sailors that
    make up our force. The Navy's Reserve will be structured, equipped and
    trained to complement the capabilities inherent in SeaPower 21, and
    will leverage technology to take advantage of skills and abilities
    carried by our Sailors on the coasts and in the heartland of America.
        Integration is a journey, and we are sharing this voyage with our
    active component shipmates. The CNO and senior fleet leadership have
    taken ownership of their Reserve, from recruiting and training, to
    equipment and readiness. The fleet is identifying the capabilities it
    will require the Navy's Reserve to provide, an input that the active
    and reserve components together will use to design and shape the force.
    This new sense of ownership will build closer day-to-day operational
    relationships and allow for the seamless connection of total force
    capabilities in the right place, and at the right time.
        To enable recapitalization of the Navy, CNO has directed that
    efficiencies be realized in all areas of operations, and in both Active
    and Reserve components. The Navy is fully integrating its Reserve into
    the new Fleet Response Plan (FRP) through both unit level and
    individual augmentation during day-to-day operational support, while
    maintaining the ability to mobilize reservists and equipment to support
    expanded surge operations around the globe. The fundamental construct
    of FRP is a surge-ready fleet, able to sail to any troubled spot in the
    world, swiftly defeat the enemy, and then reconstitute in minimum time.
    Therefore, the Navy and its Reserve will continually be in a surge
    status requiring minimum time to reset. Experienced and trained Reserve
    personnel are ideally suited for this surge capability. The basic 24
    drill days per year and 14 days of annual training are provided at 20
    percent of the cost of full time personnel, and they leverage prior
    Navy investment in training and maintain a continuum of service. Most
    reservists have both fleet experience and critical civilian skills to
    contribute to this concept of efficient utilization, and will fit
    perfectly into the unique surge mission requirements of the Navy's
    Reserve as envisioned in SeaPower 21.
        The Navy's Reserve has always been and will continue to be an
    important element of the Navy's Total Force. In the Chief of Naval
    Operations' own words, ``. . . with the Navy's Reserve playing such a
    vital role in our day to day operations, it is imperative that we
    continue to properly assess and fund reserve personnel and readiness
    requirements now and in the future.'' The Navy's Reserve contributes
    daily to support fleet operations and provides critical surge and
    sustainment capabilities to meet real world contingencies. However, to
    remain relevant, reservists must be even more accessible, flexible and
    adaptable to better support fleet operations both at home and abroad.
    Every structural change being considered for the future is intended to
    ensure that the Navy's Reserve remains an important element of the Navy
    Team. Providing a more tightly integrated force creates the opportunity
    for Reservists to train, deploy and operate alongside their active
    counterparts using current doctrine, concepts and tactics, as well as
    the most modern equipment in the Navy's inventory.
        The Navy is evolving, and its Reserve is in step with the changes.
    For instance, Navy is aligning missions by capabilities and has created
    Fleet Forces Command to meld the fleets into a single, integrated
    force. The first change we made to support this alignment was to assign
    both the Commander, Naval Reserve Force (CNRF) in Washington, DC, and
    Commander, Naval Reserve Forces Command (CNRFC) in New Orleans, LA,
    ``additional duty'' to Commander, Fleet Forces Command (CFFC) in
    Norfolk, VA. For the first time ever, one fleet commander acting for
    all other Navy commanders, is conducting a Zero Based Review (ZBR),
    where every Reserve unit and billet is being reviewed for capability
    relevance and alignment with fleet requirements, and then forwarded to
    CNO for inclusion in future budget deliberations and requests. The
    Navy's Reserve will continue to provide mission capable units and
    individuals to the Navy-Marine Corps team throughout the full range of
    operations, from peace to war, and will do so in a much more efficient
    and integrated manner. The Navy has taken charge of its Reserve Force
    to further enable it to provide predictable and effective support to
    the fleet, ready and fully integrated, in the most efficient manner
    possible.

                        NAVY RESERVE PRIORITIES FOR 2004

        The Reserve's priorities have been aligned with those established
    by CNO for the entire Navy.
    Priority #1: Manpower
        Manpower is, and will remain, the Navy's number one priority. The
    Navy competes for the best people, and we are engaged on two fronts:
    recruiting the right people and improving retention. The focus is on
    capabilities and our recruiting objectives will be driven by fleet
    requirements. We need to attract and retain smart and savvy sailors to
    employ the advanced technologies that we will rely on in the network
    centric future.
        Navy leadership understands the consequences of sustained and
    repeated recalls on our reserve personnel, their families and
    employers. Our judicious use of individual and unit mobilizations has
    demonstrated the Navy's efficient, tailored and volunteer-based method
    of mobilization. Retention remains at an all-time high and post-
    mobilization surveys of recalled personnel indicate strong job
    satisfaction. Our proud, patriotic citizen-Sailors have, and will
    continue, to answer the call in defense of freedom and liberty. CFFC's
    integration initiative will build on this success by increasing mission
    relevance, and ensuring that every reservist is delivering the
    capability and expertise required by the fleet and the Joint Force
    Commander.
        We are pleased to report that recruiting remained strong in 2003.
    Last year we achieved 106 percent of our enlisted recruiting goal.
    Largely due to record high retention rates in the active duty Navy, 40
    percent of these enlisted accessions were Non-Prior Service (NPS)
    personnel. While very qualified, many with advanced degrees, these NPS
    personnel require additional training before being assigned
    mobilizations billets. Officer recruiting, also challenged by high
    retention in active duty warfare designated communities, finished at 91
    percent of the fiscal year goal. Our recruiters met goal last year for
    both officer and enlisted Full-Time Support personnel. The Navy's
    Reserve had an attrition rate of 17.8 percent in fiscal year 2003, and
    ended the year manned at 100.2 percent of authorized end strength.
    Although we are pleased with our results in these important manpower
    categories for last year, fiscal year 2004 brings similar challenges.
    We believe we can meet our recruiting goals in part because Reserve
    Recruiting became one of the first commands to fully align with their
    active duty counterpart. Commander, Naval Reserve Recruiting Command
    (CNRRC) in New Orleans, LA, became Commander, Naval Reserve Recruiting
    Region (CNRRR) and is now aligned with the Navy Recruiting Command
    (CNRC), in Millington, TN. We are very optimistic that prototype
    recruiting stations combining both active duty and full-time reserve
    recruiters opening this year will result in improved recruiting
    efficiencies. Furthermore, active duty commands are being directed to
    increase their efforts to keep trained and talented personnel leaving
    the active force on the Navy team by recruiting them directly into the
    Navy's Reserve. Keeping Navy veterans serving, especially those with
    critical skills and qualifications, is very important and has the
    support of the entire chain of command, both active and reserve.
        Navy Reserve end strength requested in the fiscal year 2005
    President's Budget is 83,400, a decrease of 2,500 from fiscal year
    2004. This decrease is due primarily to the rebalancing of Naval
    Coastal Warfare units into the active component, the decommissioning of
    a Fleet Hospital, and Medical program billet reductions due to force
    restructuring. We expect that the requested end strength in this budget
    is sufficient for the Navy's Reserve to meet fleet requirements.
    However, ongoing initiatives and total force capability analysis may
    result in modifications to this target in the future.
    Priority #2: Current Readiness
        During Operation IRAQI FREEDOM, the Navy had eight carrier strike
    groups, six expeditionary strike groups, and nearly 100,000 Sailors and
    Marines deployed around the world in support of the Global War on
    Terrorism. The near term goal for the Navy's Reserve is to provide a
    force shaped by fleet requirements and driven by SeaPower 21. To
    achieve this goal, we will continue to align with the Navy, measure
    risk, present options and rapidly move ahead with assignment of units
    and personnel to match requirements with capabilities. These
    assessments will be driven by the question: What resources can we apply
    that will enhance effectiveness and efficiency, and will contribute to
    warfighting wholeness? If the analysis indicates that the number of
    reservists should be adjusted to meet current requirements and future
    capabilities, we will make that happen. If that means that some
    equipment must be retired or realigned to support the active force,
    then we will ensure that the Navy's Reserve is integrated with the
    fleet and trains on and operates the Navy's newest, most capable
    platforms and systems.
        Following the attack on U.S.S. Cole, the Navy recognized the
    immediate need for increased force protection and added 6,619 new
    active component and 1,379 reserve component anti-terrorism and force
    protection billets. Current readiness was also enhanced in the fiscal
    year 2004 budget with funding to operate an additional frigate (FFG) in
    the Navy's Reserve Force, execute flying hours at 100 percent of
    requirement, and support ship maintenance to meet CNO's goal. Aviation
    depot maintenance funding was increased to ensure that 100 percent of
    CNO engine and airframe maintenance goals are achieved. In fiscal year
    2004, base support funding has been consolidated Navy-wide under
    Commander, Naval Installations to eliminate redundancies, generate
    economies of scale, and provide enhanced readiness support to shore
    activities, both Active and Reserve. It is expected that further
    efficiencies will be realized by combining base support for active and
    reserve personnel where overlaps and excess capabilities exist.
        The very much appreciated National Guard and Reserve Equipment
    appropriation for fiscal year 2004 provided readiness support
    modifications, upgrades and procurement of items for expeditionary
    warfare units, trainers and simulators to improve the availability of
    readiness training, as well to acquire eight Swiss F-5 aircraft to
    replace aging Reserve adversary training assets. The appropriation also
    included funds to complete the last two upgrades to Reserve F/A-18As to
    ``A-Plus,'' providing precision strike capability and placing them on
    par with fleet F/A-18Cs. Funds were first applied to improve current
    readiness and then to enhance future readiness, and were coordinated
    with Navy warfare and resource sponsors.
    Priority #3: Future Readiness
        Improved accessibility and integration are the cornerstones of the
    Navy Reserve's contribution to future readiness. For example, full
    integration will ensure that Navy Reservists in aviation Fleet Response
    Units (FRU) will be able to quickly activate and support global
    operations under the CNO's Fleet Response Plan (FRP). Our vision is a
    reserve force that is better prepared and more capable for both unit
    and individual mobilization requirements. Co-locating our reserve
    personnel and hardware with their supported fleet units streamlines the
    activation process enabling individuals to train alongside, and be more
    familiar, with the units they will augment. Co-location enables FRU
    aircrews to train and operate state-of-the-art equipment, as well as
    leverage active force tactics and doctrine. Reserve experience and
    availability can also be used to provide onsite fleet support.
    Concurrently, retaining and strengthening the Squadron Augment Unit
    (SAU) concept continues the vital contribution that our experienced
    reserve instructor and maintenance cadre provides to the Fleet
    Replacement Squadrons (FRS). As an aside, every pilot flying combat
    missions in OPERATION ENDURING FREEDOM/OPERATION IRAQI FREEDOM was
    trained by dedicated and professional Navy Reserve aviators providing
    airwing adversary, Fleet exercise and training command support.
        Under the guidance of Commander, Fleet Forces Command, the Navy has
    begun an initiative that will lead to a more integrated total force in
    which Navy Reserve capabilities are tied directly to active units in
    support of SeaPower 21 mission capabilities. The active component is
    currently engaged to clearly articulate requirements for the Navy's
    Reserve. CFFC's reserve integration cell will recommend the future
    Reserve force structure necessary to meet these fleet capability
    requirements. Coordination has already begun with a complete zero-based
    review of Navy Reserve capabilities. Active duty commands have been
    tasked to identify their Reserve support requirements and to describe
    potential new capabilities they need from their Reservists to more
    readily meet their mission requirements.
        To fully realize SeaPower 21, the Navy and its Reserve will align,
    organize, integrate and transform around the four warfighting pillars
    of Sea Strike, Sea Shield, Sea Base and FORCEnet. SeaPower 21 embodies
    a number of maritime capabilities that are in the domain of expertise
    the Navy brings to the Joint Force. To provide sufficient operational
    range and depth to many of these capabilities, and to efficiently and
    effectively meet its requirements as part of the Joint Force, Navy must
    leverage its investment in the extraordinary capabilities, critical
    skills, innovative nature, and entrepreneurial spirit of its reserve
    personnel.
        We support the Secretary of Defense's goal of rebalancing the
    active-reserve component force mix to eliminate the need for
    involuntary mobilization, especially during the first 15 days of an
    operation. Our fiscal year 2005 budget submission reflects the
    additional active-reserve rebalancing changes needed for the Navy to
    meet this goal.
        At present, no Homeland Defense/Homeland Security (HLD/HLS) mission
    has been assigned to the Navy's Reserve, but the Assistant Secretary of
    Defense for Reserve Affairs and the Assistant Secretary of Defense for
    Homeland Defense are conducting a study to determine the appropriate
    role of reserve components in these critical areas. Upon completion of
    the study, new and existing naval capabilities present in the Navy's
    Reserve could be assigned HLD/HLS missions. These might include Harbor
    Defense, Port Security, Maritime Surveillance and Tracking, AT/FP
    roles, Joint Fires Network Units and maintenance of shipping channels.
    As we move forward, evolving missions will continue to influence our
    force shaping and integration initiatives, with the endstate being a
    more combat-capable Total Force.
    Priority #4: Quality of Service
        Quality of Service is the combination of quality of life and
    quality of work. It is about achieving balance, personal and
    professional. The Navy will continue to strive to make available the
    best facilities and equipment to train, deploy and fight, and our
    Reservists will benefit from ongoing integration and alignment efforts.
    Ensuring that our Navy's Reservists can rely on predictability,
    periodicity, pay and benefits, will greatly assist each Sailor to
    achieve that balance.
      --Predictability.--Every Sailor in the Navy's Reserve wants to make a
            difference and needs to know with reasonable advance notice,
            when and where they will train or perform operational support,
            whether mobilized, on active duty orders or on routine drills.
            As part of a fully integrated force, Reservists will train or
            perform meaningful work that provides or enhances capabilities
            required by the fleet. Additionally, individual reservists will
            be able to anticipate drills and periods of active duty through
            processes that will track and match necessary skills to
            appropriate billets or orders.
      --Periodicity.--Individual reservists' availability varies during the
            year and with each employer. These periods of availability can
            be leveraged to enable each Sailor to provide meaningful fleet
            support. ``Flexible drilling'' is encouraged to allow
            reservists to combine traditional drill weekends to work for a
            week once a quarter, two weeks every six months, or even for
            several weeks once a year to satisfy participation
            requirements. If a unit or individual is called to mobilize,
            reservists should receive as much notice as is possible, with a
            target of 30 days, to help minimize potential employer or
            family conflicts.
      --Pay and Benefits.--Reservists should be assured that their benefits
            will appropriately address their individual and family needs,
            whether serving at home or abroad. Development of a single pay
            and benefits system continues to be a priority to standardize
            the administration of both active and reserve personnel in all
            services.
        Continuous professional improvement is important to every Sailor,
    active and reserve. Accordingly, the Navy's Reserve is a full partner
    with the Navy in the Sea Warrior initiative, enabling an individual to
    easily access and monitor their career progression and future options.
    Navy Reservists have full access to both the Navy-Marine Corps Intranet
    (NMCI) as well as the Navy Knowledge Online (NKO) web portal, which
    connects every Sailor, active, reserve or retired, and families, to
    information that will significantly aid in their overall education,
    growth and development.
    Priority #5: Alignment
        The Navy will continue to take an active role in optimizing the
    balance of active and reserve forces to support our National Military
    Strategy (NMS) and win the Global War on Terror (GWOT). We recognize
    that this balance is dynamic and we continuously review our force
    structure and capability in order to improve integration and alignment.
    Integration provides the Navy's Reserve a path to current equipment,
    concepts and tactics, thereby increasing combat readiness and
    warfighting wholeness. Through integration, the Navy's Reserve will
    become a more capable and agile force with increased warfighting
    capability and a much-improved ability to meet fleet requirements.
        In support of alignment and efficiency, we recently consolidated
    three Navy Reserve staffs in New Orleans into a single Echelon III
    staff to function as the provider of reserve capabilities to Fleet
    Forces Command. Commander, Naval Air Forces Reserve (CNAFR) has been
    assigned as Vice Commander Naval Reserve Forces Command, further
    aligning reserve capabilities under a single structure to work with the
    active component to fully align and integrate the Navy's Reserve. CNAFR
    has also been assigned additional duty to Commander, Naval Air Forces
    (CNAF) in San Diego, CA, to align active and reserve aviation
    capabilities.
        We are embedding key Full-Time Support staff in headquarters, fleet
    and type commands. We have developed strategic linkages between Reserve
    Forces Command and Fleet Forces Command with tangible results, and
    continue to build new bridges throughout the Navy. This was done to
    more closely align reserve and active forces and to improve combat
    effectiveness and efficiency. These actions will strengthen ties
    between the Navy's active and reserve forces and are the first steps in
    an overall initiative that seeks to define, and subsequently forge a
    cohesive ``total force'' team that can more effectively satisfy the
    Navy's operational requirements. We will continue to identify and
    propose practical ways to better integrate reservists and equipment
    with the fleet, and have taken steps to accelerate and solidify our
    integration efforts. We are also participating in a new officer
    exchange program with other Guard and Reserve components, starting with
    the Army National Guard. This initiative will lead to full integration
    at National Guard State Headquarters Command Units to support Northern
    Command's Homeland Security initiatives.

                                ACCOMPLISHMENTS

        Today's strategic environment requires naval forces that can
    rapidly deliver decisive combat power through a rotational, surge
    capable force. Operations ENDURING FREEDOM and IRAQI FREEDOM
    demonstrated not only the tactical value of this operational concept,
    but also the potent warfighting capabilities of a flexible, responsive
    maritime force, operating either independently or as part of a broader
    Joint Force. The Navy's Reserve played a significant role in the surge
    to war.
        On September 17th, 2001, the first mobilization orders were sent to
    the force. Since that day, 4,537 officers and 18,436 enlisted personnel
    have been mobilized, providing operational support to either their
    supported commands or to Combatant Commanders around the world. With
    respect to OPERATION IRAQI FREEDOM, 12,046 Navy Reservists served their
    country in Navy and joint commands. While some units and equipment were
    mobilized in support of OPERATION IRAQI FREEDOM, we have been able to
    maximize individual mobilizations to support requirements submitted by
    Combatant Commanders, validated by the CNO's staff, and ordered to
    active duty by the Chief of Naval Personnel. For example, 362 drilling
    reservists were mobilized to augment the staff of Commander, U.S. Fifth
    Fleet, the Naval Component Commander for Commander, U.S. Central
    Command and other subordinate commands. These Navy Reservists supported
    this active duty staff in the development of the OPERATION IRAQI
    FREEDOM air plan. Since January 2003, 478 Navy Reservists attached to
    Navy Cargo Handling Battalions across the United States were mobilized
    to facilitate the movement of cargo from bases in the United States and
    overseas to the Central Command area of operation theater in support of
    Operation IRAQI FREEDOM.
        A group of Navy Reservists from Fort Worth, TX, made history on the
    decks of U.S.S. Theodore Roosevelt (CVN 71). For the first time since
    the Korean War, an entire Navy Reserve tactical aviation squadron
    deployed aboard an aircraft carrier when the ``Hunters'' of Strike
    Fighter Squadron 201 were ordered to active duty. Completing a short
    notice workup, the squadron fully integrated with the active airwing,
    completed 224 combat sorties, delivered 125 tons of ordnance in combat,
    and impressed everyone with their experience, dedication and
    capabilities.
        When 800 active duty medical personnel from the National Naval
    Medical Center (NNMC), Bethesda, MD embarked in USNS COMFORT in March
    2003 and another 498 NNMC medical personnel deployed as part of
    Casualty Receiving and Trauma Ship's team members, 548 Navy Reservists
    were recalled to support the National Naval Medical Center. Civilian
    trauma and orthopedic surgeons were mobilized to treat the wounds of
    those Sailors and Marines who required more specialized care.
        843 Naval Reservists have been activated to support Marine Forces
    during the war, including 592 enlisted corpsmen assigned to provide
    critical battlefield medical support to front-line Marine units. 134
    Navy Reserve corpsmen have recently been recalled to support the
    Marines' rotation in conjunction with Operation IRAQI FREEDOM II. Of
    these, 24 Reservists are volunteers for their second year of
    activation, while the remainder have just begun their first activation
    under the current partial mobilization authority.
        Another success story was the mobilization of the ``Firehawks'' of
    Helicopter Combat Support Special Squadron Five (HCS-5) based at Naval
    Air Station North Island, CA, and their subsequent deployment to Iraq,
    where they continue to support CENTCOM operations. In March 2003,
    seventy percent of this squadron's Selected Reservists were recalled to
    active duty in preparation for Operation IRAQI FREEDOM. This squadron
    is composed solely of drilling Reservists and Full-Time Support
    personnel, and is one of two squadrons in the Navy dedicated to Naval
    Special Warfare support and combat search and rescue. The Firehawks fly
    the latest model of the HH-60H Seahawk helicopter and their average
    pilot has more than 12 years of experience flying, and most have over
    2,500 military flight hours. Although the majority of their flights in
    the Iraqi theater have supported special operations ground force
    missions, the squadron has other warfighting capabilities. The
    Firehawks have participated in operations in urban areas and have
    assisted with medical and casualty operations. As of the 5th of March,
    2004, the squadron had flown 916 sorties and logged 1,738 flight hours.
        Navy Reservists from the Redwolves of HCS-4 based at Norfolk Naval
    Base will soon deploy to relieve the combat veterans of HCS-5. This
    critical capability embedded in the Navy's Reserve has proved to be
    invaluable in the support of special operations and the development of
    new tactics in the hostile urban warfare environment. It is a
    predictable and periodic capability that was ready when called upon;
    just what the vision of future reserve contributions will be. They have
    trained with the special warfare units and now deploy with them to
    combat.
        Recently, over five hundred members of the Navy Reserve
    Expeditionary Logistics Support Force have been mobilized in support of
    OPERATION IRAQI FREEDOM II, and it is anticipated that over five
    hundred Seabees will be mobilized as well. Their combat service support
    capabilities are in demand to help relieve the U.S. Army and coalition
    forces in Iraq.

                                    SUMMARY

        Before I close, I would like to thank this committee for the
    support you have provided the Navy's Reserve and all of the Guard and
    Reserve components. Last year's budget included several positive
    benefits that will help us recruit and retain our talented personnel to
    better support the Navy and joint commands. As you can see, this is a
    very exciting period for the Navy and its Reserve. The CNO has
    challenged every Sailor to review current ways of doing business and
    find solutions to improve effectiveness and find efficiencies. The
    Navy's Reserve has accepted the challenge and promises the members of
    this committee that we will continue to do just that--examine all
    facets of our operation to support the fleet and accelerate our Navy's
    advantage.

    STATEMENT OF LIEUTENANT GENERAL DENNIS M. McCARTHY,
                COMMANDER, MARINE FORCES RESERVE
        Senator Stevens. General McCarthy.
        General McCarthy. Thank you, Mr. Chairman, Senator Inouye.
    It is a great honor to represent the men and women of the
    Marine Corps Reserve and the sailors who serve with us today.
        I am proud to report to you that the past investments that
    this committee and indeed the entire Congress has made in the
    Marine Corps Reserve have paid real dividends in the global war
    on terrorism. Since my testimony last year, the Marine Forces
    Reserve has been engaged in both combat and the stability
    operations and in just about every other activity that the
    United States Marine Corps has been engaged in. We have also
    prepared for future operations, and today we have Marine Forces
    Reserve units in Iraq, in Afghanistan, and in the Horn of
    Africa and elsewhere around the world.
        I am also pleased to report to you that while all this has
    been going on, we have continued to meet our recruiting goals.
    We have, in fact, slightly exceeded our retention goals and the
    trends, in terms of sustaining this force, are very positive.
    Like everyone, that is something that we watch very, very
    closely because it is not something that we can fix after we
    get behind on it. But I believe that the current trends are, as
    I say, very positive and I believe that we will be able to
    sustain this capability over the long haul.
        I look forward to responding to your specific questions.
    Thank you, sir.
        Senator Stevens. Thank you very much.
        [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

        As the last few years have demonstrated, the Marine Corps Reserve
    is a full partner in our Total Force. Marine Corps Reserve units
    participated in all aspects Operation IRAQI FREEDOM, providing air,
    ground, and combat service support as well as a large number of
    individual augmentees to Marine and joint staffs. Reserve units
    continue to fill critical roles in our nation's defense during the
    Global War on Terrorism--whether deployed in Iraq, Afghanistan, the
    Georgian Republic, Djibouti, Kuwait, and Guantanamo Bay, Cuba or on
    standby at U.S. bases to quickly respond to Homeland Security crises.
        The Marine Corps has completed 27,389 Reserve activations, in
    response to both internal and joint operational requirements. Of the
    27,389 Marines mobilized since 9/11, 1,426 (or 5.2 percent) have been
    mobilized more than once. For Operations ENDURING FREEDOM V and IRAQI
    FREEDOM II Phase II, of the approximately 6,300 eligible for
    activation, 3,422 Reserve Marines have already been mobilized at least
    once since 9/11. Marine Forces Reserve has maximized the use of
    Individual Ready Reserve volunteers, 4,570 have been activated to meet
    these requirements, primarily in the areas of staff augmentation, such
    as linguists, intelligence specialists, and for force protection
    requirements.
        During the peak of Operation ENDURING FREEDOM and Operation IRAQI
    FREEDOM, the Marine Corps had 21,316 Reserve Marines on Active duty.
    Marine Forces Reserve proved once again that it was ready, willing and
    able to accomplish its primary mission of augmenting and reinforcing
    the active component by seamlessly integrating into the I Marine
    Expeditionary Force. As an example of the level of support Reserve
    Marines provided, 6th Engineer Support Battalion, the second largest
    battalion in the Marine Corps mobilized 1,972 of its 2,172 Marines from
    11 separate sites. The unit is comprised of 10 companies spread among
    12 Reserve centers across the United States. During the war, the
    battalion distributed 8 million gallons of fuel, produced and
    distributed over 3.1 million gallons of water and provided material
    handling support for numerous convoys. In addition, the unit built the
    longest Hose Reel Fuel line system (80 miles), the largest tactical
    fuel farm and the longest Improved Ribbon Bridge in Marine Corps'
    history.
        The Fourth Marine Division was equally engaged. Two infantry
    battalions, 2nd Battalion, 23rd Marines and 2nd Battalion, 25th Marines
    were directly engaged in ground combat, as was 4th Light Armored
    Reconnaissance Battalion, 4th Assault Amphibian Battalion, and other
    combat support and combat service support outfits. Reserve officers and
    staff noncommissioned officers effectively trained their units for
    combat and led them successfully in battle.
        Marine Reserve KC-130Ts proved their worth. Using the most modern
    night vision equipment, they participated in 3rd Marine Aircraft Wing's
    assault support effort, landing on highways and dirt strips to resupply
    Forward Arming and Refueling Points that supported the I Marine
    Expeditionary Force's 500-kilometer drive from Basra to Baghdad and on
    to Tikrit.
        The seamless integration of reserve units is a credit to the Marine
    Corps commitment to Total Force. A strong Inspector-Instructor system,
    providing a top notch staff of Active duty and Active Reserve personnel
    at each site, and a demanding Mobilization and Operational Readiness
    Deployment Test program ensure Marine Corps Reserve units achieve the
    highest level of pre-mobilization readiness. Marine Corps Reserve units
    train to a high readiness standard, eliminating the need for post-
    mobilization certification. For Operation IRAQI FREEDOM the Marine
    Corps Reserve executed a rapid and efficient mobilization. While some
    of our Reserve units deployed in as little as six days from
    notification, on the whole our units averaged 23 days from notification
    to deployment. None of our units missed their deployment window. In
    fact, many of our units were notified, activated, and ready to deploy
    faster than strategic lift was available.
        The ability of the Marine 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.

                            RECRUITING AND RETENTION

        The Marine Corps Reserve has achieved historically high retention
    rates in fiscal year 2003 and, the retention rate for the Marine Corps
    Reserve remains favorable with a 7 to 10 percent increase over
    retention rates in the near-term past. Marine Forces Reserve will not
    be complacent about these positive trends. I will carefully and
    continuously monitor the data on both recruiting and retention, and
    will make every effort to stay ahead of any problems. These are areas
    in which we cannot wait until we are in trouble to initiate corrective
    measures. Every Marine Corps leader knows the role of leadership,
    training and family readiness programs in the recruiting and retention
    of our Marines.
        With the accession of 6,174 non-prior service Marines and 2,663
    prior service Marines, the Marine Corps Reserve met and exceeded,
    respectively, current recruiting goals. Current Military Occupational
    Specialty match rates are exceeding the goal of 75 percent with an
    enlisted Military Occupational Specialty match rate of 87.4 percent and
    officer match rate of 75.8 percent.
        As of February 29, 2004, our end-strength was 40,235, which is 635
    above our authorized end-strength but within the allowable 2 percent
    variation. Officer recruiting and retention remains our most
    challenging concern. This is due to the low attrition rate for company
    grade officers from the active force. The Marine Corps recruits Reserve
    officers almost exclusively from the ranks of those who have first
    served an active duty tour as a Marine officer. We are exploring
    methods to increase the participation of company grade officers in the
    Selected Marine Corps Reserve through increased recruiting, increased
    command emphasis on Reserve opportunities and participation, and
    Reserve officer accession programs for qualified enlisted Marines.
    Further, the Marine Corps supports the legislative proposal to allow
    bonuses for officers in the Selected Marine Corps Reserve who fill a
    critical skill or shortage. We currently have a shortage of Reserve
    company grade officers; this bonus could complement other efforts we
    are making to increase their participation.

                           MARINES AND THEIR FAMILIES

        Our future success will rely firmly on the Marine Corps' most
    valuable asset--our Marines and their families.
    Operational Tempo Relief
        In addition to supporting Operations NOBLE EAGLE, ENDURING FREEDOM
    and IRAQI FREEDOM, Reserve Marines provided operational tempo relief to
    the active component. Notably, 96 Reserve Marines volunteered to
    participate in the West African Training Cruise-04, a biannual 6th
    Fleet sponsored exercise in West Africa (a first for the Marine Corps
    Reserve). During the months of October and November 2003, the Marines
    deployed to West Africa from various Reserve Training Centers
    throughout the United States via Air Force strategic lift. There they
    boarded the High Speed Vessel Swift and sailed Africa's West Coast
    conducting training exercises with military forces from South Africa,
    Cameroon, Ghana, Gambia, and Senegal.
        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 supported 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.
        Similarly, 335 Reserve Marines volunteered to deploy to South
    America to participate in UNITAS 45-04. Sponsored by Commander, Naval
    Forces Southern Command, UNITAS is an annual naval and amphibious
    exercise that takes place throughout South America. This will be the
    second UNITAS sourced primarily from the Selected Marine Corps Reserve.
    This year the Selected Marine Corps Reserve Marines of Marine Forces
    UNITAS will conduct a 13-week training program at Camp Lejeune, North
    Carolina and subsequently embark on the U.S.S. Tortuga. From the
    Tortuga the Marines will disembark to conduct bilateral training with
    our allies in the Caribbean and the Pacific. In Peru, Marine Forces
    UNITAS 45-04 conduct a multi-national amphibious exercise that includes
    forces from Argentina, Bolivia, Chile, Ecuador, Mexico, Panama, Peru
    and Uruguay.

    Mobilization Support
        Mobilization readiness is our number one priority and the men and
    women in the Marine Corps Reserve have responded enthusiastically to
    the call to duty. Approximately 98 percent of Marines reported when
    mobilized. One of the keys to this success is the support given to the
    Marines and their family members prior to, during and after activation.
        Programs such as Marine Corps Community Service One Source provide
    Marines and their families with around-the-clock information and
    referral service for subjects such as parenting, childcare, education,
    finances, legal issues, elder care, health, wellness, deployment,
    crisis support and relocation via toll-free telephone and Internet
    access. Marine Corps Community Service One Source familiarizes our
    activated Reserve Marines and their families not located near major
    military installations to the requirements and procedures associated
    with military programs such as TRICARE.

    TRICARE
        Marine Forces Reserve recognizes family readiness as an essential
    part of mobilization preparedness. Upon activation, Reserve families
    must make significant adjustments in lifestyle. Civilian jobs and/or
    educational commitments must be correctly managed: proper notifications
    provided to employers to ensure legal protections, continued good
    Marine-employer relations and an eventual smooth return. The TRICARE
    Prime-Remote provisions have made health care issues less challenging,
    with families no longer required to shift providers in order to use
    TRICARE benefits.
        Since 9/11, Congress has gone to great lengths to improve TRICARE
    benefits available to the Guard and Reserve. Reserve members are now
    eligible for dental care under the TRICARE Dental Program for a minimal
    monthly fee. Mobilized Reserves are granted additional transitional
    benefits once their activation is complete. In an effort to increase
    awareness of the new benefits, Reserve members are now receiving more
    information regarding the changes through an aggressive education and
    marketing plan. And finally, the newest, temporary changes include
    provisional benefits to Marines and their family members 90 days prior
    to their activation date and up to 180 after deactivation and extending
    TRICARE coverage to members and their families who are either
    unemployed or employed but not eligible for employer-provided health
    coverage. The new reserve health program, being temporary, offers us
    the ability to assess the impact of these benefits after the trial
    period. We will review the effects of these programs on reservists and
    their families as they transition to and from active duty and look at
    the overall effect on retention and readiness.

    Family Support
        At each of our Reserve Training Centers, the Key Volunteer Network
    Program serves as the link between the deployed command and the
    families, providing unit spouses with official communication,
    information and referrals. This creates a sense of community within the
    unit. Additionally, the Lifestyle Insights, Networking, Knowledge and
    Skills Program is a spouse-to-spouse orientation service offered to new
    Marine spouses to acquaint them with the military lifestyle and the
    Marine Corps, including the challenges brought about by deployments.
    Online and CD-ROM versions of the Lifestyle Insights, Networking,
    Knowledge and Skills Program make this valuable tool more readily
    accessible to working spouses of Reserve Marines not located near
    Marine Corps installations. The Peacetime/Wartime Support Team and the
    support structure within the Inspector and Instructor staff provide
    families of deployed Marines with assistance in developing proactive,
    prevention-oriented steps such as family care plans, powers of
    attorney, family financial planning, and enrollment in the Dependent
    Eligibility and Enrollment Reporting System. Our deployed commanding
    officers have confirmed the importance of this family readiness support
    while they were away and as part of their homecoming.
        The Department of Defense has proposed an impressive package of
    legislative initiatives that will help us to effectively employ the
    Marine Corps Reserve. Of particular note are provisions which support a
    ``continuum of service,'' a concept that makes it easier for an
    individual service-member to move on and off of active duty depending
    on his or her availability and willingness to serve.

                          PREPARATION FOR OIF II/OEF V

        I am most pleased to report that every Reserve Marine deployed
    during Operation IRAQI FREEDOM and Operation ENDURING FREEDOM and those
    currently deployed into harm's way are fully equipped with the most
    modern Individual Combat Equipment available. Reserve Marines deployed
    in Iraq and Afghanistan are wearing the latest in individual ballistic
    body armor protection, the Improved First Aid Kit, and the new digital
    pattern Marine Corps Combat Utility Uniform. Additional individual
    equipment programs nearing production and distribution to our units
    include the new Lightweight Helmet, the Improved Load Bearing Equipment
    pack system, and the All Purpose Environmental Clothing System third-
    generation Gore-Tex.
        Operationally, since I last testified, over 40,000 pieces of
    Reserve combat unit equipment including individual and crew-served
    weapons, night vision devices, radios, computers, vehicles, and
    engineer equipment have been deployed, engaged in theater, redeployed
    back through our Marine Corps installations, processed through the
    maintenance cycle, and returned to Reserve Training Centers. This
    equipment is poised to resource and future contingencies.

               NATIONAL GUARD AND RESERVE EQUIPMENT APPROPRIATION

        The $44.6 million provided by fiscal year 2004 National Guard and
    Reserve Equipment Appropriation will provide the Reserve Force with the
    systems needed to improve mission capability and readiness now and into
    the future. Important communications systems such as the Secure Mobile
    Anti-Jam Reliable Tactical Terminal, the Enhanced Position Location
    Reporting System and Iridium Satellite phones will greatly enhance our
    ability to communicate on the battlefield and, most importantly, to
    integrate with the active component. National Guard and Reserve
    Equipment Appropriation funding has allowed the Marine Corps Reserve to
    procure mission-critical night vision devices such as the AN/PVS-17B/C
    Mini Night Vision Sight (used with individual weapon systems) and the
    AN/PAS-13 Thermal Weapon Sight (used with crew-served weapons). These
    sights increase our capability to fight at night and during reduced-
    visibility conditions. This year's National Guard and Reserve Equipment
    Appropriation also funded the Electronic Warfare Suite (AFC-230) for 47
    percent of our AH-1W Super Cobra attack helicopters. We require 20
    additional Electronic Warfare Suites to protect the remainder of our
    AH-1W fleet. However, I want to assure you that every aircraft, both
    rotary- and fixed-wing, deploying to Iraq and Afghanistan will have the
    latest in Aircraft Survivability Equipment installed either prior to
    departure, enroute while embarked aboard amphibious shipping, or
    shortly after arrival in-theater. A contractor ``tiger team'' is
    scheduled to arrive in Afghanistan tomorrow, April 8, from Iraq to
    upgrade our UH-1N utility and AH-1W attack helicopters.

                      GROUND ELEMENT EQUIPMENT PRIORITIES

        The increasing age of our equipment is also a challenge within the
    Reserve ground component. I am pleased to report that we are meeting
    these challenges in several areas. Of our 3,448 aging High Mobility
    Multipurpose Wheeled Vehicle, Basic and A1 variants, Marine Forces
    Reserve has so far replaced 1,162 with the High Mobility Multipurpose
    Wheeled Vehicle A2 variant. Of our 1,233 Five-Ton truck fleet, 604 have
    been replaced with the Medium Tactical Vehicle Replacement truck. Both
    new vehicle systems embrace the latest sustainability and
    maintainability technological improvements available to the Marine
    Corps.
        We continue to receive over 300 new High Mobility Multipurpose
    Wheeled Vehicle A2s each year and project complete replacement of our
    fleet by fiscal year 2009. We are scheduled to receive an additional
    301 Medium Tactical Vehicle Replacement trucks between now and November
    2004 with the remaining balance scheduled to be delivered by the end of
    fiscal year 2005.
        Efforts to improve our communications capabilities have focused on
    increased fielding of several tactical single-channel radio programs
    including the PRC-117 satellite radios, PRC-150 high frequency radios
    and PRC-148 squad radios. Previous National Guard and Reserve Equipment
    Appropriation funding allowed Marine Forces Reserve to buy state-of-
    the-art battery chargers, power adapters for single-channel radios, and
    power inverters, providing a range of alternative power options
    comparable to active component units.
        As I mentioned earlier, mobilization readiness is my number one
    priority. In order to continue seamless integration into the active
    component, my ground component priorities are the sustained improvement
    of individual Marine protective equipment and overall equipment
    readiness. With your continued support, Marine Forces Reserve will
    deploy Marines with the best available individual and unit equipment
    needed to accomplish their mission and return home safely.

                     AVIATION ELEMENT EQUIPMENT PRIORITIES

        Maintaining current readiness levels will require continued support
    as our equipment continues to age at a pace exceeding replacement.
    Within Reserve aviation, the average age of our youngest platform is
    the UC-35 at 6 years, followed by the AH-1W Cobra at 11 years, the CH-
    53E at 16 years, the KC-130T at 18 years, the F/A-18A at 20 years, and
    the F-5 at 31 years. Our oldest platforms--platforms that have exceeded
    programmed service life--include the UH-1N at 31 years (20-year service
    life) and the CH-46E at 37 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 obsolescent parts and higher
    rates of equipment failure. For example, for every hour the CH-46E is
    airborne, an average of 25.2 maintenance man-hours are required.
    Continued support for airframe and avionics upgrades--pending the
    arrival of the next generation of aircraft--reduces maintenance man-
    hours and increases the availability and capabilities of our aircraft.
        We are thankful for and remain confident in the readiness of the
    Marine Corps Reserve, and we seek your continued support in the fiscal
    year 2005 President's Budget. Your continued support is critical in our
    ability to maintain readiness and mission capability to support
    operations in support of the Global War on Terrorism.

                                 INFRASTRUCTURE

        Marine Forces Reserve is and will continue to be a community-based
    force. This is a fundamental strength of Marine Forces Reserve. Our
    long-range strategy is to maintain that fundamental strength by
    maintaining our connection with communities in the most cost effective
    way. We do not want to be located exclusively in just several large
    metropolitan areas or consolidated into a few isolated enclaves.
        We seek every opportunity to divest Marine Corps-owned
    infrastructure and to locate our units in Joint Reserve Centers. Marine
    Forces Reserve units are located at 187 sites in 48 states, the
    District of Columbia, and Puerto Rico; 33 sites are owned or leased by
    the Marine Corps Reserve, 154 are either tenant or joint sites. Fifty-
    three percent of the Reserve centers we occupy are more than 30 years
    old, and of these, 37 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 and
    budget accordingly. Similar to the active component, we do not expect
    to be able to bring our facilities to acceptable levels of readiness
    before fiscal year 2013. In fiscal year 2003 we funded seven Whole
    Center Repairs in a step forward to meeting the fiscal year 2013 goal.
    This will reduce the facilities currently rated below acceptable levels
    to 58 percent. While the fiscal year 2005 Presidential Budget provides
    a nearly 39 percent increase in our sustainment budget, we still face a
    backlog in restoration and modernization across the Future Years
    Defense Program of over $30 million. The majority of this backlog
    requires Military Construction funding due to the deterioration of our
    facilities, but it also includes Operations and Maintenance-funded
    whole center repair projects and site improvements at Reserve Training
    Centers in Texas, New York, Florida, and Washington. Maintaining
    facilities adequately is critical to providing quality-training centers
    that support the readiness of our Marines. Replacing inadequate
    facilities is also part of our overall infrastructure program. The
    yearly Presidential Budget average for new military construction of
    $8.67 million for the previous six fiscal years has allowed us to
    address our most pressing requirements.
        Past vulnerability assessments identified $33.6 million in projects
    to resolve anti-terrorism/force protection deficiencies at the 41 sites
    that we own or at which we have responsibility for site maintenance. We
    have expended $8.3 million the last two years to reduce these
    vulnerabilities. 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
    anti-terrorism/force protection resolution through structural
    improvements, relocation, replacement or the acquisition of additional
    stand-off distance. All these expensive solutions will be prioritized
    and achieved over the long-term to provide the necessary level of force
    protection for all our sites. We continue to improve the anti-
    terrorism/force protection posture at our Reserve Training Centers and
    are acting proactively to resolve the issues and deficiencies.

                        MODERNIZATION AND TRANSFORMATION

    Command, Control, Communications, and Computers
        With your help, we have made great strides in Command, Control,
    Communications, and Computers equipment readiness during the past year.
    Marine Forces Reserve's Command, Control, Communications, and Computers
    readiness increased noticeably, due to the fiscal year 2003 National
    Guard and Reserve Equipment Appropriation. As I speak to you today, a
    detachment of our 4th Air Naval Gunfire Liaison Company is in Iraq,
    outfitted with high frequency and satellite radio equipment almost
    completely procured with the fiscal year 2003 National Guard and
    Reserve Equipment Appropriation funds. This marks the first time in the
    past year and a half a Reserve Air Naval Gunfire Liaison Company unit
    performed its mission without provisioning radio equipment from its
    gaining force commander.
        There are a few areas that I would like to bring to your attention
    in which you may again assist us. Because of the increased reliance on
    Marine Forces Reserve's military police and civil affairs capabilities,
    we have validated an additional requirements for 200 handheld radios.
    Critical new requirements have emerged for our civil affairs groups'
    coordination and command-and-control capabilities such as the
    additional validated need for 100 AN/PRC-148 handheld radios and 50
    single channel/satellite AN/PRC-117 radios to meet the unexpected
    growth in civil affairs capabilities.

    Digital Data Servers
        Progress has been made in fielding new equipment to bridge the gap
    between active component units and their Reserve counterparts. However,
    there are areas of improvement in which you can help speed the closure
    of the gap.
        Prior to completion of Marine Forces Reserve fielding, 24 Digital
    Data Server suites were reallocated to support training requirements
    for Operation IRAQI FREEDOM.

    Enhanced Data Relay
        Today, battalion-level units in the Total Force are unable to
    receive robust data communications beyond line-of-sight. Regimental-
    level units rely on satellite and multi-channel radios to maintain
    reliable secure data communications to senior and parallel headquarters
    across the battlefield. The data link down to battalion-level units is
    the Enhanced Position and Location Reporting System, but it has a range
    limited by line-of-sight. The range limitation does not allow the
    secure data communications to be extended from the Regimental level to
    distant or fast moving battalion-level and below units. The Marine
    Corps Command-and-control on-the-move Network Digital Over-the-Horizon
    Relay initiative is an attempt to extend data networks beyond line-of-
    site. This initiative uses satellite and ground radio relays mounted on
    High Mobility Multipurpose Wheeled Vehicles in three variants. It also
    allows units to use standard radios to connect to tactical data
    networks. Though in the early stages of development, the Marine Corps
    Reserve's tactical Command, Control, Communications, and Computers
    effectiveness as well as that of the active component could be
    significantly enhanced with funding and fielding of the Command-and-
    control on-the-move Network Digital Over-the-Horizon Relay initiative.

    Navy-Marine Corps Intranet
        With the delay of Marine Forces Reserve's transition to the Navy-
    Marine Corps Intranet, many Marine Reserve units have not received up-
    to-date hardware to replace their aging computers. At least 12 percent
    of our computers are incapable of running the Marine Corps-approved
    operating systems, creating compatibility and reliability issues.
    Marine Forces Reserve is advance-fielding Navy-Marine Corps Intranet
    deployable computers to units deploying for operations to mitigate this
    problem. While this is a quick fix, it does not solve the primary issue
    of aging computers in the Force. Presently, Marine Forces Reserve is
    only funded for approximately 8,000 Navy-Marine Corps Intranet
    computers. Unfortunately this leaves 6,000 required Navy-Marine Corps
    Intranet computers, in the form of user seats. Without the funding to
    replace our aging computers, Marine Forces Reserve will have to contend
    with critical long-term computer compatibility and reliability issues.

    AN/PRC-150
        The fiscal year 2004 National Guard and Reserve Equipment
    Appropriation significantly mitigated our high frequency radio
    readiness issues with the purchase of man-packed AN/PRC-150 radios to
    replace the obsolescent AN/PRC-104s. However, the acquisition objective
    for AN/PRC-150 radios will grow as more of the 20-year-old AN/PRC-104s
    become unserviceable. We appreciate your continued support for the
    funding of the AN/PRC-150s which will keep potential high frequency
    radio readiness issues at bay.
        As the transformation of our Force continues, there will be a
    greater need for newer tactical Command, Control, Communications, and
    Computers equipment to fill voids in satellite communications and data
    communications areas. Requirements for the Lightweight Multi-band
    Satellite Terminal will increase to provide the same wideband satellite
    communications capability resident in the active component's major
    communications units. Tactical data network requirements will continue
    to grow and so will the need for a continued refreshing of computer
    technology in the Force. During the next year, requirements for
    additional Lightweight Multi-band Satellite Terminals and tactical data
    network equipment will be identified for funding.
        In the past few minutes, I pointed out several challenges in
    Command, Control, Communications, and Computers readiness for Marine
    Forces Reserve. However, I want to emphasize that while challenges
    remain, your support in providing a path for us to replace and sustain
    our Command, Control, Communications, and Computers equipment has
    placed your Marine Reserve in a much better Command, Control,
    Communications, and Computers posture than a year ago.

                                   CONCLUSION

        The Marine Corps Reserve is ready, willing and able to answer our
    Nation's call to duty in the Global War on Terrorism, as has been so
    well demonstrated by the mobilization and integration of Reserves into
    the active component. Our greatest asset is our outstanding young men
    and women in uniform. 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.

    STATEMENT OF LIEUTENANT GENERAL JAMES E. SHERRARD, III,
                CHIEF, AIR FORCE RESERVE
        Senator Stevens. General Sherrard, I believe this is your
    last visit with us. We thank you for your dedication to the Air
    Force Reserve and for being with us in the past years. We wish
    you well. We would be pleased to have your statement.
        General Sherrard. Thank you, Senator. Thank you very much.
    On behalf of the almost 79,000 military and civilian members of
    the Air Force Reserve, it is indeed my honor and privilege to
    be here to speak on their behalf before this distinguished
    committee.
        I would tell you, sir, that we have had more than 28,000
    Air Force Reservists mobilized since September 11th and
    currently have over 5,600 serving today. They have served with
    distinction and we are awfully proud of that. We believe that
    their capabilities which they provide to our Air Force are
    essential and they are truly a result of our priorities that we
    have established over the years and continue to carry our top
    three priorities, the first being people, the second being
    readiness, and the third being modernization.

                            RECRUITING AND RETENTION

        Under the people priority, recruiting and retention are
    essential for us. On the recruiting side, as I have testified
    before this committee previously, we continue to be challenged
    by the smaller number of members that are separating from the
    active force. So, therefore, we must place our focus more on
    the non-prior service members. We are finding that we can
    recruit those members. It certainly takes a longer time for our
    recruiting force, but the major challenge is the longer period
    it takes for them to gain the experience level that is
    necessary for them to do the things that we ask of them. Our
    history has always shown us that the high technological needs
    of our service demands an experienced force, and we certainly
    need to do that.

                                   RETENTION

        On the retention side, again as I have testified
    previously, I continue to stress the need for us to be able to
    retain our members, particularly those who have reached the
    point of 20 satisfactory years of service and realizing that
    the experience level is exactly the one we want to make sure
    that we do not let leave our fold, and if we can retain the
    members to their maximum military service separation date or
    high year tenure date for our enlisted members, then we have a
    much better and more capable force.

                      FAIR REPRESENTATION AND COMPENSATION

        The third piece of the people side of the house is equal
    and equitable or fair representation and compensation and
    making certain that when our members are activated, they in
    fact are receiving the benefits that do not put them at a
    disadvantage to those that they are serving with.

                                   READINESS

        On the readiness side, we take great pride in the Air Force
    that there is one tier of readiness. The active Air Force
    creates the standard. We in the Air Force Reserve Command train
    to that standard and the active force evaluates it, and that
    has been the key to our success that when our members show up
    in theater, they are ready to go as a full combat-ready force
    ready to meet the challenges that come their way.

                                 MODERNIZATION

        And under modernization, I must tell you and echo what my
    colleagues have said. We thank you so much for the NGREA
    dollars that have been provided to us. They have allowed us to
    modernize and maintain our fleet in a form that makes them
    relevant and most assuredly capable. We need to continue to
    pursue that, making certain that we give our members the very
    best equipment possible to do the job, making certain that it
    is relevant and interoperable with not only the active force
    but with our coalition partners.
        We need to continue to watch very carefully the
    modernization side and work very diligently, as was mentioned
    by the first panel, to look at integrating our units better
    operationally. We in the Air Force Reserve Command have been
    using the associate concept since 1968. It has served us well
    and there are certainly different ways of utilizing that
    particular endeavor and we are seeking and doing those today,
    whether it be in the Airborne Warning Air Control System (E-3A)
    (AWACS) mission in the Specialized Undergraduate Pilot Training
    (SUPT) program and we continue looking in the fighter associate
    and other arenas.
        I look forward to your questions, sir.
        Senator Stevens. Thank you very much.
        [The statement follows:]

        Prepared Statement of Lieutenant General James E. Sherrard, III

        Mr. Chairman, and distinguished members of the Committee, I would
    like to offer my sincere thanks for this opportunity, my last, to
    testify before you. As of September 30, 2003, United States Air Force
    Reserve (USAFR) has a total of 8,135 people mobilized under Partial
    Mobilization Authority. These individuals are continuing to perform
    missions involving: Security, Intelligence, Flight Operations for
    Combat Air Patrols (CAPs), Communications, Air Refueling Operations,
    Strategic and Tactical Airlift Operations, Aero Medical, Maintenance,
    Civil Engineering and Logistics. The Partial Mobilization for the
    Global War on Terrorism (GWOT) is the longest sustained, large-scale
    mobilization in the history of the Air Force. AFR mobilizations peaked
    at 15,332 on April 16, 2003 during OIF with a cumulative 28,239
    mobilizations sourced in every contingency supporting GWOT since
    September 11, 2001. Early GWOT operations driven by rapid onset events
    and continued duration posed new mobilization and re-mobilization
    challenges, which impacted OIF even though only a portion of the
    Reserve capability was tapped.
        In direct support of Operation ENDURING FREEDOM (OEF), Operation
    IRAQI FREEDOM (OIF), and the Global War on Terrorism (GWOT), Air Force
    Reservists have flown a multitude of combat missions into Afghanistan
    and Iraq. The 93rd Bomb Squadron is an example of one of the many units
    to successfully integrate with active duty forces during combat
    missions in OEF and OIF. Reserve crews, which comprise eight percent of
    the conventional crews, flew on 42 percent of all B-52 combat missions
    during four combat deployments in support of these operations. The 93rd
    Bomb Squadron performed many operations that were a first for B-52
    operations as well as demonstrating maximum flexibility as a war-
    fighting unit. One of their B-52's was the first to employ Precision
    Strike Laser Guided Bomb self-designate capability using the LITENING
    II targeting pod. Reserve aircrews have also flown C-17 airland/airdrop
    missions into Afghanistan and Iraq delivering humanitarian aid and
    supplies for the warfighting effort. They also provided air refueling
    tanker crews and support personnel from the 434th Air Refueling Wing at
    Grissom ARB, Indiana (KC-135) and 349th Air Mobility Wing at Travis
    AFB, California (KC-10). Additionally, Air Force Reserve F-16 units
    have been involved in support of Operation NOBLE EAGLE (ONE) by flying
    combat air patrols over key American cities (301st Fighter Wing, JRB
    NAS Fort Worth, Texas, 482d Fighter Wing, Homestead ARB, Florida, and
    419th Fighter Wing, Hill AFB, Utah). These units were also deployed at
    various times in support of OEF and OIF operations.

                                   RECRUITING

        The Air Force Reserve continued to address new challenges in 2003.
    Partial mobilization persists, though it's reducing day-by-day, but
    volunteerism continues to be a significant means of contribution.
    Dedicated members of the Air Force Reserve continue to meet validated
    operational requirements. Recruiting and retention of quality service
    members is taking top priority for the Air Force Reserve Command (AFRC)
    and competition for these members among other services, as well as
    within the civilian community has reached an all-time high.
        AFRC end strength for fiscal year 2003 was 98.8 percent of
    authorized end strength.
        Recruiting continues to pose other significant challenges as well.
    The pool of active duty separatees continue to shrink from its peak
    prior to force reduction over a decade ago, and a perceived likelihood
    of activation and deployment are being cited as significant reasons why
    separating members are declining to choose continuing military service
    in the Reserve. These issues further contribute to the civilian
    sector's ability to attract these members away from military service.
        The Air Force Reserve is developing a strategy to take advantage of
    an active duty Force Shaping initiative. Within this fiscal year, Air
    Force will offer active duty members the opportunity to use the Palace
    Chase program to change components. While the details are not fully
    approved, the Air Force Reserve may have an unprecedented opportunity
    to access prior service members in critical career skills.
        We are hopeful that we will be able to preserve the training and
    experience of some 16,000 personnel who may take advantage of the
    opportunity to serve under Palace Chase, but we must ensure the right
    force mix and the right faces to match our vacancies--it's not just a
    ``numbers drill''.
        One consequence of the reduced success in attracting separating
    members from Active Duty is the need to make up this difference through
    attracting non-prior service members. While having enough Basic
    Military Training and Technical Training School quotas has long been an
    issue, the increased dependence on non-prior service accessions strains
    these requirements even further.

                                   RETENTION

        Though retention was enhanced through ``Stop-Loss'' in the previous
    two years, the eventual effects of this program may be felt in this
    fiscal year. Even though ``Stop-Loss'' was terminated in June 2003, the
    six-month manning policy provides an additional period of relief.
    Coupled with the policy to establish a separation date six months from
    the end of re-deployment, if there will be a subsequent impact on
    retention, it will be felt in this fiscal year.
        We continue to look for viable avenues to enhance retention of our
    reservists. The reserve enlisted bonus program is a major contributor
    to attract and retain both unit and individual mobilization augmentee
    members in those critical (Unit Type Code tasked) career fields. We
    successfully increased the prior service enlistment bonus amount to
    $8,000 this past year for a maximum six-year enlistment in accordance
    with related legislative authority granted in 2003. We continue to
    explore the feasibility of expanding the bonus program across AFRC as
    determined necessary; however, no decision has yet been made to
    implement. The Aviation Continuation Pay (ACP) continues to be offered
    as an incentive for active duty (AGRs).
        One of the most positive quality of life enhancements occurred when
    the Department of Defense reduced the required threshold for dependent
    eligibility for TRICARE Prime from 179 days of consecutive active duty
    to 31 days of duty. This threshold reduction allows for greater
    dependent health care for the vast majority of Reserve members serving
    on periods of active duty, and will greatly increase volunteerism
    across the force for a wide variety of requirements. Additionally, the
    2004 NDAA provides for three temporary improvements to the overall
    TRICARE system for Air Force Reserve members: access to heath care for
    inactive members and their dependents, provided they are eligible for
    unemployment compensation or not otherwise eligible for employer-
    provided health care; earlier TRICARE eligibility for Air Force Reserve
    members with delayed effective-date activation orders; and finally, the
    period of time granted for transition health care coverage was expanded
    from 60 and 120 days up to 180 days for certain members separating from
    active duty. These vast improvements in the TRICARE program, though
    temporary, will continue to pay dividends in the quality of life
    characterization for our Air Force Reserve members, and ultimately
    serve as a critical readiness tool.
    Space Operations
        Air Force Reserve Command (AFRC) provides over 1,100 trained space
    officer, enlisted, civilian, and contractor personnel at more than 15
    locations to acquire, plan, launch, task, operate, assess, and protect
    more than 28 weapon systems at 155 units worldwide for Air Force Space
    Command, United States Strategic Command, Headquarters Air Force,
    National Reconnaissance Office, and others. An annual budget of over
    $22 million funds AFRC space operations and requirements providing
    command, control, computers, communication, intelligence, surveillance,
    reconnaissance (C\4\ISR), navigation, weather, missile warning, network
    security and force protection support to warfighters around the globe.
      --Nine associate units at four locations operate Global Positioning
            System (GPS), Space-Based Infrared System (SBIRS), Defense
            Support Program (DSP), and Defense Meteorological Satellite
            Program (DMSP) satellites; fully integrate with the Network
            Operations and Security Center (NOSC) and Space AOC; conduct
            test and space aggressor activities; and provide security
            forces for land-based facilities.
      --Nearly 700 individual mobilization augmentees (IMAs) at more than
            15 locations provide support in all areas of the ``cradle-to-
            grave'' life cycle of national space assets.
      --AFRC space personnel have been fully involved in planning and
            executing military activities supporting Operations NOBLE
            EAGLE, ENDURING FREEDOM, IRAQI FREEDOM, and NORTHERN and
            SOUTHERN WATCH.
      --Reserve Associate Programs have been highly successful and are
            projected for additional growth in the future. Associate unit
            concepts being studied include space control, launch
            operations, ICBM communications, and Space Operations School.

    Associate Program
        The Air Force Reserve Command (AFRC) Associate Program meshes
    reserve units with active-duty units at bases throughout the United
    States. AFRC units use host aircraft and equipment for their training
    and work directly with their active duty counterparts. Associate
    mobility units fly C-141 Starlifter, C-5 Galaxy, and C-17 Globemaster
    III transports along with KC-10 Extender and KC-135 Stratotanker tanker
    aircraft. In the spring of 1996, AFRC began filling aircrew and
    maintenance support personnel positions in the 513th Air Control Group,
    an E-3 Sentry Airborne Air Control System unit.
        AFRC is continuing to expand the scope of the associate program
    into new mission areas. New units supporting Air Education and Training
    Command's undergraduate pilot training program are being managed by the
    340th Flying Training Group located at Randolph Air Force Base, Texas,
    and the 301st Fighter Squadron, F-16 associate instructor pilot program
    at Luke Air Force Base, AZ. AFRC has an associate fighter unit at Shaw
    Air Force Base, SC, associate pilots flying F-16s with the
    ``Aggressor'' squadron at Nellis AFB, NV, and an associate flight test
    unit integrated with the Federal Aviation Administration.
        The flexibility of the Associate program allows for the effective
    and efficient use of highly trained AFRC aircrew members. Associate
    units also provide aircraft maintenance personnel to maintain the
    active duty aircraft ensuring the utilization of our air frames to the
    maximum extent.
        The 919th Special Operations Wing, Duke Field, FL, trains in one of
    the U.S. military's most unique missions--special operations. Wing
    aircraft include MC130E Combat Talon I aircraft equipped for use in
    night/adverse weather, low-level, deep-penetration tactical missions.
    These aircraft have also been modified to conduct air-to-air refueling
    with special operations helicopters. In February 2000, the 8th Special
    Operations Squadron (active duty) joined the 711th SOS at Duke Field as
    a reverse associate unit--meaning active duty personnel fly reserve-
    owned aircraft. The 919th SOW manages all Talon I aircraft in the Air
    Force inventory. This is a first for Air Force Special Operations
    Command and the second time in Air Force history since the EC-121
    mission.
        The wing also flies the MC-130P Combat Shadow aircraft (5th SOS),
    which has been modified with new secure communications, self-contained
    inertial navigation, countermeasures systems and night vision goggle-
    compatible lighting. The aircraft's primary mission is to conduct
    single-ship or formation in-flight refueling of special operations
    helicopters in a low to selected medium-threat environment. On October
    1, 1999, the 5th SOS moved to Eglin AFB to join the 9th SOS (active
    duty) as an associate Reserve unit. This marked another first in the
    special operations mission area. Finally, as mentioned above, the
    Associate program in the space operations arena is rapidly expanding.
        Associate units provide several benefits and enhancements to
    include the following: Force multiplier which increases surge
    capability for war time or contingencies; continuity as AFRC forces
    provide stability and a service option for departing active duty
    personnel; experience as Reservists tend to have more years of service
    and bring invaluable civilian experience and knowledge to the military;
    and efficiencies due to Reserve cost savings and sharing of weapon
    systems and equipment.

                                 MODERNIZATION

        Effective modernization of Air Force Reserve assets is a key issue
    to remaining a relevant and combat ready force. It has been and
    continues to be apparent that the Reserve Component is crucial to the
    defense of our great nation. The events of September 11th cemented the
    Total Force initiatives already in place and Air Force Reserve Command
    (AFRC) is working shoulder-to-shoulder with the Active Duty and Air
    National Guard components in the long battle to defeat terrorism. Even
    before 9/11, USAFR was an active participant in day-to-day AF
    operations. USAFR is no longer a force held in reserve solely for
    possible war or contingency actions--we are an Operational Reserve, at
    the tip of the spear. It is therefore imperative that we remain a
    relevant and combat ready force for the future.
        Our modernization strategy is sound but is dependent upon lead
    command funding. Lead command funding of AFRC modernization priorities
    continues to be one of our challenges. We continue to work with the
    Department of Defense and the Department of the Air Force to address
    our requirements. We greatly appreciate your support for the increase
    to the National Guard and Reserve Equipment Authorization (NGREA)
    funding in the fiscal year 2004 NDAA, as we strive to utilize the best
    technological advances available to us, to keep our people safe in
    current theaters of operations. Success in meeting our modernization
    goals depends on our cohesive and focused approach to accepting new
    mission areas, while ensuring the continued success of current mission
    areas and robust interaction with the lead commands, as well as,
    keeping Congress informed of USAFR initiatives.

                              FLEET MODERNIZATION

    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 Global Positioning System (GPS)
    navigation system, Night Vision Imaging System (NVIS) and NVIS
    compatible aircraft lighting, Situational Awareness Data Link (SADL),
    Targeting Pod integration, GPS steered ``smart weapons'', an integrated
    Electronics Suite, Pylon Integrated Dispense System (PIDS), Digital
    Terrain System (DTS), and the ALE-50 (towed decoy system). 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 Advanced
    Technology (AT), an upgrade to 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. 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. AFRC will complete the purchase of AT upgrade kits
    and finish pod purchases for the F-16 this fiscal year. 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 useable 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 are needed
    to 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 Desert Storm,
    OEF and OIF. 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. An interim solution using Avionics
    Interface Modules to integrate LITENING II targeting pods was developed
    by the Air Reserve Component to bring added combat capability quickly
    to the battlefield. This capability must be integrated permanently to
    bring full precision strike abilities to the fight. The Precision
    Engagement and Suite 3 programs will further expand this combat
    capability and help correct limitations of aged systems. Two other
    programs, Embedded GPS and Integrated Flight and Fire Control Computer
    (IFFCC) will increase the navigation accuracy and the overall
    capability of the fire control computer, both increasing the weapon
    system's overall effectiveness.
        One of the A-10 challenges is resources for upgrade in the area of
    high threat survivability. The Avionics to EW Buss modification will
    enhance survivability by providing some automated flare dispensing.
    Previous efforts have focused on an accurate missile warning system and
    effective, modern flares; however a new preemptive covert flare system
    may increase survivability. 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. In an effort to increase loiter
    time, we are installing fire suppressant foam in our Sergeant Fletcher
    external fuel tanks, allowing removal of current flight restrictions
    regarding use of the external tanks in combat scenarios. 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. However, 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. AFRC A/OA-10s need upgraded structures and
    engines.

    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; 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 OOTW operation requires additional
    avionics modernization and changes to the weapons capabilities such as
    the Avionics Midlife Improvement (AMI), Conventional Enhancement
    Modification (CEM), and the Integrated Conventional Stores Management
    System (ICSMS). Effective precision strike capability was proven during
    OEF/OIF using LITENING II Targeting Pods. Permanent targeting pod
    integration is needed to retain this capability in the future. Changes
    in the threat environment are also driving modifications to the
    defensive suite including Electronic Counter Measures Improvement
    (ECMI). Modifications to enhance stand off jamming capability are also
    underway to bring the B-52 into the AEA arena. The B-52 in the AEA
    configuration will provide the United States Air Force with the
    capability to deny, deceive, and destroy the enemy.
        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. Advanced weapons integration
    programs are needed for Joint Air to Surface Standoff Missile (JASSM),
    Joint Standoff Weapon (JSOF), and Miniature Air Launched Decoy (MALD)
    capability to be fully realized. These integrated advanced
    communications systems will enhance the B-52 capability to launch and
    modify target locations while airborne. Other communications
    improvements are Link 16 capability for intra-theater data link, 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 on 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. 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 has accelerated the
    installation of the APN-241 radar as a replacement for the APN-59. All
    AFRC assets will be upgraded to provide Night Vision Imaging System
    (NVIS) mission capability for C-130 combat rescue aircraft. Necessary
    upgrades include defensive capability for the increasing infrared
    missile threat such as the Large Aircraft Infrared Countermeasures
    (LAIRCM) system.

    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 Para
    rescue 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. 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; and
      --Enhance availability, reliability, maintainability, and
            sustainability of aircraft weapon systems.
        Work continues on the Personnel Recovery Vehicle (PRV), a
    replacement for the ageing HH-60G helicopter sometime in the 2011
    timeframe.

    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 war
    fighting commanders and lays the foundation for tomorrow's readiness.
    Ongoing and future modernization efforts by AFRC include APN 241 Radar
    and Large Aircraft Infrared Countermeasures (LAIRCM) for our C-130H2/H3
    aircraft. Fiscal year 2004 funds provided for APN 241 radar. LAIRCM is
    required to protect the aircraft from current and future IR threats.
    The AN/AAQ-24 LAIRCM system uses a laser beam to defeat the missile and
    does not rely on hazardous and politically sensitive expendables that
    highlight the aircraft to additional threat.

    WC/C-130J Hercules
        The current 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 six WC-130J models at Keesler AFB, MS undergoing
    Qualification Test and Evaluation (QT&E). The remaining four aircraft
    currently loaned to Lockheed Marietta, will be delivered to Keesler AFB
    in January 2005. Deliveries are based on the resolution of deficiencies
    identified during tests. This will impact the start of operational
    testing and the achievement of interim operational capability (IOC).
    Major deficiencies include: propellers (durability/supportability) and
    radar tilt and start up attenuation errors. AFRC continues to work with
    the manufacturer to resolve the QT&E documented deficiencies. The 815th
    ALS has 5 C-130Js at Keesler AFB. Conversion to eight PAA C-130J
    stretch aircraft is to be completed by fiscal year 2007.

    C-5 Galaxy
        Over the next five years, there will be important decisions made
    that will change the complexion of the AFRC C-5 Fleet. Currently, there
    are primarily sustainability modifications to the weapons systems to
    allow it to continue as the backbone of the airlift community. Two
    major modifications will be performed on the engines to increase
    reliability and maintainability. Additionally, the C-5B fleet will
    receive the avionics modernization that replaces cockpit displays while
    upgrading critical navigational and communications equipment. AFRC C-
    5As are not currently programmed to receive these modifications. The C-
    5A fleet has no Defensive Avionics Systems, and this lack of capability
    has significantly hampered the ability of the C-5A to participate
    actively in the GWOT. If these aircraft are not upgraded, then they
    must be retired starting in fiscal year 2008.

    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, Air Force Reserve Command 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 transition to new mission
    aircraft is completed.

    KC-135E/R Stratotanker
        One of Air Force Reserve Command's most challenging modernization
    issues concerns our unit-equipped KC-135s. Seven of the nine 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. The remaining KC-135Es are being retired, and are
    being replaced by KC-135Rs. The last AFRC FC-135E will be retired in 4Q
    fiscal year 2005.
        The ability of the 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.

                                   CONCLUSION

        I would like to thank this committee and the Senate for your
    continuing support. I am proud to tell you that our Air Force Reserve
    Command continues to be a force of choice whenever an immediate and
    effective response is required to meet the challenges of today's world.
    For more than 30 years the Air Force has relied upon the Reserve
    components to meet worldwide commitments. The events of September 11,
    2001 and the Global War on Terrorism continue to highlight that
    reliance and have changed the way we think about and employ our forces.
    About one in three Air Force reservists has been mobilized at some
    point since that time. Transformation has proven to be an important
    aspect of the Air Force Reserve as we become more and more relevant in
    today's world.
        We are ready in peace or war, available for quick response, and
    able to stay the course when called upon. Although we are involved more
    now in the daily mission of the Air Force, the focus of the Air Force
    Reserve Command continues to be readiness--we train during periods of
    peace so that we are ready to perform our wartime missions wherever we
    are needed, whenever we are called.
        Like our active duty partners, the men and women of the Air Force
    Reserve are very busy. Trying to balance the demands of military
    service, family, and a civilian profession can be a demanding task, but
    ours is made easier by the support we receive from the American
    taxpayers, Congress, the Department of Defense and the Air Force.
        The Air Force Reserve Command made major Air and Space
    Expeditionary Force (AEF) contributions in fiscal year 2003. AFRC met
    virtually 100 percent of both aviation and support commitments,
    deployed over 23,350 (14,130 aviation and 9,220 support) mobilized and
    volunteer personnel to meet these commitments. The challenge for fiscal
    year 2004 will be to meet the continued AEF demands of the Global War
    On Terrorism primarily with volunteers if the number of mobilized
    personnel decreases.
        I would like to close by offering my sincere thanks to each member
    of this Committee for your continued support and interest in the well-
    being and quality of life of each Air Force Reservist. The recent pay
    increases and added benefits of the last few years have helped us
    through a significant and unprecedented time of higher operations
    tempo, calling for each member of the Air Force Reserve to give 200
    percent to the mission while still keeping families and employers
    happy. This will be my final opportunity to represent these fine young
    men and women as the Chief of Air Force Reserve, and I leave, knowing
    that we are on the right path: a stronger, more focused, force. A force
    no longer in Reserve, but integrated into the very fiber of the Air
    Force; the tip of the spear.
        Each of you can be proud of what we've accomplished together on
    behalf of our great nation. Again, I offer my thanks to you and my
    sincerest best wishes for the future.

                                   PERSONNEL

        Senator Stevens. Let me ask all of you this question if you
    would respond, and I think that would take my time in the first
    round anyway. The Washington Post recently had an article that
    stated that three-quarters of Army spouses believed the Army is
    likely to encounter personnel problems as soldiers and their
    families tire of the pace and leave for civilian lives. They
    quoted one expert that said 2005 is a make or break year as
    some soldiers who have already served in Iraq for a year are
    sent back for a second year.
        Is this going to be a problem in 2005 and should we do
    anything about so far as this budget is concerned? General
    Helmly.
        General Helmly. The article, if you remember, addressed the
    Active component, but I would tell you that your concerns are
    certainly applicable to the Reserve components, perhaps in some
    cases to a greater degree.
        We are vitally concerned. In our case I believe that the
    tale will be told during the period of about May through
    August. That cohort for us is about 78,000 soldiers in the Army
    Reserve who were mobilized for the initial attack in Iraqi
    Freedom. That group is the group that had the shortages that
    the previous panel addressed in body armor, shortages of
    equipment, in many cases had less than 10 days' notice that
    they were being mobilized. That same cohort had about 8,000
    Army Reserve soldiers who were demobilized only to have to be
    remobilized about a month and a half to 2 months later. So that
    is the group for us that has taken the greatest strain.
        As the previous panel noted, the current mobilization--we
    had to clean up, fix a lot of the equipment shortage problems.
    We are giving much more notice to our troops now, and the flow
    is much smoother and in a more predictable, practiced way.
    Still I am very concerned.
        As far as what this committee could do, we have sought help
    in terms of extending the targeted selected reenlistment bonus
    to Reserve component members. That is a $5,000 to $10,000 bonus
    that is widely accepted by the soldiers in theater because, of
    course, if they reenlist while they are in theater, then those
    $5,000 to $10,000 come virtually tax free. We seek your help in
    that.
        We have forwarded a list of other policy changes to the
    Department of Defense recently, seeking in many cases not
    additional funding, but policy changes to put us on, as General
    Sherrard noted, a more level footing with regard to Active
    component members on recruiting and retention. So that is my
    answer. I think that fiscal year 2005 will, indeed, be a year
    which will tell us how well we are able to sustain an
    operational force with an all-volunteer force while at war.
        Senator Stevens. Thank you. Admiral Cotton?

                                NAVAL RESERVISTS

        Admiral Cotton. Sir, since 9/11, we have had about 22,000
    naval reservists recalled to active duty, including--I see a
    gentleman right behind you--Bob Henke who honorably served in
    the gulf. That is about one-fourth of our force.
        I will also say that we have integrated many of our
    reservists into blended or associate type augment units where
    they can be utilized each month or surge for a few weeks to
    handle whatever OPTEMPO we need. So we have been able to hold
    down the total numbers.
        Our Chief of Naval Operations usually asks the question
    first, let us go to the active component to mobilize someone
    rather than always stress the Reserve component.
        I have to add that today all Admirals in the Navy, Active
    and Reserve, select Senior Executive Service, and our E-9, our
    master chief force and fleet leadership, are in Annapolis at
    the Naval Academy concluding a 3-day conference, the theme of
    which is human resources policy for the future.
        I also have to say that not only are we acting together as
    one Navy, we are also recruiting together as one Navy, using
    Reserve recruiters to recruit active, active to recruit
    reservists, and the real recruitment for the future I think is
    going to be at the active duty commanding officer when a young
    woman or a young man is leaving the service for whatever
    reason. We have to retain them in the Reserve component and
    develop a continuum of service where these individuals can come
    back in and re-serve their country. So the dynamic we are
    looking for is how do we keep them serving, coming back, and
    there will probably be some initiatives that we will come up
    with to ensure that.
        But overall, it is working well. Last month we recruited
    116 percent of our goal. So we are maintaining our end strength
    and doing well in the Navy, sir.
        Senator Stevens. General McCarthy.

                              MARINE CORPS RESERVE

        General McCarthy. Mr. Chairman, our situation is obviously
    different, dictated by our force structure. Seventy percent of
    the enlisted Marines in the Marine Corps Reserve are single, so
    we do not have quite the same level perhaps of spouse
    involvement that some of the other services do. But I think
    that the concern about family support and continued family
    support for service is one that is definitely going to be a
    factor as we go forward.
        I will tell you that the thing that I am probably most
    concerned with is our ability to continue to recruit people who
    complete their active service and in the past have affiliated
    with the Marine Corps Reserve. I think that family pressures
    that may induce them to conclude their active service may also
    influence their decision as to whether to affiliate and
    participate with the Marine Corps Reserve. So the next couple
    of years are going to be telling.
        In terms of what can be done, I think that a number of the
    initiatives that the Department has put forward this year
    regarding TRICARE are very positive. I think that anything the
    committee can do to strengthen the Montgomery GI bill would be
    a very strong plus. Forty percent of the young men and women in
    the Marine Corps Reserve are college students, so there is a
    very high interest in the Montgomery GI bill.
        I would second General Helmly and everybody on the panel's
    position with regard to equitable and the perception of
    equitable treatment. But we all have to be watching this the
    next year or 2 very carefully.
        Senator Stevens. Thank you very much.
        General Sherrard.

                                    MANPOWER

        General Sherrard. Yes, sir. I echo the comments of my
    colleagues, and I would tell you that we are watching our
    manning, in particular, with great interest because of the fact
    of ``stop-loss'' in 2002 and then it being on for a portion of
    2003. The numbers in fact are slightly low in our world today,
    but I am confident that we will end with our end strength on
    target, as well as meeting our recruiting goals. The real
    challenge is going to be retaining those members that we have
    and, again, I am very proud to say that to date, those members
    that have been activated are being retained at a higher rate
    than the remainder of our force. But again, that is a small
    piece compared to the larger picture that we have. We have got
    to continue to pursue fair and equitable compensation. I really
    believe that is the key to success as well as our ability to
    retain the members after they have satisfactorily completed
    their 20 years of service which qualify them for retirement,
    but they still have in most cases 10 to 13 years remaining that
    they can serve in our force.
        The other caution that I would say is that while we all
    seek those same things, each of us has different requirements
    and we have to be very careful that we do not do something that
    impacts on another service adversely. But I do believe that
    fair and equitable compensation, as well as understanding and
    looking at issues such as General McCarthy talked about,
    equalizing the Montgomery GI bill benefits and things of that
    type, will all enhance our ability to draw the very best to
    serve in our forces.

                                   RETENTION

        Senator Stevens. Well, last year we provided the National
    Guard and Reserve Equipment Account. I am thinking this year we
    ought to think about some kind of a National Guard and Reserve
    reenlistment account that you decide how to use it best to
    increase your retention, aimed at retention rather than
    recruiting. But think about that and let us know what you would
    like us to do. I think each one of you has different needs and
    clearly General McCarthy's are not the same as yours, but they
    still have to have some kind of retention capability. I think
    we ought to look to putting some of the money we have, either
    this year or in the supplemental at the first of the year, to
    work to assure that you have got that capability. Let us know,
    please. We would like to work with you.
        Senator Inouye.
        Senator Inouye. First of all, I agree with your plan.
        Senator Stevens. You probably thought of it and I said it.

                         ACTIVE AND RESERVE INTEGRATION

        Senator Inouye. BRAC is upon us again. General Sherrard, I
    have been advised that the Active and Reserve air forces are
    now working out an integration plan. Can you describe that to
    us?
        General Sherrard. Yes, sir. The integration plans that we
    are working are operational integration in terms of how we can
    best utilize the assets that we in the Air Force will have. As
    was mentioned by the first panel, one of the key ones that has
    truly integrated all three components serving at the same time
    within an organization is the Predator mission that we have at
    Nellis. But as I mentioned, we have been doing associate
    business in the large aircraft, the C-5, 141, the C-17, KC-10
    business for a long time. We also have associate units in the
    fighter business, as well as AWACS special operations and then
    as I mentioned also in our undergraduate pilot training
    program. I would tell you operationally we integrate and serve
    our force very well based on the fact that, as I said earlier,
    there is one standard to which we all train to.
        We still will have the administrative control circumstances
    that we have to take care of based on the law that mandates
    what a commander is responsible for and that has been given to
    each of us, as well as ensuring that we have promotion
    opportunities and a structure which will allow progression up
    through the ranks so that we, in fact, do not stymie someone
    simply because there is no place for them to go.
        But we will continue to look at operational integration and
    the best utilization of the limited assets we will have
    utilizing the highly experienced members that we bring to the
    force.
        Senator Inouye. Is that plan applicable to the other
    Reserve components, General?
        General Helmly. Senator, it is. First of all, regarding
    BRAC, there is a single office in the Army that is overseeing
    Army planning. We have representatives there. We are a part of
    that. The chief of that office, a Senior Executive Service
    employee, briefs me regularly regarding our integrated efforts
    there.
        I am in favor of additional joint basing and cooperation
    with the various State National Guards, because to the extent
    that we partner in that effort, we reduce the cost and
    investments in facilities and we are allowed to reinvest those
    dollars in operations training and such initiatives as the
    chairman spoke to for recruiting and retention.
        Regarding operational integration, we have similar
    formations as the Air Force Reserve. We call them multi-
    component organizations. Those organizations are serving us
    very well in the logistic support and medical support areas of
    the Army.

                             JOINT RESERVE CENTERS

        Admiral Cotton. Yes, sir. I would like to add that the
    Naval Reserve is a full participant in the Navy BRAC process
    and all cross-functional teams, and so we will work through our
    Chief of Naval Operations for the BRAC process.
        I would also like to add that as I mentioned before, in
    Desert Storm we got it. We started integrating more. Today
    every naval aviator that goes into combat has been trained by a
    naval reservist. It starts in the beginning, continues in
    intermediate and in advanced training. Every carrier group that
    gets trained in a joint task force exercise, the folks doing
    the training are naval reservists. These predictable and
    periodic missions that are easy to schedule are perfect for the
    skill sets that our senior and experienced reservists bring. So
    we have integrated and we are going to continue to do that and
    combine where it makes sense.
        I would like to echo what we have all said here. For the
    future, when we build Reserve centers, they should be joint
    centers. They should be joint operational support centers. They
    should mirror what we have already done with the intel
    community, with the very successful JRIC's, the joint Reserve
    intel centers. There are 27 of them around the country. But if
    we are going to build a facility, we need to have a SCIF. We
    need to have a secure area, a T-1 line so that we can
    communicate from wherever the center is via Secret Internet
    Protocol Network (SIPRNET), via secured link to the supported
    commands. And we find if you have these kind of links, you do
    not need to move someone into theater. You can do the work from
    Continental United States (CONUS) and support the warfighter
    and not have to have a footprint in theater.
        Senator Inouye. General McCarthy.
        General McCarthy. Senator Inouye, I repeat everything
    everybody else has said, especially with regard to joint
    centers. The one point I would make is that I know it is true
    for the Marine Corps Reserve, and I think it is true for most
    everyone else. We are a locally based force and while I am 100
    percent in favor of consolidating into joint centers, I think
    we need to keep our local footprint. We need to keep those
    joint centers in the communities where we exist today. That is
    where we draw people from. That is where we represent a Marine
    Corps presence. So I am opposed to the idea of clustering the
    Reserve components in just a few large installations as
    sometimes gets suggested.
        Senator Inouye. The chairman and I served in the ancient
    war. There were many differences. For example, in the regimen I
    served, 4 percent of the officers and enlisted had dependents.
    Ninety percent of us were 18, 19, 20 and unattached. I think
    that was about what it was in all the United States Army. I
    think 10 percent with dependents and 90 percent without. Today
    I believe the Army has something close to 75 percent with
    dependents. In addition, the fact that you have embedded
    journalists in just about every unit brings live action into
    every home which was not available in my time.
        Although the number of those with uniforms number just
    about 1 percent of the total population, it has become a
    national concern, a national interest. Therefore, recruiting
    and retention becomes a major concern to us. It may not be with
    us today, but with all of this happening now, we should listen
    to the chairman very carefully to come up with some program
    that will further encourage our young men and women to consider
    the military as a career because otherwise Congress and the
    administration will be called upon to use that D word. I can
    just see the concern in the populace when the D word comes up.
    So whatever you can do to enhance the recruiting and retention
    of our forces I think would be well received by this Nation of
    ours.
        Thank you very much.
        Senator Stevens. Thank you, Senator.
        Once again, you are thinking along the same lines I was
    thinking about in terms of the draft. Senator Goldwater and I
    conspired to do away with the draft. I do not know if you know
    that. We certainly do not want to see it come back. I think the
    concept of the volunteer Army has proved itself not only in the
    gulf war but in this engagement for sure.
        You were in the room when I asked the National Guard
    Generals about looking at the problem of those ammunition dumps
    in Iraq. I would welcome your review of that and attention. We
    took occasion to be briefed by the intelligence community just
    recently and I think it is something that is going to come to a
    head here fairly soon as far as Congress is concerned.
        Last year Senator Feinstein asked for some specific money
    for that purpose and we included that purpose in with the
    HUMVEE upgrading and other things that really absorbed the
    money before that subject could be totally reviewed. And I have
    apologized to her for that because I think that some of us did
    not understand the scope of it. I certainly did not. But when
    you are dealing with 1,000 to 7,000 dumps of ordnance that is
    still usable, as far as we are informed, that is a massive
    problem for the world, not just for us.
        So I would welcome your review and your suggestions on what
    we might be capable of doing in the near future. I think it may
    well be a problem for the United Nations and for the world to
    tackle, but clearly it is one of the largest problems I have
    ever looked at.
        Thank you very much for your testimony.

                              SUBCOMMITTEE RECESS

        We will reconvene on Wednesday, April 21 to hear testimony
    concerning missile defense.
        Thank you very much and good luck to all of the people
    under your command.
        [Whereupon, at 11:40 a.m., Wednesday, April 7, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    April 21.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                           WEDNESDAY, APRIL 21, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:08 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Shelby, Burns, Inouye,
    Dorgan, and Feinstein.

                             DEPARTMENT OF DEFENSE

                             Missile Defense Agency

    STATEMENT OF LIEUTENANT GENERAL RONALD T. KADISH, U.S.
                AIR FORCE, DIRECTOR, MISSILE DEFENSE AGENCY

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning, General Kadish. We're
    pleased to have you here. Pardon me for being a few minutes
    late.
        This is your 5th year before us, General, and we think
    you've done a tremendous job in helping to secure a reliable
    missile defense system for our Nation. You've provided the
    leadership and vision to achieve that goal and we're grateful
    and thankful for your service. And I'm pleased that I've been
    able to travel with you and to understand your plans. We know
    this is your last appearance before the subcommittee and we do
    wish you the very best in whatever your endeavors may be. But
    just keep in mind, my friend, my first father-in-law said that
    the English language is the only language in which retire means
    other than go to bed.
        On December 16, 2002, President Bush stated the Department
    of Defense (DOD) shall proceed with plans to deploy a set of
    Initial Missile Defense capabilities beginning in 2004. By the
    end of this year the United States will in fact have Initial
    Ballistic Missile Defense capabilities and we're proud that you
    chose Alaska to have a role in that development. Having such a
    system will hopefully mean that we'll never have to use it in
    the future. So we look forward to hearing about what you've
    done to date and to giving us an update on the overall Missile
    Defense program that you have fashioned and led so well.
        Before I open, let me turn to my colleague, my co-chairman
    for his remarks.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. I thank you very much. I wish to associate
    myself with the remarks of the Chairman and to say to General
    Kadish I thank you very much for your tireless dedication to
    your country, to the Missile Defense program, and DOD. I wish
    to congratulate you and best wishes on your future endeavors.
    Thank you, sir.
        May I have the rest of the statement made part of the
    record?
        Senator Stevens. Without objection, so ordered.
        [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.
        General, I understand that this will be your last time
    testifying before us. You have held this position for nearly
    five years--much longer than most agency Director tours. You
    have certainly demonstrated your tremendous dedication and
    stamina, and I thank you for your tireless dedication to the
    missile defense program, to the Department of Defense, and to
    our country--congratulations and best wishes on your upcoming
    retirement.
        Through your five years of service, General, you understand
    better than anyone that missile defense is a program of great
    interest to many, and one with plenty of controversy.
        This September the Department plans to deploy a limited
    national missile defense system. This is an exciting
    achievement following decades of work in the field. Some of
    your critics, however, argue that the system is not yet ready,
    and more operational testing needs to be done to ensure that
    this limited system actually works. I look forward to hearing
    your response to these critics during our discussions today.
        Missile defense is, by its very nature, a complex program.
    Despite successes in recent tests--and for that I commend you--
    there are still many technological hurdles to overcome, and
    much work remains to be done.
        This year's budget request continues the growth we have
    seen in recent years for the missile defense programs. Over $10
    billion is in the President's budget for missile defense
    activities, an increase of $1 billion over last year's
    appropriation. Sustaining this magnitude of increases in the
    out-years will be challenging.
        Despite these challenges, the missile defense program is
    one of the most critical national security issues of today and
    for the foreseeable future. The ballistic missile threat to the
    United States, to our troops deployed overseas, and to our
    allies and friends around the world will continue to
    proliferate.
        This committee understands the importance of a strong
    missile defense to our national security, and we will do our
    best to continue to support your efforts. Nevertheless, given
    the risks and rising costs of this program we will remain ever
    vigilant in our oversight.
        General, I look forward to our discussions today on the
    fiscal year 2005 budget request and the priorities and
    challenges of the missile defense program.

        Senator Stevens. Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Mr. Chairman, I just want to echo what you
    and Senator Inouye have said about General Kadish. He served
    with great distinction and he served in this post for 5 years.
    That's extraordinary, General, and we wish you the best and we
    all hope to see you before you actually retire.
        Senator Stevens. Senator Cochran.
        Senator Cochran. Senator Burns was here before I was.
        Senator Stevens. He's a stealth Senator. Senator Burns.

                       STATEMENT OF SENATOR CONRAD BURNS

        Senator Burns. The day I become a stealth, that will become
    a great day. Thank you, Mr. Chairman. I just want to offer my
    statement for the record today, and I also want to associate my
    words with the chairman. General Kadish, we have traveled
    together and 5 years is a long time, especially in the work
    that you were doing and you've done it well. I don't know what
    you're going to do in retirement and you know what? I don't
    care. But we hope it's, you know, the last, General Fogelman
    retired, you know, why, he thought he went from chief, you
    know, he's got one of the great businesses there is in
    Southwestern Colorado. And he's really enjoying it very much;
    Ron's Johns. So retirement means many things to many people.
    But I will tell you we see him every now and again and we want
    to continue to see you around here every now and again too,
    because we rely on your advice and your good sense about this
    very important issue. So feel free to drop by any time and if
    you're going to retire, why, just have a great retirement.
        [The statement follows:]

                   Prepared Statement of Senator Conrad Burns

        General Kadish, it appears you have come to brief this
    Committee on the Missile Defense Agency budget for the last
    time. Thank you for your service to our great Nation. You have
    been critical to the continuing success of the Missile Defense
    Agency. I wish you luck in your future endeavors.
        I read daily of our forces in the field using American
    ingenuity to develop unconventional solutions to solve problems
    they face. I appreciate your efforts to pursue innovation in
    technology, acquisition processes, and deployment strategy, to
    meet the challenges of the evolving ballistic missile threat.
        As we move into the phase of what you are calling ``Initial
    Defensive Operations'', to provide an initial capability to
    defeat an incoming ballistic missile threat, I look forward to
    the growth of this capability to allow us to defeat
    increasingly complex, and numerous missile threats launched
    against our homeland, our fleet, and our deployed forces
    overseas.
        The technical challenges you face are formidable, but the
    stakes are high for our Nation. We must counter the threat of
    ballistic missile proliferation. I hope you are right in
    stating that the deployment of the layered missile defense
    program could persuade rogue states to forego their plans to
    develop ballistic missiles, but I reserve a sense of skepticism
    of this possibility.
        We centralized missile defense system development with the
    formation of your agency in DOD to synergize the service
    solutions, which, at the time, competed for defense dollars
    within and between the services. I look forward to the layered
    system that leverages this centralization to develop open
    architectures, common interfaces, and standardized subsystems,
    minimize the system operational costs, and increase competition
    among the Industry providers of these systems.
        While I support the flexibility provided by the new
    acquisition approach, this flexibility brings with it greater
    exposure to risks. The budgetary classification of the
    resources within the Missile Defense Agency, which are
    primarily advanced technology development, do not require the
    customary depth of oversight, which comes from Defense
    Acquisition Boards making recommendations to transition between
    budget resource types. I caution you to be judicious with the
    resources we provide your agency.
        You are developing international partnerships with some of
    our allies, such as the United Kingdom, Australia, and Japan. I
    support this effort to share the development burden and benefit
    with our key allies in the war on terror. They have remained
    part of our coalition in these difficult times, and our shared
    values will keep our alliance strong.
        Again, I thank you for being here today and look forward to
    the discussion this morning. Thank you.

        Senator Stevens. Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you. General Kadish,
    congratulations to you on your successful tenure as Director of
    the Missile Defense Agency (MDA). And your skill has been quite
    obvious in how you have helped mobilize the resources of our
    Defense Department and our Government to carry out the
    provisions of the National Missile Defense Act that the
    Congress passed, and was signed by the President several years
    ago. We think you've done a magnificent job and we appreciate
    very much your hard work over this long period of years.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you, Senator.
        General, we've all been around the military long enough to
    know you made a real sacrifice in sticking to this job. You
    could have moved on and had four stars but you have finished
    this job and we congratulate you and we admire you and we're
    thankful that you did it. Thank you, sir.

                STATEMENT OF LIEUTENANT GENERAL RONALD T. KADISH

        General Kadish. Thank you, Mr. Chairman, Senator Inouye,
    members of the committee. I would like to express my
    appreciation for the help of this committee in making the 5
    years that I served as the Director of the Missile Defense
    Agency as productive and pleasant as they have been. My
    association with this committee has been one of the highlights
    of my tenure in the Missile Defense Agency, and I'd just like
    to point out for Senator Burns' benefit that I look at it as
    leaving active duty, not retiring. But it is a change.
        We have made tremendous progress in the Missile Defense
    Technology Program over the last 5 years and certainly over the
    last year. And if I might, Mr. Chairman, I'd like to just have
    a very brief statement this morning and I'd like for my full
    statement to be entered into the record, if you so choose.
        Our direction from the President and the Congress is 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. And I'm pleased to report today that
    we're on track to do that just this year.
        Beginning in 2001, we proposed building over time, a single
    integrated ballistic missile defense system of layered
    defenses, and we structured the program to deal with the
    enormity and the complexity of that task. Our budget request
    allows us to continue our aggressive research and development
    effort to design, build and test elements of the system in an
    evolutionary way, and it provides for modest fielding over the
    next several years.
        With an evolutionary capability based acquisition approach
    and our aggressive research, development, test and evaluation
    (RDT&E) program we can put capability into the field, we can
    test it, we can train with it, we can get comfortable with it,
    we can learn what works well and what does not and improve it
    as soon as we can. That is, in a nutshell, what our program
    does.
        We are working routinely with Admiral Ellis from STRATCOM
    and the war-fighting community. Once the system is placed on
    alert we'll continue to conduct tests to gain even greater
    confidence in the operational capability that we have. We are
    working very closely with Mr. Christie and the operational test
    community. The thousands of tests we have conducted in the air,
    on the ground and in the laboratory with our modeling and
    simulations help identify problems so we can fix them and
    highlight any problems so we can address them directly.
        The RDT&E program is working. We are focused on the
    development of the most promising near-term elements, namely
    the ground-based midcourse and Aegis ballistic missile defense
    (BMD). But the Terminal High Altitude Area Defense, or THAAD,
    is progressing very well and will add capabilities to engage in
    the late midcourse and terminal layers very soon.
        In this budget we increased the investment and development
    of the boost phase layer, which we believe can offer a high
    payoff improvement to the system. Two program elements, the
    Directed Energy Laser Program and the Kinetic Energy
    Interceptor Program for hit-to-kill capability, represent
    parallel paths and complement each other.
        Mr. Chairman, Senator Inouye, thanks to the tens of
    thousands of talented and dedicated people across this country,
    America's missile defense program is on track. The Missile
    Defense Agency is doing what we told the Congress we would do,
    and your support, in particular this committee's support, has
    been critical to the progress we've made.

                               PREPARED STATEMENT

        Thank you, Mr. Chairman, and I'm ready to answer any
    questions you might have.
        [The statement follows:]

           Prepared Statement of Lieutenant General Ronald T. Kadish

        Good morning, Mr. Chairman, Members of the Committee. It is an
    honor to be here today to present the Department of Defense's fiscal
    year 2005 Missile Defense Program and budget.
        Today, I would like to outline what we are doing in the program,
    why we are doing it, and how we are progressing. I also will address
    why we proposed taking the next steps in our evolutionary development
    and fielding program. Then I want to emphasize the importance of the
    acquisition strategy we are using and close with some observations
    about testing and the Department's approach to Missile Defense Agency
    (MDA) management.
        Our National Intelligence Estimates continue to warn that in coming
    years we will face ballistic missile threats from a variety of actors.
    The recent events surrounding Libya's admission concerning its
    ballistic missile and weapons of mass destruction programs remind us
    that we are vulnerable. Ballistic missiles armed with any type warhead
    would give our adversaries the capability to threaten or inflict
    catastrophic damage.
        Our direction from the President is 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. This budget
    continues to implement that guidance in two ways.
        First it continues an aggressive Research, Development, Test and
    Evaluation (RDT&E) effort to design, build and test the elements of a
    single Ballistic Missile Defense (BMD) system in an evolutionary way.
    Second, it provides for modest fielding of this capability over the
    next several years.
        We recognize the priority our nation and this President ascribe to
    missile defense, and our program is structured to deal with the
    enormity and complexity of the task. The missile defense investments of
    four Administrations and ten Congresses are paying off. We are
    capitalizing on our steady progress since the days of the Strategic
    Defense Initiative and will present to our Combatant Commanders by the
    end of 2004 an initial missile defense capability to defeat near-term
    threats of greatest concern.

                        BALLISTIC MISSILE DEFENSE SYSTEM

        Layered defenses help reduce the chances that any hostile missile
    will get through to its target. They give us better protection by
    enabling engagements in all phases of a missile's flight and make it
    possible to have a high degree of confidence in the performance of the
    missile defense system. The reliability, synergy, and effectiveness of
    the BMD system can be improved by fielding overlapping, complementary
    capabilities. In other words, the ability to hit a missile in boost,
    midcourse, or terminal phase of flight enhances system performance
    against an operationally challenging threat. See Chart 1.

                     Chart 1.--BMD System Engagement Phases

        All of these layered defense elements must be integrated. And there
    must be a battle management, command and control system that can engage
    or reengage targets as appropriate. And it all must work within a
    window of a few minutes. We believe that a layered missile defense not
    only increases the chances that the hostile missile and its payload
    will be destroyed, but it also can be very effective against
    countermeasures and must give pause to potential adversaries.
        So, beginning in 2001 we proposed development of a joint,
    integrated BMD system. Yet such unprecedented complexity is not handled
    well by our conventional acquisition processes. At that time, the
    Services had responsibility for independently developing ground-based,
    sea-based, and airborne missile defenses. The Department's approach was
    element- or Service-centric, and we executed multiple Major Defense
    Acquisition Programs (MDAPs).
        Today, as a result of defense transformation and a streamlined
    process instituted by the Secretary of Defense in 2001 to enhance
    overall integration, we are managing the BMD system as a single MDAP
    instead of a loose collection of Service-specific autonomous systems.
    We have come to understand over the years, though, that no one
    technology, defense basing mode, or architecture can provide the BMD
    protection we need. Redundancy is a virtue, and so we established a
    system-centric approach involving multiple elements designed,
    developed, and built with full integration foremost in our minds. When
    we made this change, we instituted a ``capability-based'' acquisition
    process instead of a ``threat-based'' process. Let me explain why this
    is important.
        Most defense programs are developed with a specific threat--or
    threats--in mind. Twenty years ago, the ballistic missile threat was
    pretty much limited to Soviet intercontinental ballistic missiles
    (ICBMs) and sea-launched ballistic missiles. But today we have to
    consider a wide range of missile threats posed by a long list of
    potential adversaries. And those threats are constantly changing and
    unpredictable. Our potential adversaries vary widely in their military
    capabilities and rates of economic and technological development. Many
    of them have a tradition of political instability.
        Weapon systems developed using a threat-based system are guided and
    governed by Operational Requirements Documents (ORDs). These documents
    establish hard thresholds and objectives for the development and
    deployment of every component. ORDs may be entirely appropriate for
    most development programs because they build linearly on existing
    systems. For example, aircraft program managers understand lift and
    thrust from previous programs going all the way back to the Wright
    brothers.
        Not so for missile defense. Most missile defense development takes
    place in uncharted waters. Any ORD developed for an integrated, layered
    missile defense system would be largely guesswork. ORDs rely on very
    precise definitions of the threat and can remain in effect for years,
    making this process all the more debilitating for the unprecedented
    engineering work we are doing. The reality that we may have to
    introduce groundbreaking technologies on a rapid schedule and also deal
    with threats that are unpredictable render the threat-based acquisition
    structure obsolete.
        A capability-based approach relies on continuing and comprehensive
    assessments of the threat, available technology, and what can be built
    to do an acceptable job, and does not accommodate a hard requirement
    that may not be appropriate.
        Perhaps the most telling difference between the two acquisition
    approaches is that our capabilities to perform are updated every four
    to eight months to reflect and accommodate the pace of our progress. We
    are no longer compelled to pursue a one hundred percent solution for
    every possible attack scenario before we can provide any defense at
    all. We are now able to develop and field a system that provides some
    capability that we do not have today with the knowledge that we will
    continue to improve that system over time. We call this evolutionary,
    capability-based development and acquisition.

                  INITIAL DEFENSIVE CAPABILITY--THE BEGINNING

        On December 16, 2002, President Bush directed that we begin
    fielding a missile defense system in 2004 and 2005. The President's
    direction recognizes that the first systems we field will have a
    limited operational capability. He directed that we field what we have,
    then improve what we have fielded. The President thus codified in
    national policy the principle of Evolutionary, Capability-Based
    Acquisition and applied it to missile defense.
        The President's direction also builds on the 1999 National Missile
    Defense Act. Under this Act, deployment shall take place ``as soon as
    technologically possible.'' The fact is that ballistic missile defense
    has proven itself technologically possible. Not only have most of the
    well-publicized flight tests been successful, but so have the equally
    important computer simulations and software tests. Those tests and
    upgrades will continue for a long time to come--long after the system
    is fielded and long after it is deemed operational. After all, this is
    the heart of evolutionary, capability-based acquisition. This is not a
    concept designed to trick or mislead. It is simply the logical response
    to the following question: Defenseless in the face of unpredictable
    threats, which would we rather have--some capability today or none as
    we seek a one hundred percent solution?
        When we put the midcourse elements (GMD and Aegis BMD) of the BMD
    system on alert, we will have a capability that we currently do not
    have. In my opinion, a capability against even a single reentry vehicle
    has significant military utility. Even that modest defensive capability
    will help reduce the more immediate threats to our security and enhance
    our ability to defend our interests abroad. We also may cause
    adversaries of the United States to rethink their investments in
    ballistic missiles. Because of this committee's continued support we
    will have some capability this year against near-term threats.
        I must emphasize that what we do in 2004 and 2005 is only the
    starting point--the beginning--and it involves very basic capability.
    Our strategy is to build on this beginning to make the BMD system
    increasingly more effective and reliable against current threats and
    hedge against changing future threats.
        We have made significant strides towards improving our ability to
    intercept short-range missiles. Two years ago we began sending Patriot
    Advanced Capability 3 (PAC-3) missiles to units in the field. Based on
    the available data, the Patriot system, including PAC-3, successfully
    intercepted all threatening short-range ballistic missiles during
    Operation Iraqi Freedom last year. Today, it is being integrated into
    the forces of our allies and friends, many of whom face immediate
    short- and medium-range threats. We believe it is the only combat-
    tested missile defense capability in the world.
        This year we are expanding our country's missile defense portfolio
    by preparing for alert status a BMD system to defend the United States
    against a long-range ballistic missile attack. Chart 2 provides a basic
    description of how we could engage a warhead launched against the
    United States.

                         Chart 2.--Engagement Sequence

        Last year, we made it clear that this initial capability would be
    very basic if it were used. We also emphasized that instead of building
    a test bed that might be used operationally, we would field more
    interceptors and have them available for use while we continue to test.
    Because the test bed provides the infrastructure for this initial
    capability, the additional budget request for the twenty Block 2004
    interceptors and associated support was about $1.5 billion in fiscal
    year 2004 and fiscal year 2005.
        Forces to be placed on alert as part of the initial configuration
    include up to 20 ground-based interceptors at Fort Greely, Alaska and
    Vandenberg AFB, an upgraded Cobra Dane radar on Eareckson Air Station
    in Alaska, and an upgraded early warning radar in the United Kingdom.
    We are procuring equipment for three BMD-capable Aegis cruisers with up
    to ten SM-3 missiles to be available by the end of 2005. The Navy is
    working very closely with us on ship availability schedules to support
    that plan. Additionally, ten Aegis destroyers will be modified with
    improved SPY-1 radars to provide flexible long-range surveillance and
    track capability of ICBM threats by the end of 2005, with an additional
    five destroyers with this capability by 2006, for a total of 15 Aegis
    BMD destroyers and three Aegis BMD cruisers.
        The fiscal year 2005 request funds important for Block 2006
    activities to enhance those capabilities and system integration, which
    I will discuss in a moment.
        The Missile Defense Agency, the Combatant Commanders, the Joint
    Staff, the Military Services, and the Director, Operational Test and
    Evaluation (DOT&E) are working together to prepare for Initial
    Defensive Operations (IDO). Using the core capability provided by
    Ground-based Midcourse Defense (GMD) and augmenting it with the
    appropriate Command, Control, Battle Management and Communications
    (C\2\BM/C) infrastructure between Combatant Commanders and exploiting
    the Aegis contribution in a surveillance and track mode, we have
    created an initial capability from which we can evolve.
        Our current fielding plans have been built on the Test Bed
    configuration we proposed two years ago and are within 60 days of our
    schedule. Silo and facility construction at Fort Greely, Alaska and
    Vandenberg Air Force Base in California is proceeding well.
    Preparations at Eareckson Air Station in Shemya, Alaska are on track.
    Over 12,000 miles of fiber optic cables connecting major communication
    nodes are in place, along with nine satellite communications links. We
    are in the process of upgrading the Early Warning Radar at Beale Air
    Force Base and are well underway building the sea-based X-band radar.
    Our brigade at Schriever Air Force Base and battalion fire control
    nodes at Fort Greely are connected to the Cheyenne Mountain Operations
    Center. The C\2\BM/C between combatant commanders, so essential to
    providing situational awareness, is progressing well and is on
    schedule. Upgrades to the Cobra Dane Radar are ahead of schedule. The
    Chief of Naval Operations has identified the first group of Aegis ships
    to be upgraded with a BMD capability, and the work to install the
    equipment on the first of these ships has begun.
        Once the system is placed on alert, we will continue to conduct
    tests concurrently to gain even greater confidence in its operational
    capability. Additionally, we plan activities to sustain the concurrent
    test and operations and support of the system. We are laying in the
    infrastructure to build, test, sustain, and evolve our system as a part
    of the capabilities-based approach inherent in our strategy.
        An integral working relationship with the warfighter, the BMD
    system user, is critical to the success of this mission. We are working
    together to ensure that we field a system that is militarily useful and
    operationally supportable and fills gaps in our defenses. The support
    centers we are establishing will provide critical training to
    commanders in the field. The necessary doctrines, concepts of
    operation, contingency plans, and operational plans are being developed
    under the lead of U.S. Strategic Command (USSTRATCOM) and in
    cooperation with U.S. Northern Command, Pacific Command, European
    Command, and United States Forces in Korea.

         IMPROVING FIELDED CAPABILITY THROUGH EVOLUTIONARY ACQUISITION

        The system's evolutionary nature requires us to look out over the
    next three or four years and beyond in our planning. Although it is not
    easy, we have laid out a budget and a plan to shape the missile defense
    operational architecture beyond the Block 2004 initial defensive
    capability.
        In this budget, beginning with Block 2006 we will increase GMD
    Ground-Based Interceptors (GBIs) and Aegis SM-3 interceptors, deploy
    new capabilities (such as THAAD), expand our sensor net (with a second
    sea-based midcourse radar and forward deployable radars), and enhance
    the C\2\BM/C system integration. The fiscal year 2005 request begins to
    fund important Block 2006 activities to enhance existing capabilities
    and system integration. Our improvement plan is to add up to ten GBIs
    to the site at Fort Greely and possibly initiate long-lead acquisition
    of up to ten more for fielding at a potential third site or at Fort
    Greely. We will continue to augment our sea-based force structure with
    additional SM-3 interceptors and BMD-capable Aegis-class ships.
        Much of this system augmentation effort involves extending and
    building on capabilities that we have been working on over the past
    several years, so I am confident that what we are doing is both
    possible and prudent and in line with our missile defense vision.
        The confidence we achieve through our entire test program is
    reinforced by the fact that many missile defense test articles fielded
    in the existing test bed are the same ones we would use in an
    operational setting. Except for interceptors, which are one-time use
    assets, we will use the same sensors, ships, communications links,
    algorithms, and command and control facilities. The essential
    difference between an inherent capability in a test bed and the near-
    term on-alert capability is having a few extra missiles beyond those
    needed for testing and having enough trained operators and logistics on
    hand and ready to respond around the clock. Once we field the system,
    we will be in a better position, literally, to test system components
    and demonstrate BMD technologies in a more rigorous, more operationally
    realistic environment. Testing will lead to further improvements in the
    system and refinement of our models, and the expansion and upgrades of
    the system will lead to further testing.
        The system we initially will put on alert is modest. It is modest
    not because the inherent capabilities of the sensors and interceptors
    themselves are somehow deficient, but rather because we will have a
    small quantity of weapons. The additional ten missiles for Fort Greely
    will improve the overall system by giving us a larger inventory. Yet
    today, and over the near-term, we are inventory poor. Block activities
    throughout the remainder of this decade will be focused in part on
    improving the system by delivering to the warfighter greater
    capabilities with improved performance.
        Why is this important? In a defense emergency or wartime engagement
    situation, more is better. A larger inventory of interceptors will
    handle more threatening warheads. Our planning beyond the Block 2004
    initial configuration has this important warfighting objective in mind.
    There are no pre-conceived limits in the number of weapon rounds we
    should buy. We will build capabilities consistent with the national
    security objectives required to effectively deter our adversaries and
    defend ourselves and our allies.
        We also must think beyond the initial defensive capability if we
    are to meet our key national security objective of defending our
    friends and allies from missile attack. In Block 2006, we are preparing
    to move forward when appropriate to build a third GBI site at a
    location outside the United States. Not only will this site add synergy
    to the overall BMD system by protecting the United States, but it will
    put us in a better position to defend our allies and friends and troops
    overseas against long-range ballistic missiles. For the cost of ten
    GBIs and associated infrastructure, we will be able to demonstrate in
    the most convincing way possible our commitment to this critical
    mission objective. The location of this site is still subject to
    negotiation with no final architecture defined nor investment committed
    until fiscal year 2006.
        As I have said all along, we are not building to a grand design. We
    are building an evolutionary system that will respond to our technical
    progress and reflect real world developments. We added about $500
    million to last year's projected fiscal year 2005 budget estimate to
    begin funding our Block 2006 efforts. As you can see, the system can
    evolve over time in an affordable way in response to our perception of
    the threat, our technical progress, and our understanding of how we
    want to use the system. Yet even as it does evolve, our vision remains
    constant-to defeat all ranges of missiles in all phases of flight.

            TESTING MISSILE DEFENSES--WE NEED TO BUILD IT TO TEST IT

        Another key question surrounds the nature of missile defense
    systems themselves. How do you realistically test an enormous and
    complex system, one that covers eight time zones and engages enemy
    warheads in space? The answer is that we have to build it as we would
    configure it for operations in order to test it. That is exactly what
    we are doing by building our test bed and putting it on alert this
    year.
        By hooking it all up and putting what we have developed in the
    field, we will be in a better position to fine-tune the system and
    improve its performance. Testing system operational capability in this
    program is, in many ways, different from operational testing involving
    more traditional weapon systems. All weapon systems should be tested in
    their operational environments or in environments that nearly
    approximate operational conditions. This is more readily accomplished
    for some systems, and is more difficult to do for others.
        For example, an aircraft's operational environment is the
    atmosphere. Similarly, when we conduct rigorous operational tests of
    our Navy's ships, we do so at sea--in their environment. The BMD
    system's operational environment is very different. It is a
    geographically dispersed region that is also a test bed. For both
    missile defense testing and operations, geography counts. After we have
    gone through the simulations, the bench tests, and the flybys, we want
    to test all missile defense parts together under conditions that are as
    nearly operationally realistic as we can make them--with sensors
    deployed out front, with targets and interceptors spaced far enough
    apart to replicate actual engagement distances, speeds and sequences,
    with communication links established, and with command and control
    elements in place. We in fact have conducted a number of events that
    exercise the projected communication and command and control paths
    required to link elements of the BMD system in what we call
    ``Engagement Sequence Groups,'' building our confidence that we can
    combine threat data from different systems across a third of the globe
    to allow for the engagement of ballistic missiles threats to the entire
    United States.
        One of the key questions that we have to answer is: What is the
    role of operational testing in an unprecedented, evolutionary,
    capability-based program? The answer is that the Director, Operational
    Test and Evaluation, and the Operational Test Agencies play a critical
    role in missile defense. Since evolutionary, capability-based processes
    do not fit the traditional ORD-based operational test methodology, we
    have applied an assessment approach that provides for a continuous
    assessment of the capabilities and limitations of the BMD system. Since
    testing is central to our RDT&E program and our operational
    understanding of the system, we are continuing to modernize and improve
    our test infrastructure to support more operationally realistic
    testing.
        We are working very closely with Mr. Christie, the DOT&E, and the
    operational test community. As our tests are planned, executed, and
    evaluated, the BMD system Combined Test Force, which brings together
    representatives from across the testing community, is combining
    requirements for both developmental and operational capability testing.
    Wherever possible we are making every test both operationally realistic
    and developmental. We have been working daily with the appropriate
    independent operational test agencies (OTA) to ensure they are on board
    with our objectives and processes. There are approximately 100
    operational test personnel embedded in all facets of missile defense
    test planning and execution who have access to all of our test data.
    They have the ability to influence every aspect of our test planning
    and execution.
        Now, how much confidence should we have in using this test bed in
    an alert status? The full range of missile defense testing--from our
    extensive modeling and simulation and hardware-in-the-loop tests to our
    ground and flight testing--makes us confident that what we deploy will
    work as intended. We do not rely on intercept flight tests to make
    final assessments concerning system reliability and performance. Our
    flight tests are important building blocks in this process, but the
    significant costs of these tests combined with the practical reality
    that we can only conduct a few tests over any given period of time mean
    we have to rely on other kinds of tests to prove the system. System
    capabilities assessed for IDO will be based on test events planned for
    fiscal year 2004 as well as data collected from flight and ground tests
    and simulations over the past several years.
        The missile defense test program helps define the capabilities and
    limitations of the system. The thousands of tests we conduct in the
    air, on the ground, in the lab, and with our models and simulations in
    the virtual world predict system performance and help identify problems
    so that we can fix them. They also highlight gaps so that we can
    address them. This accumulated knowledge has and will continue to
    increase our confidence in the effectiveness of the system and its
    potential improvements. None of our tests should act as a strict
    ``pass-fail'' exercise telling us when to proceed in our development or
    fielding. We can approximate realistic scenarios, though, after we have
    put interceptors and sensors in the field and integrated them with our
    C\2\BM/C network.
        We conduct other kinds of tests that provide valuable information
    about the progress we are making and the reliability of the system.
    Integrated ground tests, for example, are not subject to flight test
    restrictions and can run numerous engagement scenarios over the course
    of a few weeks. Our modeling and simulation activity is an even more
    powerful system verification tool. It is important to understand that
    in the Missile Defense Program we use models and simulations, and not
    flight tests, as the primary verification tools. This approach is
    widely used within the Department, especially when complex weapon
    systems are involved.
        Currently, we have very good models for each one of our system
    components, and we are able to use these together to run scenarios so
    that we can understand the environments within which we operate and
    characterize the margin we have in the system design. Missile defense
    ground and flight tests anchor the data we produce in our models, which
    in turn enhance our confidence regarding the operational capability we
    can achieve, because we can understand the system's behavior in many
    hundreds of test runs. These models are regularly updated using test
    data from our ground and flight tests. Over time we are building up our
    modeling and simulation capability at the system level to approximate
    more closely the type of end-to-end testing we would like to have to
    verify that the system is doing what we want it to do.
        For example, our modeling and simulation capabilities are very
    accurate and allow us to mirror the achieved outcome of a flight test.
    The graphic below provides an example of why we believe our simulation
    capabilities to be the most powerful tools for projecting the
    reliability of the initial BMD system. In Figure 1 we have mapped out
    the predicted performance of the Integrated Flight Test 13B interceptor
    and matched it up with performance data we collected during the flight.
    The match up is nearly exact, and it shows that the Exo-atmospheric
    Kill Vehicle Mass Simulator was very close to the predicted insertion
    point velocity.

                       Figure 1. Booster Velocity/IFT 13B

        Generally, when we deploy a weapon system in a traditional mission
    area, it is appropriate to conduct initial operational testing to
    ensure that the replacement system provides a better capability than
    the existing system. Put another way, there is a presumption that the
    deployed system should be used until a better capability is proven. In
    the current situation, where we have no weapon system fielded to defend
    the United States against even a limited attack by ICBMs, that
    presumption must be re-examined. With the provision of a militarily
    useful capability, even if it is limited, it is presumed that the
    capability can be fielded unless it is determined that operating the
    initial capability is considered to be an unacceptable danger to the
    operators, or any other similar reality.
        USSTRATCOM will factor in all available test information into its
    military utility assessment of the fielded condition.

       BALLISTIC MISSILE DEFENSE SYSTEM RESEARCH AND DEVELOPMENT PROGRAM

        We have requested $7.6 billion in fiscal year 2005 to continue our
    investment in missile defense RDT&E. Why do we need this level of
    investment in RDT&E? We need to press forward with our missile defense
    research and development if we are to improve the system by integrating
    upgraded or more advanced components and by exploiting new basing modes
    to engage threat missiles in, for example, the boost phase of flight.
    We have to lay the RDT&E foundation for evolutionary improvements to
    the BMD system. We intend to improve the capability of the midcourse
    phase while adding additional layers.
        The RDT&E program is working. The ability to make trade-offs among
    our development activities has allowed us to focus on the development
    of the most promising near-term elements, namely, GMD, Aegis BMD and
    PAC-3. GMD and Aegis BMD make up elements of the midcourse defense
    layer while PAC-3 provides capability in the terminal layer. The GMD
    fiscal year 2005 budget request is $3.2 billion; the request for Aegis
    is $1.1 billion.
        In this budget we increase investment in the development of a boost
    layer. Two program elements, a high energy laser capability and a new
    kinetic energy interceptor (KEI) or ``hit to kill'' capability,
    represent parallel paths and complement each other. Achieving
    capability in the boost phase as soon as practicable would be a
    revolutionary, high-payoff improvement to the BMD system. Although the
    technologies are well known, the engineering and integration required
    to make them work are very high risk. Therefore, having parallel
    approaches, even on different timelines, is a very prudent program
    management approach. We expanded our efforts in the boost phase as soon
    as we were able after withdrawal from the 1972 Anti-Ballistic Missile
    (ABM) Treaty, which specifically prohibited boost phase development
    against long-range missiles.
        The Airborne Laser (ABL) program has been in development since
    1996. Development of an operational high energy laser for a 747
    aircraft is a difficult technical challenge. Although we have had many
    successes in individual parts of the program, we have not been able to
    make some of our key milestones over the past year. The last 20 percent
    of the program effort has proven to be very difficult, and some of the
    risks we took early in the program have impaired our present
    performance. Consequently, I reviewed the program late last year and
    directed a restructure that focused on our near-term efforts, delaying
    the procurement of the second aircraft until we could gain more
    confidence in our ability to meet schedules. I have adjusted the
    resources accordingly.
        We no longer plan for ABL to deliver a contingency capability in
    Block 2004. There have been, nevertheless, several technical
    accomplishments to date. We have demonstrated the capability to track
    an ICBM in the boost phase using ABL technologies and improved beam
    control and fire control technologies. At this time there is no reason
    to believe that we will fail to achieve this capability. This is such a
    revolutionary and high payoff capability; I believe we should again be
    patient as we work through the integration and test activities. But the
    risks remain high. The fiscal year 2005 budget request is $474 million
    for ABL.
        We undertook the KE boost effort in response to a 2002 Defense
    Science Board Summer Study recommendation. In December 2003 we awarded
    the contract for development of the KEI boost effort. This was the
    first competition unconstrained by the ABM Treaty. It was also the
    first to use capability-based spiral development as a source selection
    strategy. The contract requires development of a boost phase
    interceptor that is terrestrial-based and can be used in other
    engagement phases as well--including the midcourse and possibly exo-
    atmospheric terminal phases. In other words, it could provide boost
    phase capability as well as an affordable, competitive next-generation
    replacement for our midcourse interceptors and even add a terminal
    phase capability should it be required. In 2005, we will begin
    conducting Near-Field Infrared Experiments to get a close-up view from
    space of rocket plumes to support the development of the terrestrial-
    based interceptor seeker and provide additional data needed for the
    development of a space test bed.
        We have budgeted about $500 million for the KE boost effort for
    fiscal year 2005. I believe this funding is necessary for a successful
    start. Those who would view this amount as a significant increase that
    is unwarranted for a new effort do not understand the importance of
    prudent programming and the preparatory work required to make such a
    program ultimately succeed. There are many examples of an under-funded
    systems engineering effort, where engineering costs sky-rocketed
    because adequate upfront work was not done. Mr. Chairman, I urge the
    committee to look carefully at our proposal and allow us to get a solid
    start on this essential piece of the layered BMD system.

                            OTHER BUDGET HIGHLIGHTS

        Funding in the fiscal year 2005 request supports the Block 2004
    initial configuration as well as activities to place the BMD system on
    alert. It also lays the foundation for the future improvement of the
    system. We are requesting $9.2 billion to support this program of work,
    which is approximately a $1.5 billion increase over the fiscal year
    2004 request. The increase covers costs associated with fielding the
    first GMD, Aegis BMD, sensor, and command, control and battle
    management installments and will allow us to purchase long-lead items
    required for capability enhancements in Block 2006.
        We have made a successful transfer of the PAC-3 program to the Army
    and remain convinced that the Department made the right decision in
    doing so. In the Patriot system, missile defense and air defense are so
    intertwined that attempting to manage them separately would be
    difficult if not futile. We continue to believe that the Army is in the
    best position, given the maturity of the PAC-3, to manage future
    enhancements and procurements. Meanwhile MDA remains fully cognizant of
    the Army's efforts and maintains the PAC-3 in the BMD system as a fully
    integrated element, with interfaces controlled by our configuration
    management process. PAC-3 is part of our ongoing system development and
    testing.
        The fiscal year 2005 funding request will buy equipment to ramp up
    the testing of THAAD, which, once fielded, will add endo-atmospheric
    and exo-atmospheric terminal capabilities to the BMD system to defeat
    medium-range threats. Terminal High Altitude Area Defense (THAAD) is
    progressing well and will add capabilities to engage in the late
    midcourse and terminal layers. THAAD recently completed the Design
    Readiness Review, and development hardware manufacturing is underway.
    The fiscal year 2005 budget request is $834 million for THAAD. Delivery
    of the THAAD radar was completed ahead of schedule and rolled out this
    month. Flight testing is scheduled to begin in the first quarter of
    fiscal year 2005 at White Sands Missile Range, New Mexico.
        We will be able to begin assembly and integration of two Space
    Tracking and Surveillance System (STSS) satellites. The fiscal year
    2005 budget request for STSS is $322 million.
        We will continue development of the C\2\BM/C ``backbone'' to
    provide real-time sensor-netting to the warfighter for improved
    interoperability and decision-making capability. Additional BMD system
    C\2\BM/C suites and remote capability will be deployed to Combatant
    Commanders as the system matures.
        We also have several Science and Technology initiatives to increase
    BMD system firepower and sensor capability and extend the engagement
    battle space of terminal elements. One of our main efforts is to
    increase BMD system effectiveness in the midcourse phase by placing
    Multiple Kill Vehicles on a single booster, thus reducing the
    discrimination burden on BMD sensors. We also are conducting important
    work on advanced systems to develop laser technology and laser radar,
    advanced discrimination, improved focal plane arrays, and a high-
    altitude airship for improved surveillance, communication, and early
    warning. In support of this, we have requested about $200 million in
    the fiscal year 2005 budget request for the development of advanced
    systems.

                           INTERNATIONAL PARTNERSHIPS

        In December 2003, through a formal Cabinet Decision, the Government
    of Japan became our first ally to proceed with acquisition of a multi-
    layered BMD system, basing its initial capability on upgrades of its
    Aegis destroyers and acquisition of the SM-3 missile. In addition,
    Japan and other allied nations will upgrade their Patriot units with
    PAC-3 missiles and improved ground support equipment. We have worked
    closely with Japan since 1999 to design and develop advanced components
    for the SM-3 missile. This project will culminate in flight tests in
    2005 and 2006 that incorporate one or more of these components. These
    decisions represent a significant step forward with a close ally and we
    look forward to working together on these important efforts.
        We are undertaking major initiatives in the international arena in
    this budget. Interest among foreign governments and industry in missile
    defense has risen considerably over the past year. We have been working
    with key allies to put in place mechanisms that would provide for
    lasting cooperative efforts.
        We will begin in fiscal year 2005 to expand international
    involvement in the program by encouraging international industry
    participation and investment in the development of alternative boost/
    ascent phase element components, such as the booster, kill vehicle,
    launcher, or C\2\BM/C. This approach reduces risk, adds options for
    component evolution for potential insertion during Block 2012, and
    potentially leads to an indigenous overseas production capability. We
    intend to award a contract for this effort this year.
        In 2003 the United States signed a Memorandum of Understanding on
    Ballistic Missile Defense with the United Kingdom and an annex enabling
    the upgrade of the Fylingdales early warning radar. We are continuing
    our consultations with Denmark regarding the upgrade of the Thule radar
    site in Greenland. Australia has announced plans to participate in our
    efforts, building on its long-standing defense relationship with the
    United States. Canada also has entered into formal discussion on
    missile defense and is considering a BMD role for the U.S.-Canadian
    North American Aerospace Defense Command (NORAD). Our North Atlantic
    Treaty Organization partners have initiated a feasibility study for
    protection of NATO territory against ballistic missile attacks, which
    builds upon ongoing work to define and develop a NATO capability for
    protection of deployed forces.
        We are continuing work with Israel to implement the Arrow System
    Improvement Program and enhance its missile defense capability to
    defeat the longer-range ballistic missile threats emerging in the
    Middle East. We are also establishing a capability in the United States
    to co-produce specified Arrow interceptor missile components, which
    will help Israel meet its defense requirements more quickly and
    maintain the U.S. industrial work share. We are intent on continuing
    U.S.-Russian collaboration and are now working on the development of
    software that will be used to support the ongoing U.S.-Russian Theater
    Missile Defense exercise program.
        We have other international interoperability and technical
    cooperation projects underway as well and are working to establish
    formal agreements with other governments. Our international work is a
    priority that is consistent with our vision and supportive of our
    goals.

            WORLD-CLASS SYSTEMS ENGINEERING--THE KEY SUCCESS FACTOR

        The President's direction to defeat ballistic missiles of all
    ranges in all phases of flight drove us to develop and build a single
    integrated system of layered defenses and forced us to transition our
    thinking to become more system-centric. We established the Missile
    Defense National Team to solve the demanding technical problems ahead
    of us and capitalize on the new engineering opportunities created by
    our withdrawal from the ABM Treaty. The National Team brings together
    the best, most experienced people from the military and civilian
    government work forces, industry, and the federal laboratories to work
    aggressively and collaboratively on one of the nation's top priorities.
    No single contractor or government office has all the expertise needed
    to design and engineer an integrated and properly configured BMD
    system. Let me give a perspective on why the National Team is so
    important.
        What we have accomplished is an unprecedented integration of
    sensors communications infrastructure, and weapons that cut across
    Service responsibilities on a global scale. Even our first engagement
    sequence involves an unparalleled accomplishment.
        The BMD system will engage a long-range ballistic missile threat
    across 9,500 miles. Threat messages sent by an Aegis destroyer will
    pass this data across eight BMD system communication nodes. System data
    travels across approximately 48,000 miles of communication lines. The
    engagement takes place 3,500 from Fort Greely at an altitude of 100
    kilometers. At no time in history has there been an engagement
    performed by detection and weapon engagement systems separated by such
    distances. Over the past year and a half, we have rapidly built
    confidence in this weapon engagement capability through the use of
    proven systems and technologies coupled with robust integrated tests
    and exercises.
        The National Team's job has not been easy. System engineers work in
    a changed procurement and fielding environment, which in the missile
    defense world means making engineering assessments and decisions based
    on technical objectives and goals and possible adversary capabilities
    rather than on specifications derived from more traditional operational
    requirements documents. This unified industry team arrangement does not
    stifle innovation or compromise corporate well-being. There is firm
    government oversight and greater accessibility for all National Team
    members to organizations, people, and data relevant to our mission. We
    accomplished this without abandoning sound engineering principles,
    management discipline, or accountability practices.
        Significant benefits have resulted from this unique approach. Early
    on, this team brought to the program several major improvements,
    including: system-level integration of our command and control network;
    adoption of an integrated architecture approach to deal with
    countermeasures; development of a capability-requirement for forward-
    based sensors, such as the Forward Deployable Radar and the Sea-Based
    X-Band Radar; and identification of initial architecture trades for the
    boost/ascent phase intercept mission. The National Team also developed
    and implemented an engagement sequence group methodology, which
    optimizes performance by looking at potential engagement data flows
    through the elements and components of the system independent of
    Service or element biases. If we had retained the traditional element-
    centric engineering approach, I am doubtful that any one of the element
    prime contractors would have entertained the idea of a forward-based
    radar integrated with a ``competing'' system element. The National Team
    is central to this program.

                      RESPONSIBLE AND FLEXIBLE MANAGEMENT

        Congressional support for key changes in management and oversight
    have allowed us to execute the Missile Defense Program responsibly and
    flexibly by adjusting the program to our progress every year, improving
    decision cycle time, and making the most prudent use of the money
    allocated to us.
        One of the key process changes we made in 2001 was to engage the
    Department's top leadership in making annual decisions to accelerate,
    modify, or terminate missile defense activities. We take into account
    how each development activity contributes to effectiveness and synergy
    within the system, technical risk, schedules, and cost, and we then
    assess how it impacts our overall confidence in the effort. We have
    successfully used this process over the past three years.
        Today's program is significantly different from the program of
    three years ago. In 2001 and 2002 we terminated Space-Based Laser
    development in favor of further technology development; restructured
    the Space-Based Infrared Sensors (Low) system, renaming it the Space
    Tracking and Surveillance System, to support more risk reduction
    activities; cancelled the Navy Area program following significant cost
    overruns; and accelerated PAC-3's deployment to the field. We also
    proposed a modest beginning in fielding the BMD system and put Aegis
    BMD and its SM-3 interceptor on track to field.
        This year we have restructured the ABL program to deal more
    effectively with the technical and engineering challenges before us and
    make steady progress based on what we know. We also decided to end the
    Russian-American Observation Satellite (RAMOS) project because of
    rising levels of risk. After eight years of trying, RAMOS was not
    making the progress we had expected in negotiations with the Russian
    Federation. So we are refocusing our efforts on new areas of
    cooperation with our Russian counterparts.
        These periodic changes in the RDT&E program have collectively
    involved billions of dollars--that is, billions of dollars that have
    been invested in more promising activities, and billions of dollars
    taken out of the less efficient program efforts. The ability to manage
    flexibly in this manner saves time and money in our ultimate goal of
    fielding the best defenses available on the shortest possible timeline.
        Such decisive management moves were made collectively by senior
    leaders in the Department and in MDA. I believe these major changes are
    unprecedented in many respects and validate the management approach we
    put in place. The benefits of doing so are clearly visible today. When
    something is not working or we needed a new approach, we have taken
    action.

                                    CLOSING

        Mr. Chairman, I would like to recognize the many talented and
    dedicated people across this country who have made, and are continuing
    to make, our efforts successful. I have met with people from
    manufacturing facilities, R&D centers, and test centers. I have met
    with people from many different parts of the world who are working on
    our international efforts. Our fellow citizens should be proud of the
    talent, commitment, and dedication that every one of these people
    provides.
        We take our responsibilities very seriously. We have an obligation
    to the President, the Congress, and the American people to get it
    right. With the continued strong support of Congress and this
    committee, we will continue our progress in defending the United
    States, our troops, and our allies and friends against all ranges of
    ballistic missiles in all phases of flight.
        Thank you, and I look forward to your questions.

        Senator Stevens. Thank you very much. I will turn to
    Senator Inouye first.
        Senator Inouye. Mr. Chairman, if I may, may I submit my
    questions?
        Senator Stevens. Yes sir.
        Who was first? Senator Shelby.
        Senator Shelby. Yes sir. Thank you.

                   EXOATMOSPHERIC KILL VEHICLE (EKV) REPAIRS

        General, could you give us the progress update on the EKV
    repairs as we approach IFT-13C.
        General Kadish. Yes Senator, I'd be glad to. I'd like to go
    back in history just a little bit. About 1 year ago we decided
    that some design changes were needed to both the kill vehicle
    and our booster to make it better. And that was a result of a
    number of flight tests that we'd done prior to that time.
        Senator Shelby. What have you learned here?
        General Kadish. We've learned, I guess the biggest thing
    we've learned is, it's pretty hard to make some major changes
    in less than 1 year. But we've done it. And we made those
    changes, we put it into the workflow and there's about seven or
    eight kill vehicles in work right now for the balance of this
    year. But in the process of doing that we discovered a circuit
    board that was not manufactured properly. And when we found
    that particular effort we not only decided to fix that circuit
    board, which would have taken about 3 or 4 weeks, or a month,
    of a delay. But we decided that it was in the best interest of
    quality and mission assurance practices to go back and put a
    team of experts--and we put about 40 or 50 people on this
    effort--and we went through each and every aspect of the design
    of the kill vehicle, to make sure that we didn't make any of
    those mistakes that we didn't know about. And we have completed
    that effort, we are in the process of changing a few things
    that we found and that has resulted in a little bit more of a
    delay to the flight tests this year. But I am confident that
    when we complete that process and we actually do the flight
    tests we will have done everything we could possibly do to make
    that kill vehicle work properly.

                   GROUND-BASED MISSILE DEFENSE (GMD) FUNDING

        Senator Shelby. General, the ground-based midcourse defense
    segment, the multiple kill vehicle program and the Kinetic
    Energy Interceptor program I think are very important. In the
    2005 funding request it's increased to $9.2 billion, $1.2
    billion over 2004. There's some concerns, though, that GMD is
    underfunded due to greater internal competition for funds. MDA,
    I believe, must find the proper funding balance to accomplish
    its goals and beyond for the Ballistic Missile Defense System
    architecture. I know that you've requested a significant
    increase in funding for the MDA programs, but I'm concerned
    about the health of GMD and success there. Are you trying to do
    too much with too little? I know you never have enough funds.
    Do you want to speak on that?
        General Kadish. Well Senator, that's a problem we deal with
    every day, internally. And you're right. We never have enough
    funds for what we would like to do in any program.
        Senator Shelby. Do you have enough funds to meet your GMD
    development testing and deployment objectives at this point?
        General Kadish. We believe when we balance everything out
    we will have enough resources to do that. I think the GMD part
    of this is about $3.2 or so billion this year, a little bit
    less than that next year, and I think we're working on $2
    billion the following year. In fact, we've added about $1.5
    billion for fiscal year 2004, most of that goes to GMD in the
    sense of further building out missiles and doing the test
    program that we need to do. And we'll continue to look at the
    other aspects of what we need to do and whether it's the multi-
    kill vehicle or the Kinetic Interceptor (KI) boost or Aegis,
    and make sure that we do the best we can with the money we
    have. And so far----

                                  MDA FUNDING

        Senator Shelby. If you had more money it wouldn't hurt
    anything, would it?
        General Kadish. Senator, I'd never turn down more money.
    But I think it's incumbent on us, internally MDA, to make sure
    that we get the most out of every dollar that we get. And we're
    trying to do that, and it's a constant balancing of effort in
    the process.
        Senator Shelby. Thank you, General.
        Senator Stevens. Senator Burns.
        Senator Burns. General, the Missile Defense Agency's annual
    budget requests are somewhere between $8 and $10 billion. Does
    this funding cover only development, and how are the
    traditional acquisition procurement wedges incorporated with
    the Ballistic Missile Defense System? In other words, have you
    changed anything in there, in that process?
        General Kadish. Yes we have, Senator, and the $8 to $10
    billion request, at least for 2004, 2005, 2006 and part of 2007
    right now includes about anywhere from $1 billion to $2 billion
    a year of money for fielding equipment. Now, I didn't use the
    word procurement here because it has very defined meaning in
    the way the Department talks about procurement money versus
    RDT&E and so forth. Because the Congress has allowed us to use
    research and development money, we're able to do very modest
    procurement or fielding of these types of equipment in the
    beginning. Now, one of the problems we have with the Missile
    Defense in general, is trying to fit it into the mold that the
    Department uses, in that typically we posture a force
    structure. For instance, we might say that there's a need for
    100 or 200 or 300 ground-based interceptors. And we would go
    and we'd fund those, fully fund them in a procurement account
    and we'd have a major growth in the overall process. We're not
    doing that, primarily because it is not clear what mix of
    interceptors we're going to ultimately need for the threats
    that we're going to face. So it is a non-standard approach.
    We're taking it a step at a time. Somewhere in the neighborhood
    of $1 to $2 billion a year right now is programmed to actually
    field equipment out of the RDT&E effort and make it better over
    time, and then when we reach a point where we reach clarity
    with the threat and how many pieces of the system we need,
    we'll go ahead and transition to the normal mode. That's the
    plan that we have.

                             HIGH ALTITUDE AIRSHIP

        Senator Burns. There was another part of what you're doing
    that sort of caught my attention too, and that's high altitude
    airship. I can't help but think that this, if successful, they
    call it the Airship Advanced Concept Technology Demonstration,
    you cut back a little bit on its funding but I happen to think
    that, you know, when we started to talk about space and
    shuttles and we started talking about reuseables and unmanned
    reuseables, I think this program has application, both military
    and commercial, in the civilian end of the world. Is this
    program adequately funded, do you think, to move forward with
    this new technology?
        General Kadish. Senator Burns, I share your desire for this
    type of program because I believe it could be a more affordable
    approach for persistent high altitude and not go to space in
    some cases. I believe it is adequately funded because there are
    big risks in making an airship of this nature to fly at the
    altitudes that we're talking about. So, the program's
    structured to actually reduce those risks by demonstrating we
    can do this initially, and if we can demonstrate we're doing it
    then I wouldn't hesitate to come to you and ask for money to go
    ahead and take it to the full production of those types of
    systems. It's so revolutionary that it could be a major change.
        Senator Burns. It sure is, and I think it has spillover
    into our fuels and the kind of composites and different
    materials that we'll need. It affords a lot of possibilities
    for commercial application as well.
        General Kadish. It certainly does.
        Senator Burns. Thank you, Mr. Chairman.
        Senator Stevens. Senator Cochran.

                           BMD FIELDING ACCELERATION

        Senator Cochran. Mr. Chairman, thank you. General Kadish, I
    understand that your plans for fielding the Ballistic Missile
    Defense capability later this year are proceeding and that
    eight of the planned 20 ground-based interceptors will be
    available for initial defense operations later this year. Can
    you give us some specific current time line expectations for
    this program and whether or not we can help accelerate that
    with additional funding in your budget request?
        General Kadish. Senator, about 1\1/2\ weeks ago we went to
    Huntsville and did what we call 180-day review; 180 days to our
    planned internal MDA dates that we're using for September. And
    I came away from that review very encouraged that we were
    within 30 to 60 days of those schedules right now, and more on
    the on-time than not being on-time. It's still a major
    challenge for us over the next 6 months to do this but right
    now what I see is that we will, in fact, have up to 8 ground-
    based interceptors by the end of this calendar year and 12 the
    following year, available for alert capability. As far as
    accelerating anything, I think we set a few years ago the
    schedule and we've actually been meeting it fairly well. So I
    don't see over the next 6 months or even the next 12 months
    that we're going to be able to accelerate anything over and
    above the schedules that we have. I think the major success
    criteria that I'm using is to do it on time, in the process,
    and as quickly as we set up the schedules a few years ago,
    because it was a major challenge to accomplish it. So as much
    as it pains me to say this, but I don't think extra money will
    accelerate the process. It would help us in other areas but not
    necessarily in acceleration.
        Senator Cochran. One of the important----
        General Kadish. And I would not recommend trying to
    accelerate.

       SPACE BASED SENSORS--SPACE TRACKING AND SURVEILLANCE SYSTEM (STSS)

        Senator Cochran. Right. One of the important elements in
    our Missile Defense System is space-based sensors, terrestrial
    sensors. In your statement you mention assembling and
    integrating two space tracking and surveillance system
    satellites, and I understand that these could be launched in
    tandem in 2007. What is your view of where this program is
    headed and how will it contribute to an effective Ballistic
    Missile Defense?
        General Kadish. The space tracking and surveillance system
    is what we used to call SBRS-Low, and we changed the name
    because we got confused with SBRS-High, which was a different
    program, among other things. But the way this would contribute
    is it would provide a low Earth-orbiting set of satellites to
    continuously watch for missile launches and once they're
    launched, track it through the entire phase of flight. If we
    could do that then our ability to engage those ballistic
    missiles and warheads and destroy them would be greatly
    enhanced. I'd like to point out that over the years this
    program has morphed into different aspects and I think the last
    count was that we had 85 separate studies on whether or not to
    do STSS-like constellations or not. And what we decided to do
    was to, rather than do another study, was to put two satellites
    in orbit, get the data that we need to confirm whether or not
    we're going to be able to make this work as we intended, and
    then make a decision subsequent to that on whether or not we'll
    recommend the full constellation of these satellites. We're on
    track to do just that. And the tandem launch in 2007, the
    program activity we have to do that, is on schedule and on
    budget and doing very well.
        Senator Cochran. Is there any particular risk or high risk
    associated with the tandem launch?
        General Kadish. Well, I wouldn't normally like to do a
    tandem launch of this type but it is the most efficient use of
    money and what we found is that if we launched them separately
    and then we lost one satellite we wouldn't be able to do the
    mission anyway. Because these are stereo-viewing satellites;
    you need two of them to accomplish this. So we figured that the
    tandem launch was the best balance of risk and benefit.
        Senator Cochran. Mr. Chairman, I have several other
    questions. I think my time may be expired and I'll reserve my
    other questions for later in the round.
        Senator Stevens. Senator Feinstein.

                               PREPARED STATEMENT

        Senator Feinstein. Thanks very much, Mr. Chairman. Welcome,
    General. I know you're under the weather and I don't want to
    aggravate your condition, so if I could submit my statement for
    the record I will confine my questions.
        [The statement follows:]

                 Prepared Statement of Senator Dianne Feinstein

        I believe National Missile Defense is one of the key
    foreign policy and national security issues that we will face
    in the coming decades. The Administration's decisions on this
    issue should be made in a deliberate and thoughtful manner and
    in close consultation with our allies, and, most importantly,
    the United States Congress.
        Previously, I have stated that my concerns about NMD
    revolve largely around four issues: the nature of the threat;
    the implications for arms control and the international
    security environment; the feasibility of the technology; and
    the cost.
        Given the high cost and the still uncertain and untested
    technology, I found it surprising that President Bush has
    declared his intention to deploy a nation-wide missile defense
    this year. Given our mounting budget deficit, the threats to
    United States national security interests around the world and
    the numerous problems facing our military such as aging
    helicopters, aircraft with high accident rates, and a lack of
    bullet proof vests, the Administration's decision to seek $10.2
    billion for a largely untested and unproven missile defense
    program raises serious concerns.
        While we no longer fear the threat of all-out nuclear war,
    the likelihood that America will be attacked with a nuclear,
    chemical, or biological weapon has increased. The proliferation
    of weapons of mass destruction, and the increasing availability
    to other nations as well as transnational groups such as
    terrorist organizations, to the technology and material
    necessary to develop and deliver WMD is perhaps the most
    serious threat to U.S. national security today.
        We need to spend our resources wisely to make sure that we
    can protect our nation from these threats. But the odds that
    terrorists or non-state actors will use ballistics missiles to
    attack the United States in this manner remains, in my
    estimation, relatively low. Missile defense would have done
    nothing to stop 9/11. And missile defense would do nothing to
    stop a bomb smuggled into this country on a container ship or
    through another ``soft'' point of entry.
        National Missile Defense is not and should not be seen as a
    one-size-fits-all substitute for an effective non-proliferation
    strategy. The United States must have a balanced program to
    effectively safeguard our interests and clearly calibrate and
    allocate resources to meet the real challenges that face U.S.
    national security interests including providing for effective
    strategies for non-proliferation activities, deterrence,
    homeland defense, and counter-proliferation.
        I believe it would be folly and far too costly to place too
    much of an emphasis on missile defense and to unilaterally
    develop and deploy NMD before we even know what defensive
    systems are feasible. And likewise I am greatly concerned that
    even as we spend large sums on missile defense, we are not
    doing enough to make sure that resources are allocated to such
    areas as port security. We simply cannot afford to gamble with
    a national security strategy based on cultivating a missile
    defense system of unknown effectiveness on one hand with a less
    stable and less secure world on the other.

                SYSTEM READINESS AND A RUSH TO DEPLOYMENT--WHY?

        Senator Feinstein. I am still puzzled, well, I was puzzled
    last year and I'm still puzzled this year by the rush to deploy
    this system. In March, on the 11th, Senator Jack Reed asked
    this question. At this time we cannot be sure that the actual
    system would work against a real North Korean missile threat.
    And Tom Christie, the director of the Pentagon's Office of
    Operational Tests and Evaluation, replied, I would say that's
    true. There are enormous technical difficulties with
    deployment. The booster rocket has suffered problems; the
    ground-based X-band radar, needed to enhance satellite
    tracking, isn't scheduled to be fielded anytime soon; the sea-
    based X-band radar is not scheduled to be fielded until 2005;
    the infrared satellite system, which discriminates warheads
    from decoys and helps guide the interceptor won't be in place
    for many years, and the system can't deal with decoys and
    countermeasures, as I understand the reports. And yet it's
    going to be deployed. My question is why?
        General Kadish. Senator Feinstein, I guess I'd like to go
    back and address specifically those things that you pointed out
    as being apparent deficiencies.
        Senator Feinstein. Good.
        General Kadish. And I use the word ``apparent'' because I'm
    not sure that we have the right description of the problems
    that we're facing. When we say we cannot be sure that we would
    be able to destroy the warheads, I don't think in any of the
    procurements that I've done in the DOD that were 100 percent
    sure of anything. So if 100 percent sure is the standard we're
    not going to meet it so we might as well stipulate that at the
    beginning. However, where we do not have missile defense
    capability today against long-range missiles and that's been
    for 40 years or more now, if we have greater than zero chance,
    and I mean substantially greater than zero, I'm not going to
    tell you exactly what we think it is right now.
        Senator Feinstein. Is it over 50 percent?
        General Kadish. I think that--I'd rather not get into the
    percentage but we have very high odds of engaging and
    successfully destroying the threats that we think we're going
    after right now.
        Now, in the case of the booster and the kill-vehicles and
    the technical challenges, I think you're absolutely right. I
    mean, 4 years ago, almost 5 now, I began testifying in front of
    this committee saying that fiscal year 2005 was the earliest we
    were going to be able to do anything along these lines. And I
    think that has turned out to be true right now. So it's not
    like we, over the last year or two or three this is a rush to a
    particular effort. When we were doing the old National Missile
    Defense (NMD) program, we were saying that fiscal year 2005 was
    probably the earliest, with some risk. We have reduced that
    risk tremendously and we believe we're going to make fiscal
    year 2005 in the process.
        Now, we set internal dates, September that you hear about
    from time to time, but those are MDA dates, they're not
    mandated or dates ascertained by the Department of Defense. So,
    we believe that the sensors that we have on orbit today, the
    Defense Support Program, the radars that we intend with Cobra
    Dane and Fylingdales and then the addition of the X-band radar
    later on will give us the sensors we need. The booster, the
    kill vehicle, they're coming along and we should be flight
    testing them over the next few months to prove out our modeling
    and simulation.
        So, things are going all in the right direction. And I
    guess the best way to characterize the effort, in terms of its
    performance, may sound a little trite, but if someone shoots at
    us we're going to be able to shoot back, whereas we couldn't do
    that today.
        Senator Feinstein. Even if we don't hit anything?
        General Kadish. There's a good chance we're going to hit it
    and we can come talk to you about that in some detail and more
    classified setting. And if I was on the other side right now
    I'd be very worried whether or not the systems that they are
    producing would work against our system. And we're going to
    only make it better after that. The idea that the radar comes
    in in 2005, we've got other plans for further activities as we
    test and make it better that, over time, the countermeasure
    issues and the things that we're dealing with, we're going to
    be very good at.

                          COST JUSTIFICATION OF A BMDS

        Senator Feinstein. One last question. Because you've been
    very straight with us and I really appreciate that. I think
    you're really a class act. I just want you to know that. I
    mean, this is so much money, $10.2 billion a year for what, 7
    years? That's a lot of money to deploy a system that really
    hasn't been really tested in its complete form and at a time
    when our best case for war is asymmetric and non-State and not
    likely to be waged with Intercontinental Ballistic Missile
    (ICBMs) but with something coming in in a container. Do you
    really think, in view of what the next 10 years looks like,
    that a ballistic missile system is the best way to spend our
    money in terms of guaranteeing the safety of our people?
        General Kadish. Well, I can give you a personal opinion on
    that issue; it has two parts to it. The first is that, from
    where I've sat for a number of years, it is a very difficult
    job to know what's likely and unlikely and what our adversaries
    are going to do to defeat us. And we make those judgements but
    we've got to do it with the idea that there's risk involved.
    And I had the unfortunate experience on September 11, sitting
    in my office in the Missile Defense Agency, watching the
    Pentagon burn as a result of the airlines. And, you know, I
    know there's a big debate over whether folks could have
    anticipated that or not, but the likelihood equations of one
    thing over another is a very risky business for us to determine
    in the Missile Defense Agency. But there's one thing I do know,
    and that is we have no missile defense capability except for
    Patriot today against short-range missiles. And that didn't
    happen except with the support of this committee for many
    years, and we struggled with that effort. We had some failures;
    it was a difficult technology but it worked very well in the
    last war. And we're building up. And I believe that the same
    will occur with the systems that we're talking about at Fort
    Greely and Vandenberg, Aegis and THAAD and the ones that we're
    building. Because that $10 billion is not only for the ground-
    based program effort at Fort Greely and Vandenberg this year,
    it's for airborne laser, the THAAD program, the Aegis program
    and the radars that support all that. So it's very expensive
    but it's also very comprehensive and complex.
        I don't know if that helped in terms of the answer but it's
    a tough business for us to say, in the missile defense business
    anyway, that we ought to choose to leave ourselves vulnerable
    to missiles anymore now that we can do something about it.
        Senator Feinstein. Thanks, General. And I'd appreciate that
    briefing. Thank you very much.
        General Kadish. Thank you.
        Senator Feinstein. Thank you, Mr. Chairman.
        Senator Stevens. Senator Dorgan.

                  DEVELOPMENT OF BMDS WITHOUT ADEQUATE TESTING

        Senator Dorgan. Mr. Chairman, thank you very much. I share
    some of the same concerns expressed by my colleague from
    California. Most of the significant new weapons programs that
    we've been discussing with the Department of Defense I support.
    I think they are important for this country and for its
    defense. But the Senator from California asked questions that I
    think need to be asked. Are we rushing to deploy a system that
    has not been adequately tested, that has not been subject to
    the same rigorous testing strategies that other weapons
    programs have been required to meet? And, you know, there's so
    much, with respect to the more urgent, immediate threats that
    we know exist, there is so much as yet undone because we can't
    afford it. The question I think the Senator from California
    poses is in the rear view mirror of 5 years, will we look back
    and say we would have better used that $10 plus billion in
    another area for a more urgent threat? I think the answer
    probably will be yes, but none of us know for sure.
        Let me ask the question. You talked about the booster and
    the kill vehicle and in answer to the question posed by my
    colleague from California, no one can be 100 percent sure. I
    understand that and no one is asking, with respect to any of
    these systems, that we are 100 percent sure. But will this
    system be deployed without the same kind of rigorous testing
    that is applied to other systems? Because we are rushing here
    to deploy it, as you know.

                               CONCURRENT TESTING

        General Kadish. Well Senator Dorgan, I guess I would
    characterize what we're trying to do here as not a rush to
    deployment. What it is is building the system so we can test it
    in its operational configuration and since we've done that it
    has the capability to defend the country so we will use it in
    that role simultaneously, or concurrently. So one of the things
    I have to point out, and I have a very hard time explaining
    this because it gets to be very technical in terms of the rules
    that we use within the Department, but let me try it this way.
    When we do operational testing, what that means is we want the
    people who are going to use it to push the buttons and do all
    the things that we need to do so that in an operational
    environment, day to day, we can be sure it works. And you might
    want to ask the question, well, why do we do that? Well, 99
    percent of the time we do that because we're replacing another
    system, and what we want to do is make sure good management
    practice is that what we're replacing, the system that we're
    replacing something with can work better or at least as good
    as, in the operational environment, after having spent a lot of
    money. So these things usually occur after a very long
    development cycle. We do an operational test, we check some
    boxes, make sure that things work better than what we have in
    the field and we move on. In the case of missile defense, we
    don't have a system in the field today against long-range
    missiles. So we have to build it in order to test it in its
    operational configuration. We get criticized a lot about not
    having the radars in the right spot and that type of thing. I
    can go on at length, but the simple answer to that is we need
    to build it to test it in its operational configuration and
    therefore we can actually use it as well.
        Senator Dorgan. Well, building it and deploying are
    different circumstances, but General Kadish, the only anti-
    ballistic missile program that has ever been deployed was
    deployed in my State back in the early 1970s and was moth
    balled almost immediately, I believe within 30 days after being
    declared operational, for a number of reasons.

                          RUSH TO DEPLOY OR POSTPONE?

        But I have received a letter that was sent around on this
    program from 49 generals and admirals who call for postponing
    missile defense. They say the Pentagon has waived the
    operational testing requirements essential to determine whether
    the highly complex system is effective and suitable, and they
    make the case that this money, the billions of dollars, should
    be spent on other defensive systems, which are more urgent.
        If I might just make the case, I think there is a threat of
    nuclear weapons against this country. I think the least likely
    threat, by the way, is from an intercontinental ballistic
    missile. Perhaps the most likely threat is from a suitcase
    nuclear weapon in a rusty car on a dock in New York City. But
    if you take the threat meter, which many of us have seen,
    regarding what are the likely threats against this country, the
    threat of a nuclear-tipped intercontinental ballistic missile
    is perhaps the least likely of those threats. It would be
    deadly, were we attacked by someone with such a weapon. But
    such an attack is deterred because we, of course, know the
    return address of the missile, and whoever attacks us will be
    vaporized quickly. I mean, I think the question that the
    Senator from California asked is a critical one; is this the
    most urgent defensive system for which we should be spending
    $10 billion at this point, and I don't think any of us know the
    answer to this. My own impression, I just might say, is that we
    are rushing to deploy a system that is costing a great deal of
    money and one which we do not know whether it will work. And
    I'm concerned about that because there are so many other things
    as yet undone.
        Let me add, however, my compliments to your service,
    General Kadish. I've been in briefings that you've been
    involved in for many years; you served this country with great
    distinction. I know you care about this program and nurture
    this program with great skill and professionalism; I want to
    say that and thank you very much, General, for your service.
        General Kadish. Thank you, Senator Dorgan.
        Senator Stevens. General, are we about ready to wind this
    up?
        General Kadish. I'm fine, Senator.
        Senator Stevens. Are you? All right.
        I will submit my questions.
        Senator, do you have any further questions?
        Senator Shelby. Let me be brief if I can. I know we need to
    let General Kadish go.
        General Kadish. Yes sir.

                  SYSTEM TEST AND EVALUATION PLANNING ANALYSIS

        Senator Shelby. General, you might want to answer these
    questions for the record, that would be fine. That is, I've
    been impressed with the systems test and evaluation planning
    analysis lab. How will system-integrated flight testing help
    meet the architecture integration challenge in the future? How
    rigorous will this testing be? Do you want to answer that for
    the record?
        General Kadish. It will become more and more rigorous,
    without a doubt. I think that if we--I'd like to take the
    specifics of the systems tests analysis lab for the record.
        Senator Shelby. Absolutely.
        [The information follows:]

        The System Test and Evaluation Planning Analysis Lab
    (STEPAL) is the Missile Defense Agency's choice for in-depth
    analyses and credible flight test planning. We currently use
    STEPAL resources to perform vigorous pre-mission analysis that
    includes supportability, evaluation of test requirements,
    flight safety, and other factors necessary for the successful
    execution of integrated Ballistic Missile Defense System (BMDS)
    test scenarios. The support provided by the STEPAL has provided
    MDA with a quick look capability that allows us to observe
    additional important mission aspects such as safety, debris
    effects; telemetry coverage; as well as the adequacy of test
    range assets.

        General Kadish. But I'd like to point out that because
    we're able to build it like we are, calendar year 2005 is going
    to be a very, very interesting year in missile defense from a
    test standpoint because we'll be able to do an awful lot of
    flight testing and ground testing that we haven't been able to
    do before.

      SCIENTIFIC, ENGINEERING AND TECHNICAL ASSISTANCE (SETA) CONTRACTORS

        Senator Shelby. General, for the record, would you give us
    your views on the importance of SETA contractor support and how
    valuable their contributions have been to MDA?
        General Kadish. The SETA contractors, the support
    engineering? It's been invaluable to MDA from across the
    country, especially from the State of Alabama and Huntsville,
    which is a major center for missile defense. But we couldn't do
    it without the talented people that we have across the country,
    especially the SETA contractors, the prime industrial partners
    and the Federally Funded Research and Development Center
    (FFRDCs) and folks.
        Senator Shelby. You made some cuts there. Is that wise? I
    know you're constrained by your budget from time to time. Will
    you address that some?
        General Kadish. Well, what we've been doing is trying to
    balance out the skills that we need at any given time. And that
    can look like a cut in certain areas but basically we're trying
    to balance the skills that we need in the process.

                          ADVANCED TECHNOLOGY FUNDING

        Senator Shelby. General, advanced technology funding; I
    think you've got to invest for the future. You know, some
    people, and I at times ask about money, and we're spending a
    lot of money but if we don't spend for the future we'll be
    shortchanged, I believe. Development funding for sensor
    improvement, better software, faster communication systems,
    improved propulsion systems, lighter and strong structures,
    better thermal control, enhanced signature discrimination,
    decoy concepts and detection techniques are vital to all of us
    and for this program. Does MDA have an adequate technology
    development budget to support spiral development here or will
    you need more money?
        General Kadish. Well, I think that we can get the specifics
    for you for the record but overall I'm satisfied with where we
    are on the deep technology activities. Because when I look at
    what's happening in the THAAD program and the GMD program and
    the other efforts that we have, we're doing an awful lot of
    that work in the application of technology right now. And it's
    a tough balance but I think the balance is right, right now.

         SPACE AND MISSILE DEFENSE COMMAND (SMDC) AND MDA RELATIONSHIP

        Senator Shelby. General, lastly, I'm just going to touch on
    the relationship between SMDC and MDA. You can do this for the
    record. What are your thoughts on this relationship and the
    importance of SMDC to supporting MDA's mission?
        General Kadish. I can expand for the record but the bottom
    line, Senator, is that it's a great relationship now, and we
    have people working together on some very tough problems.
        [The information follows:]

        The relationship between MDA and SMDC is strong. The
    success of my organization is dependent on the technology
    support that SMDC provides. As the Army's proponent for the
    Ground-based Midcourse Defense (GMD) System and operational
    integrator for global missile defense, the Army's Space and
    Missile Defense Command (SMDC) plays a key role in supporting
    MDA to develop, field, and test a fully integrated and
    operational Ballistic Missile Defense System (BMDS) capability
    for the nation. SMDC is a strong and effective advocate for
    global missile defense and works closely with MDA to ensure our
    national goals of developing, testing and deploying an
    integrated missile defense system are met. SMDC conducts
    research and develops and matures new and emerging technologies
    to enable missile defense capabilities. SMDC's Reagan Test
    Facility on Kwajalein Atoll supports missile defense testing.
    SMDC participates in deploying and operating the GMD System,
    including oversight of GMD Brigade and subordinate GMD
    Battalion operations. SMDC also works closely with MDA to focus
    attention on improving Theater Air and Missile Defense (TAMD)
    Systems. The long legacy and continuing research and
    development by SMDC in the missile defense arena has made
    possible the recently fielded missile defense systems and will
    provide the means for future enhancements and new weapon
    systems.

        Senator Shelby. Thank you. Mr. Chairman, thank you for your
    indulgence. General, I hope you feel a little better today.
        General Kadish. Thank you, Senator.
        Senator Stevens. Mr. Cochran.
        Senator Cochran. Mr. Chairman, I have other questions that
    I'll be happy to submit, particularly one relating to the
    capability for Aegis destroyers and cruisers to play an active
    role in missile defense and what your plans are for
    coordinating the operations with the Navy and helping to offset
    costs associated with these modifications and other questions
    as well. I'd be happy to submit those, Mr. Chairman, and
    express our appreciation for the continued good work of General
    Kadish.
        Senator Stevens. General, I think that Senator Inouye and I
    have been privileged to spend probably more time with you than
    other members of this committee and we thank you for the time
    you've spent with us to keep us posted on the developments. I
    have a series of questions that I would like to send to you for
    the record.
        Senator Shelby. Mr. Chairman, could I just mention, we have
    a Major General sitting behind General Kadish, General Obering,
    here today, and I think we'll probably see more of him in the
    future, will we not, General Kadish?
        General Kadish. Yes sir, he's been nominated to the Senate
    to replace me and he's a great guy.
        Senator Shelby. And Mr. Chairman, he's from Birmingham,
    Alabama, it just happened to happen that way.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Stevens. Well, since he wasn't from Alaska I didn't
    introduce him but I knew he was there. Thank you.
        [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 Ted Stevens

                      GROUND-BASED MISSILE DEFENSE PROGRAM

        Question. General Kadish, can you assure the Committee that the
    Missile Defense Agency will continue to improve the ground-based
    missile defense system? I am concerned about technical obsolescence of
    the program--technology will continue to move forward--how will you
    deal with this?
        Answer. The Ground-Based Midcourse Defense (GMD) program will
    continue to improve well beyond the Initial Defense Capability that is
    being fielded this year. We are planning upgrades to the current
    system, and our upcoming budget submissions will include funding for
    these upgrades. For example, the processor on the Exoatmospheric Kill
    Vehicle (EKV) will be upgraded to avoid obsolescence. This upgrade will
    be ready to be included in Ground Based Interceptors that are scheduled
    for fielding in the 2006-2007 timeframe. We are also planning upgrades
    to the GMD Fire Control (GFC) system as additional sensors are fielded.
    We have several programs to develop software upgrades to provide more
    advanced discrimination capability, and our testing will become
    increasingly more challenging to validate our progress in this area.
        Question. Once this program is fully fielded in Alaska and at
    Vanderburg Air Force Base over the next several years, how will you use
    the concepts of spiral development and block upgrades to improve the
    program five years from now?
        Answer. The program for spiral upgrades to the GMD components of
    the Initial Defensive Capability include an enhanced EKV (an upgrade to
    the processor), additional GMD Fire Control capability as a result of
    additional sensor capability such as the Sea-Based X-Band Radar (SBX),
    a program to mitigate potential countermeasures, multi-sensor fusion
    improvements, and advanced discrimination capabilities. All of these
    efforts are currently programmed within the FYDP.

                             AIRBORNE LASER PROGRAM

        Question. General Kadish, the airborne laser program was
    restructured earlier this year. Please explain some of the progress
    that has been made on this program and some of the remaining
    technological challenges?
        Answer. The Airborne Laser (ABL) program has made significant
    technical progress to date. We have successfully modified and conducted
    initial flight-testing of the Boeing 747-400F which will accommodate
    the lasers and optical control systems. We have completed the
    manufacturing, optical coating, and end-to-end testing of the beam
    control system and have begun integration of this system into the
    aircraft. The six-module high power laser has been fully installed in
    the System Integration Laboratory (SIL) at Edwards AFB and is currently
    undergoing initial testing. Finally, we have successfully demonstrated
    our capability to safely mix and handle the chemical laser fuel and we
    are making steady progress towards the first firing of the high power
    laser.
        The program was restructured to improve the focus on two near term
    efforts that will give us a better indication of the ABL's viability:
    (1) first flight of the beam control system during late 4th qtr CY 2004
    and (2) first light of the six-module high power laser in the Systems
    Integration Laboratory (SIL), during December 2004.
        Apart from these two milestones, there are a few other remaining
    technological objectives for the ABL program, to include integration of
    the turret ball on the front of the aircraft, integration of the target
    acquisition/tracking lasers onboard, and finally demonstration of the
    entire system with the shoot down of a ballistic missile. These
    technological objectives are significant, but at present we do not
    foresee any showstoppers.
        Question. I note that the 2005 budget reflects this restructuring.
    Are you concerned about losing momentum in the program and that we have
    a clear way ahead on directed energy programs?
        Answer. It is true that the technical challenges we are working to
    resolve have delayed fielding the first ABL aircraft and that the
    restructure has delayed acquisition of the second aircraft. However, we
    will maintain program momentum by resolving the pacing technical
    challenges and achieving laser ``first light.'' The record of technical
    achievement by ABL is cause for confidence that we will solve these
    challenges. Only decreased funding could cause a loss of momentum at
    this time. Funding stability will be critical for resolving the
    remaining technical challenges and moving forward with fielding this
    capability.

                     FORT GREELY MISSILE DEFENSE FACILITIES

        Question. General Kadish, could you explain the importance of the
    2005 budget request to the ground-based midcourse system? What would be
    the consequences to the Fort Greely program and the overall system
    effectiveness if this funding is not provided?
        Answer. Fiscal year 2005 funding is essential to continue
    development of the Ground-based Midcourse Defense (GMD) capability and
    to put the Ballistic Missile Defense System on alert. Decreased funding
    would impact development and procurement of hardware necessary for the
    GMD element of the Ballistic Missile Defense System, including
    procurement of additional ground-based interceptors (GBIs), the Sea-
    Based X-Band radar (SBX), and upgrades to existing Early Warning
    Radars. Testing of new systems would be impacted. A funding decrease
    could cause a break in production and cause distress in the industrial
    base, potentially forcing the smaller vendors out of business. The time
    and cost to develop and qualify a new vendor base would be prohibitive.
        Decreased fiscal year 2005 funds would also impact our ability to
    sustain the Initial Defensive Capability. Included in the fiscal year
    2005 budget is funding for the Sustainment Development Program. The
    Sustainment Development Program pays for spares and technical support
    from the GMD prime contractor. Without this effort the existing GMD
    hardware cannot be maintained.
        Question. Please provide us a status report on how the construction
    at Fort Greely is proceeding?
        Answer. The following is a look at some of the wide variety of GMD
    facilities at Fort Greely that will support IDO, and their status for
    alert.
      --Six Fort Greely silos complete;
      --Alaska fiber optic ring complete;
      --Battalion Fire Control Node at Fort Greely: tested satisfactorily;
      --SATCOM links (nine total): tested satisfactorily;
      --Fort Greely In-Flight Interceptor Communications System (IFICS)
            Data Terminal (IDT) complete and tested satisfactorily;
      --Fort Greely buildings: 10 complete; five on schedule; one behind
            schedule (no impact).
        Question. Are there any significant issues as you deploy an initial
    operating missile defense capability later this year?
        Answer. There are no significant issues, but challenges remain. Our
    schedule to begin Initial Defensive Operations is aggressive and
    depends on many interdependent activities proceeding as expected. We
    are attempting to remain as agile as possible to account for unforeseen
    events. Additionally, the outcome our flight tests this year will be
    important. Overall, however, we expect to remain on schedule.
                                     ______

                  Questions Submitted by Senator Thad Cochran

        Question. General, I understand Aegis destroyers and cruisers will
    play a key role in the missile defense of the United States and our
    allies. Could you summarize the capability to be fielded by the Navy
    and tell us how you coordinate operations with the Navy and help offset
    their costs?
        Answer. The Aegis BMD element of the Ballistic Missile Defense
    System (BMDS) builds upon the mature, operationally-proven, globally
    deployed Aegis Combat System (ACS) to detect, track, intercept, and
    destroy Short Range Ballistic Missiles (SRBMs) to Intermediate Range
    Ballistic Missiles (IRBMs) in the midcourse (spanning ascent to early
    terminal) phase of flight while deployed in defense of the nation,
    deployed U.S. forces, friends, and allies.
        The heart of the Aegis BMD system is the Aegis Weapon System (AWS),
    including the AN/SPY-1 radar. The AWS detects, tracks, and identifies
    the ballistic missile target, and guides the SM-3 close enough to the
    target for the SM-3's Kinetic Warhead (KW) to close for intercept. The
    KW tracks the target with its Long Wavelength Infrared seeker and uses
    its propulsion system to divert to complete a hit-to-kill intercept. A
    total of three Aegis Cruisers (CGs) and 15 Aegis Destroyers (DDGs) will
    be Aegis BMD capable by the end of CY 2006.
        Aegis BMD will evolve through spirally developed block improvements
    as part of the MDA's block upgrade strategy. Block 2004 will be a
    spiral development, with the Initial Defensive Capability (IDC) (Aegis
    BMD 3.0E) completed, verified, and tested for Initial Defensive
    Operations (IDO). This capability will provide long-range surveillance,
    detection, and tracking of long range ballistic missiles in support of
    the BMDS. It will be fielded initially on two Aegis destroyers by
    September 30, 2004, quickly expanding to four DDGs before the end of
    calendar year 2004.
        The test bed version of the engagement capability (Aegis BMD 3.0
    plus SM-3 Block I) will be available for ship installation by December
    2004 and flight tested in early CY 2005. This capability is not
    intended for operational employment, but could be available for
    emergency use. There will be five SM-3 Block I missiles available by
    December 2004 and BMD 3.0 will be installed on two Cruisers in CY 2005.
        The final Block 2004 capability (Aegis BMD 3.1 plus SM-3 Block IA)
    will be delivered in December 2005 and certified by April 2006 for
    Fleet use against SRBMs and MRBMs, as well as contingency to provide
    Long Range Surveillance and Track (LRS&T) data to the BMDS. This
    configuration also includes the integration of basic Anti-Air Warfare
    (AAW) self-defense that will be installed in three Cruisers and up to
    15 Destroyers by the end of Block 2006. Installation schedules are
    based on ship deployment and maintenance schedules
        The Aegis BMD element builds upon the existing Aegis Weapon System
    (AWS) and STANDARD Missile infrastructure already deployed in Aegis
    TICONDEROGA class Cruisers, ARLEIGH BURKE class Destroyers, and Japan's
    KONGO class Destroyers.
        MDA is funding the development, integration, and testing of Aegis
    BMD upgrades to the existing STANDARD Missile, AWS, and command and
    control systems. MDA funding also covers the cost of BMD specific ship
    equipment sets, initial installation, missile purchases, establishing
    integrated logistics support (ILS), including initial training and
    spare parts, and developmental flight tests. MDA continues technical
    and logistic support until six months after the delivery of the block,
    when sustaining funding responsibility transfers to the Navy, and MDA
    pursues the next block upgrade. The Navy pays for ship operations and
    support (O&S) costs and Manpower and Personnel (MPN) costs for the
    crews throughout development and operational phases.
        For developmental tests, Aegis BMD coordinates closely with
    Commander, Third Fleet (C3F) to assign ships to test events,
    particularly USS LAKE ERIE, the assigned BMDS test ship. C3F also
    provides Destroyers to participate in test events, as appropriate. MDA
    funds marginal costs for these test events, such as fuel.
        Operational employment of the ships in support of BMDS will be
    under the Commander, Pacific Fleet (CPF), in coordination with NORTHCOM
    and STRATCOM. CPF will fund the marginal costs for ship operations.
    This approach fully leverages the U.S. investment in the Aegis fleet to
    provide an affordable missile defense capability.
        Question. General, I see that you have requested funding for boost
    phase development for the Kinetic Energy Interceptor. With the next
    generation Navy Cruiser, the CG(X), in the early planning stages, I am
    interested to know what discussions you are having with the Navy for
    sea-basing options for this interceptor and what would be the fielding
    timeframe?
        Answer. The KEI program office commissioned the Navy to conduct a
    CONOPS study to determine what interim platforms are feasible for the
    KEI mission until the CG(X) is fielded. The results of the study may be
    available as soon as September 2004. The projected fielding timeframe
    for sea-based KEI is in Block 2012 on an interim platform. The Navy
    CG(X) will be ready for fielding around 2020. The Navy can provide more
    specific dates for the CG(X) fielding.
        Question. General, I understand that there is an industry proposal,
    supported by our Japanese allies, to develop a sea-based interceptor
    that would fit in existing Navy missile launchers. Given the
    Administration's desire to involve the international community in
    missile defense and the fact that this proposed missile would not
    involve modifying existing ships, what is your opinion of spiral
    developing the SM-3 missile to a 21 inch missile instead of using the
    36 inch Kinetic Energy Interceptor?
        Answer. The Missile Defense Agency (MDA) has initiated a
    comprehensive Joint Analysis with Japan to evaluate future ballistic
    missile defense options for the defense of Japan and the United States.
    This analysis will allow Japan and the United States to make informed
    decisions regarding the development, production, deployment and
    enhancement of interoperable missile defenses. Enhancements to the SM-3
    will be addressed as part of the Joint Analysis.
        Question. General Kadish, in your statement you indicate you have
    experienced some difficulties with the Airborne Laser as that system
    has moved from the drawing board to actual flyable hardware. For
    example, I have been informed the aircraft is somewhat heavier than had
    been hoped and that the testing of the system has faced numerous
    delays. Would you characterize the challenges you've encountered as
    something expected for a program of this sort or are they what some
    might call ``showstoppers?''
        Answer. The challenges we have faced to date are typical for a
    program of this nature, which is the first of its kind. However, we
    have encountered nothing to date, which we would categorize as a
    showstopper. In fact, you could say we have achieved some unique
    successes since beginning the development of the ABL to include work in
    the areas of chemical and solid-state lasers, precision optics, and
    even aircraft design and modification. Given the advanced nature of the
    technology we are using to produce the ABL, we have really made
    tremendous progress. Furthermore, I am confident that we can complete
    the remaining technical requirements in order to successfully
    demonstrate this system.
        Question. General Kadish, I understand the Terminal High Altitude
    Air Defense (THAAD) radar was completed ahead of schedule and delivered
    last month and the THAAD program is scheduled to have its first flight
    test late this year. However, I am told that it will not achieve
    operational capability for several years. General, how would you assess
    the program's risk at this point, and is there anything that can be
    done to move this program along a little faster?
        Answer. The overall program risk assessment for the THAAD program
    is moderate. For the first flight (December 2004), the missile
    component has moderate technical and schedule risks. For the first
    intercept (June 2005), the launcher component has moderate schedule
    risk. All risks will be retired by ground testing prior to first flight
    and intercept, with the exception of schedule risk for a production
    booster motor and thrust vector assembly source.
        The recent incidents at the boost motor supplier (Pratt & Whitney)
    have put enormous pressure on the fiscal year 2004/fiscal year 2005
    program. The additional cost to recover from these incidents and bring
    on an alternate boost motor supplier is projected to be $120 million
    through fiscal year 2007. This has resulted in a significant deferral
    of activities out of fiscal year 2004 into later years, with an
    immediate impact of $95 million in fiscal year 2005 ($45 million to
    recover the necessary deferred activities and $50 million for the boost
    motor supplier alternate source issues).
        The current THAAD program includes the first Fire Unit for which
    fabrication will begin in fiscal year 2007, with delivery for
    operational assessments and potential deployment scheduled for mid-
    fiscal year 2009. The Fire Unit cost is $483 million, with a current
    funding plan for Fielding based on $360 million in fiscal year 2007 and
    $123 million in fiscal year 2008. There are three options for
    accelerating the availability of this equipment.
        Option 1: To accelerate the Fire Unit by six months, the current
    approved $483 million for THAAD fielding would be required to start in
    fiscal year 2006 (vice fiscal year 2007). This includes $75 million in
    fiscal year 2006 for radar long lead items, with the additional $309
    million is fiscal year 2007, and $99 million in fiscal year 2008. This
    is a low risk option that moves the Fire Unit availability from mid-
    fiscal year 2009 to late-fiscal year 2008.
        Option 2: To accelerate the Fire Unit by 12 months, the current
    approved $483 million for THAAD fielding would be required to start in
    fiscal year 2006 (vice fiscal year 2007). This option would move the
    $360 million from fiscal year 2007 to fiscal year 2006 and the $123
    million in fiscal year 2008 to fiscal year 2007. This is a low risk
    option that moves the Fire Unit availability from fiscal year 2009 to
    fiscal year 2008.
        Option 3: To accelerate the Fire Unit by 18 months, the current
    approved $483 million for THAAD fielding would be required to start in
    fiscal year 2005 (vice fiscal year 2007). This includes $75 million for
    radar long lead items, with the additional $360 million in fiscal year
    2006, and $48 million in fiscal year 2007. This is a more aggressive
    option that increases risk and requires an early decision on the
    purchase of hardware prior to an intercept flight test. It moves the
    Fire Unit availability from fiscal year 2009 to fiscal year 2007.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye

        Question. General Kadish, the Missile Defense Agency plans include
    funding for 10 ground-based interceptors at a third missile site
    overseas. What is the benefit of having an additional site overseas,
    and what are the candidate countries that you are looking at to house
    this site? Do you expect that there will be international contributions
    for a third ground-based intercept site, or will the United States have
    to assume the entire bill?
        Answer. We have included funding in fiscal year 2005 for long-lead
    items for an additional 10 GBIs that could be deployed at a potential
    third site, or at Fort Greely. No determination has been made as to the
    actual location of this third site. In our analysis we have examined
    potential third sites in the United States as well as overseas. The
    benefit of an overseas site is that it provides additional protection
    to the United States as well as protection to our allies and friends.
    Several overseas regions, including Europe, are potential candidates
    for a GBI site from a performance perspective. There are, however, many
    other factors that would determine whether a particular site is viable.
    If a determination was made that an overseas site is desirable, in
    addition to the many domestic considerations, we would expect the
    nature of non-U.S. contributions to factor into a final decision.
        Question. General Kadish, your budget request includes nearly $80
    million for space-based weapons-related research and development. $68
    million of the request is for launching a short-range kill vehicle into
    space for the Near-Field Infrared (N-FIRE) program. What is the goal
    for the ``N-Fire'' program, and could you use alternatives to a kill
    vehicle in space to collect data for this program?
        Answer. The Near Field Infrared Experiment (NFIRE) is a major risk
    reduction project for the Kinetic Energy Interceptor (KEI) program. The
    primary NFIRE objectives are: Collection of near field rocket plume and
    rocket hardbody IR data for model validation and algorithm
    verification; and near term KEI kill vehicle development and testing
    (hardware and software).
        Yes there are other methods to collect IR data however NFIRE is the
    only method that will provide near field IR data.
        Aircraft observations using a variety of sensors allow us to
    collect IR data at aircraft altitude and speed, but do not provide the
    near field resolution we need because the distance to the target is
    typically 150-250Km. Range safety prohibits aircraft from getting
    closer than that.
        Sub orbital tests, simultaneously launching a one use sensor and a
    target, require both rockets to fly to the same point time in space.
    This approach is a one shot opportunity with a specific sensor.
        An orbital based test, like NFIRE, uses the highly predictable
    nature of a satellite to reduce the risk for both objects to arrive at
    the same point time in space. An orbital platform allows us to have
    multiple opportunities to collect near field data in various wavebands
    at a variety of engagement ranges and geometries.
        Question. I understand that the reason the kill vehicle portion of
    the Near-Field Infrared Experiment is not considered a space weapon is
    that it is restricted from moving forward or backward. How difficult is
    it to put this forward-backward movement back into the kill vehicle?
        Answer. Including an axial stage (forward-backward movement) was
    never part of the NFIRE kill vehicle. Consequently, to add an axial
    stage to the current NFIRE kill vehicle would require a redesign of all
    portions of the experiment (satellite, KV, launch vehicle, ground
    support). This redesign would be difficult, costly, negatively affect
    the schedule, and prevent our delivery of near field rocket plume and
    rocket hardbody IR data in time to reduce the risk to Block 10 KEI kill
    vehicle development.
        Adding an axial stage to the kill vehicle does not contribute to
    the primary NFIRE objectives: Collection of near field rocket plume and
    rocket hardbody IR data for model validation and algorithm
    verification; and near term KEI kill vehicle development and testing
    (hardware and software).

                              SUBCOMMITTEE RECESS

        Senator Stevens. But continuing on, we hope that you will
    feel free to keep in touch with us and be a Monday morning
    quarterback for us, and we invite you to return to our States
    and be treated as you should be, as one of our favorite people
    in military uniform, whether you're wearing the uniform or not.
    Thank you very much and thank you for continuing on under
    difficult circumstances, General. But since this is your last
    meeting here, let me again repeat what I said to you. We
    congratulate you and thank you on behalf of the people of the
    United States for your commitment to the system, and your
    willingness to spend the hours you have spent, long days away
    from your family, to make certain that it is the best system we
    can devise today. And I hope it will continue to improve with
    your guidance. Thank you very much, General.
        General Kadish. Thank you, Mr. Chairman.
        [Whereupon, at 10:55 a.m., Wednesday, April 21, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    April 28.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                           WEDNESDAY, APRIL 28, 2004

                                           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, Inouye, and Leahy.

                             DEPARTMENT OF DEFENSE

                                Medical Programs

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

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning. We are pleased to see you
    here this morning.
        We are going to have a hearing on the medical programs. Two
    panels are scheduled. First, we will hear from the Surgeon
    Generals, followed by the Chiefs of the Nursing Corps. We have
    joining us today from the Army Surgeon General, Jim Peake; from
    the Navy, Admiral Michael Cowan; from the Air Force, General
    George Taylor. We welcome you all back again.
        I understand this is your last appearance before the
    committee, General Peake.
        General Peake. Yes, sir.
        Senator Stevens. And Admiral Cowan.
        Admiral Cowan. Yes, sir.
        Senator Stevens. We do thank you for your service and
    assistance to this committee and value your views.
        This is a very difficult period for defense health
    programs, as we all know. The President's fiscal year 2005
    request for the defense health program is $17.6 billion, a 15
    percent increase over the fiscal year 2004 request. The request
    provides for the health care of 8.8 million beneficiaries and
    for the operation of 75 military hospitals, 461 military
    clinics.
        Despite the increase that is requested this year, this
    committee remains concerned that the funding may not be
    sufficient to meet all our requirements. We recognize that the
    continuing conflict in Iraq and the global war on terrorism,
    along with rising costs for prescription drugs and related
    medical services, will continue to strain the financial
    resources that are requested in this budget and place increased
    demands on our medical service programs and providers.
        Now, Senator Inouye and I are both personally familiar with
    the value of military medicine and have worked with your
    organizations for many years. We committed to work with you and
    to address the many challenges that you face.
        Let me take a moment to commend the Department's medical
    service personnel for their work in the global war on
    terrorism. Their performance has been nothing short of
    extraordinary. From the moment our soldiers, sailors, airmen,
    and marines go into harm's way military medics are deployed as
    part of the fight. We applaud their efforts and your efforts in
    serving jointly to meet the medical needs of our warfighters
    and their families, and we commend all of our witnesses here
    today for your leadership and compassion for those who serve.
        We have taken visits, as you know, to Walter Reed and to
    Bethesda and have been really honored to meet some of the young
    men and women that are there. I have got to tell you that
    almost every person said, ``Senator, can you help us go back to
    our unit.'' The morale of these people is just overwhelming and
    we are proud of them all.
        I want to yield to my co-chairman for his comments.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. I thank you very much, Mr. Chairman.
        I want to join you in welcoming our witnesses this morning
    as we review our Department of Defense (DOD) medical programs.
    Since this will be General Peake's and Admiral Cowan's last
    appearance before this committee, I would like to take this
    opportunity to thank them for their dedicated service to the
    military.
        Lieutenant General James Peake assumed command of the
    United States (U.S.) Army Medical Command in September 2000. In
    the years following, he oversaw 24,000 medical personnel
    deployed for overseas operations and an increased demand on
    military treatment facilities back home. He is the son of a
    medical service corps officer and a nurse, and your entire life
    has been in service to this Nation. Your time as an infantry
    officer gave you a unique warrior's perspective on how our
    wounded should be cared for, and it has helped to shape your
    vision for the Army medical department.
        Vice Admiral Cowan has served in the U.S. Navy for 32 years
    and as Surgeon General of the Navy and Chief, Bureau of
    Medicine and Surgery since August 2001. One could not have
    expected that just 1 month after taking that new
    responsibility, the military would be deployed at unprecedented
    levels and you would oversee the deployment of over 4,300 naval
    medical personnel. In addition to the extensive overseas
    operation, the Navy was also on the forefront of domestic
    events such as the lead laboratory for the recent ricin
    incident in the Senate.
        Admiral Cowan and General Peake, I commend and thank you
    for the service you have rendered to this country, and I am
    certain my colleagues all join me in this.
        Since the beginning of Operation Iraqi Freedom, I have
    heard numerous personal accounts and read dozens of articles
    indicating lifesaving changes made in medical deployments,
    technology, equipment, body armor, and unit configuration. From
    positioning surgeons closer to the front line than ever before
    and using new hemorrhage control dressings and embedding
    physical therapists in deployed units, decreasing the size of
    equipment, and aeromedical evacuation teams, they have
    drastically altered the fate of hundreds of lives. We will
    continue to support the personnel and programs that improve
    your capability to save lives.
        We will also look forward to an open discussion today 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, deployments of medical personnel, recruiting
    and retention, among others.
        Once again, I would like to thank the chairman for
    continuing to hold hearings on these issues which are so
    important to our military and their families.
        Mr. Chairman, you should forgive me. I think I need some
    help here. I have got a cold. Any cold medicine here?
        Senator Stevens. Is there a doctor in the house?
        Senator, do you have an opening statement?

                     STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Just very briefly, Mr. Chairman. I thank you
    for having the hearing. I would suggest to Senator Inouye what
    he needs is time in the sun and maybe a few days in--oh, I do
    not know--Hawaii?
        Senator Inouye. It is a good place.
        Senator Leahy. I wanted to come to this hearing because I
    am concerned about the adequate health care for our armed
    services, whether it is active duty or Reserves. I know
    everybody here is concerned.
        I have gone out and visited some of our wounded soldiers
    out at Walter Reed. It is one of the most moving and impressive
    things. My wife is a registered nurse and she probably
    understood better than I did some of the injuries of some of
    the people that she has talked with at greater length.
        One of the most impressive things, Senator Stevens and
    Senator Inouye, I remember one young man who was trying on a
    new prosthetic leg. He had lost his leg. He was trying on a
    prosthetic, high-tech leg, microchips. General, I see you
    shaking your head. You know exactly what I am talking about.
    Microchips check to see how best to design it. The two of us
    asked him, what are you going to do now? And he looked at us
    like, well, I just want to get the training with the leg done
    so I can go back to the service. And I thought what a
    wonderful, wonderful answer.
        Yesterday's Washington Post had a front page article, and
    if you have not read it, please do. It is a heartbreaking story
    about the devastating wounds our soldiers are suffering, and
    they are devastating. The good news is we can save more lives
    that I guess in other past combats we might not have been able
    to save them. The bad news, of course, is that they are
    horribly wounded, maimed, blinded, and things like this. I
    think what we have is a real responsibility because of that to
    do our best.
        That is all I have to say, Mr. Chairman. I do appreciate
    your having this hearing. I think it is an extremely important
    one.
        Senator Stevens. Well, we all know General Shinseki who was
    entitled to a full military discharge based upon his injuries
    and he continued in the service to become the Chief of Staff of
    the Army. So they have great examples from our past and we are
    pleased to be part of the process to help encourage them.
        Our first panel is General Peake. We call on you first.
        General Peake. Mr. Chairman, Senator Inouye, distinguished
    members, it really is an honor to represent Army medicine
    before you.
        Senator Stevens. We will put all your statements in full in
    the record.
        General Peake. Thank you, sir.
        It really is a unique time in our history. I reviewed the
    first testimony I gave before this committee in April 2001 I
    think it was, and we talked then about the new set of benefits
    that came out of NDA01, TRICARE for life, pharmacy benefit for
    over 65 retirees, reduction of catastrophic caps, school-age
    physicals, many other things, and we spoke about the need to
    adequately fund that benefit.
        But I also made mention then of the fundamental importance
    from a readiness base of medical support to soldiers that comes
    from our direct care system then, and I commented on the U.S.S.
    Cole response of wounded sailors passing through our joint
    system on their way back to Portsmouth back then. I also said
    that it was an exciting time to have this job. I had no idea.
        That hearing seems like a long time ago. Since then, your
    military medical system has responded to 9/11, was a key part
    of the response to the anthrax letters, played a major role of
    the cleanup right here on Capitol Hill. Our medics supported
    the take-down of the Taliban in Afghanistan. Forward surgical
    teams, linked with the special operations forces, combat
    support hospitals providing the only sophisticated level of
    care in that war-ravaged country, medics fighting uphill on
    treacherous terrain to save lives. Even the march to Baghdad
    now seems like a long time ago, a march where medical assets
    leap-frogged forward with the combat troops. One of our forward
    surgical teams set up nine different times in that march to
    Baghdad, integral to the fighting formations and operating on
    our own soldiers and Iraqi civilians and enemy prisoner of war
    (EPW's) as well.
        Army medical evacuation helicopter crews have sustained
    their legacy as heroes, serving Army and cross-attached to the
    marines. Our combat support hospitals operated in split-based
    modes, covering each sequential setup of the log bases as we
    moved forward. The front ends of that system linked back
    through Europe where our jointly staffed facility at Landstuhl
    in Germany has continued to be the primary hub for patients
    who, under our construct of essential care in theater, could
    find themselves there within 24 to 48 hours of wounding, linked
    back to centers of excellence like the amputee center that you
    mentioned here at Walter Reed or our burn center at Brook in
    San Antonio. All of these efforts supported by a base of an
    integrated health care system that trains to the highest
    standards, that inculturates our physicians and our nurses to
    the men and women that they support by a base of research that
    focuses on things relevant to the soldier so that we could
    field things like new skin protectants, hemostatic dressings,
    one-handed tourniquets. It is a base that can provide teams of
    world-class experts that go into country to look at things like
    Leishmaniasis or investigate pneumonia deaths or to study the
    mental health aspects of combat in an active combat zone.
        We are about to complete the largest troop movement since
    World War II. Across this country, each of our power projection
    platforms and power support platforms, our soldiers have had
    medical screening, have been medically protected with
    immunizations, received care when required as they martialed
    for deployment, have received post-deployment screening and
    reintegration training and care and counseling, a tremendous
    medical effort focused on our balance scorecard objective, a
    healthy and medically protected force.
        As a health system, our business has increased during this
    time not only with the soldiers I have described, but with
    family members of the deployed reservists and with the
    remarkable increase in our retirees who appreciate the quality
    of the benefit that has been legislated. I do believe the next
    generation of TRICARE contracts creates the correct incentives
    to maximize the use of our direct care system and ensure our
    contract partners meet the same high standards for those not
    around our military treatment facilities.
        But it is not a magic bullet to contain the cost growth of
    medicine, of which we are really a microcosm, especially with
    the increase in those using our system. It is a cost growth
    that is faster than the overall DOD budget growth, as you have
    recognized in the past with a history of supplementals.
        All of this at the same time that General Shinseki's legacy
    of transformation is being carried forward aggressively to make
    us more modular, agile, ready, and relevant to the challenges
    militarily of today and tomorrow.
        We are fortunate to have really great leaders in our Army
    from our Secretary, Mr. Brownlee, who is a soldier himself, to
    our Chief, General Schoomaker, whose focus on the soldier is
    extraordinary.
        But equally extraordinary are those soldiers. They inspire
    me and they inspire all of us who lead them at all levels. I am
    going to close with a couple of quotes from this last week in
    Iraq. I got this e-mail.
        Since Sunday evening, a little more than 72 hours ago, we
    have done almost 60 cases with essentially nonstop surgery. I
    am awed at the excellence and dedication of the soldiers in my
    command. They have truly done an incredible job, and I am proud
    to be associated with them. That is from Steve Hetz, who is the
    commander of the 31st Combat Support Hospital in Ballad, a
    soldier, a surgeon who ran our teaching program at William
    Beaumont Army Medical Center for many years.
        From Michael Oddie, a cardiac surgeon from Akron, Ohio, a
    reservist, a commander of the 848 Forward Surgical Team who is
    commanding the medical facility at the prison near Baghdad. He
    sent me a note after an attack that gave them 78 casualties, of
    which they air evacked 13, admitted 26, operated on 10 that
    night and the next day. He says, it was awesome and inspiring
    to see this group of soldiers perform so well and so cohesively
    in a dire situation. We really do have a great group of
    soldiers. This hospital commander stuff is as headache, but it
    is rewarding to see such an effort. It would have made you
    proud.

                               PREPARED STATEMENT

        Well, sir, I am proud and I am proud of them and I am proud
    to have been a part of this team at this table. On behalf of
    all of our soldiers and their families and the medics, I deeply
    appreciate the unwavering support that you and this committee
    have given us all. Thank you very much.
        Senator Stevens. Part of our group visited Ballad. It is a
    very interesting operation, an enormous base. Those facilities
    are well operated and obviously very modern.
        [The statement follows:]

            Prepared Statement of Lieutenant General James B. Peake

        Mr. Chairman and Members of the Subcommittee, thank you for this
    opportunity to appear before you today. This will likely be the last
    time I appear before your committee as the Army Surgeon General, and I
    wish to express my gratitude for your unwavering support for our
    military and especially for our medical personnel.

                               CORE COMPETENCIES

        Our Nation is at War, and there is nothing that brings the missions
    of military medicine into focus like war. Healthy and medically
    protected Soldiers; a trained and equipped Medical Force that deploys
    with the Soldiers, providing state-of-the-art medical care; and
    managing the health of all Soldiers and their families back home while
    keeping the covenant with our retirees--this is the mission of the
    United States Army Medical Department (AMEDD). We are keeping our
    promise to all of our beneficiaries by providing quality and timely
    healthcare.

                    HEALTHY AND MEDICALLY PROTECTED SOLDIERS

        This is a part of ongoing health maintenance informed by research
    in military relevant areas and about which few outside the military
    have much interest. From the development of vaccines for diseases
    seldom seen in the United States to formulating an insect repellent
    that can serve as a sunscreen and camouflage paint all at the same
    time, to working with the Food and Drug Administration to establish
    workable protocols for new drugs in remote locations, we meet our
    obligations to medically protect soldiers. It requires an integrated
    approach to educate soldiers about their health and about the things
    they can do to protect themselves day to day and in whatever region of
    the world they may find themselves deployed.

                              CURRENT DEPLOYMENTS

        There have been many improvements in military medicine since I last
    appeared before this committee. These improvements are making a
    difference in how well we are taking care of our Soldiers on the
    battlefield.
        To spearhead the Army Medical Department Transformation initiative,
    we have implemented the Medical Reengineering Initiative or MRI. MRI
    was approved by the Vice Chief of Staff of the Army in 1996 as an Army
    medical force design update (FDU), which reorganizes Echelon Above
    Division and Echelon Above Corps deployable medical units. These are
    the medical units that provide levels of battlefield medical care above
    the Battalion Aid Station and Division level medical companies. MRI
    will provide the Army with the modular organizational structure that
    supports the Current Force and will provide a bridge to the Future
    Force. MRI is versatile as exemplified by unit designs that are
    modular, scalable and possess standardized medical capabilities that
    can be deployed around the globe. The Army Plan (TAP) and the Army
    Strategic Planning Guidance (ASPG) 2006-2023, recognizes MRI as an
    example of modularity. MRI promotes scalability through easily
    tailored, capabilities-based packages that result in improved tactical
    mobility, reduced footprint, and increased modularity for flexible task
    organization. This design enables the Joint Forces Commander to choose
    among augmentation packages, thus enabling rapid synchronization of
    desired medical capabilities. MRI is enabling us to provide better care
    further forward on the battlefield and faster than ever before.
        With your help we are also saving lives through the deployment of
    the hemostatic dressings and the chitosen bandage. These are two new
    lifesaving wound dressings that are being used in Operation Enduring
    Freedom (OEF) and Operation Iraqi Freedom (OIF). Approximately 1,200
    hemostatic dressings were deployed under an Investigational New Drug
    battlefield clinical protocol. A team medic successfully applied a
    hemostatic dressing to a left thigh wound after he was unable to
    completely control femoral arterial bleeding with a pressure dressing
    and tourniquet. Similar success was achieved in two documented reports
    of Special Forces Medics using these bandages to treat severe bleeding
    caused by gunshot wounds to the extremities. Approximately 5,800 of
    these bandages have been deployed to the theater of operations. Our
    researchers continue to look for solutions for non-compressible
    hemorrhage wounds to the chest or abdomen. A hemostatic foam that can
    be injected into the body cavity is currently under research as well as
    a hand held high intensity focused ultrasound (HIFU) device. Our
    researchers at Medical Research and Materiel Command (MRMC) are working
    on a number of projects which will improve health care on the
    battlefield and in our treatment facilities. Some examples include the
    Hemoglobin-Based Oxygen Carrier (HBOC) a temperature stable, oxygen
    carrying solution that can be readily available to treat combat
    casualties with life threatening hemorrhage. MRMC is working with
    several companies to design Phase 2 and Phase 3 clinical trials with
    the goal of attaining FDA approval and licensure. MRMC is also
    sponsoring research on developing a better insect repellent, especially
    to protect our Soldiers from sand flies. In OIF over 400 of our
    Soldiers have been diagnosed with Leishmaniasis, which is a disease
    caused by parasites transmitted by sand flies. Leishmaniasis includes a
    wide spectrum of diseases ranging from the cutaneous form to the
    potentially fatal visceral disease. No prophylactic drugs or vaccines
    exist to combat this disease, hence personal protective measures are
    currently being used in theater. Each infected Soldier must be
    evacuated to Walter Reed Army Medical Center or Brook Army Medical
    Center of a 10-28 day therapy. Our researchers are looking for ways to
    identify and treat this disease in theater to avoid evacuation and
    reduce long-term scarring.
        We are progressing in transforming the combat medic to the new 91W
    Military Occupational Specialty (MOS). These medics train for 16 weeks
    versus the previous 10 week course and gain National Registered EMT-
    Basic certification. The 91W combat medic training is conducted at the
    Army Medical Department Center and School. Active duty medical
    specialists and clinical specialists who have not converted to the 91W
    MOS are required to complete the training in their units that include
    not only EMT certification, but pre-hospital trauma training and
    advanced airway and IV management.
        Not only are we improving our training for personnel, but we are
    also improving our capability to transport patients on the battlefield.
    In order to treat Soldiers on the battlefield we have to be where they
    are. The 507th Medical Company (Air Ambulance) and the 126th Company
    (Air Ambulance) took our most advanced casualty evacuation helicopter,
    the HH-60L Black Hawk, to support operations in Southwest Asia and
    Afghanistan. These aircraft include a digital cockpit, on-board oxygen
    generation system, external electric hoist, advanced communications,
    improved litter support system, medical suction and electrical power
    for medical equipment. We currently have nine HH-60Ls and are working
    on upgrading the entire medical evacuation fleet. On the ground, we
    have the medical evacuation vehicle variant (MEV) of the Stryker. This
    vehicle is integrated into the fighting formation of the 3rd Brigade,
    2nd Infantry Division that deployed to Iraq last November. The new
    ground ambulance can carry four litter patients or six ambulatory
    patients while its crew of three medics provides basic medical care. It
    can be delivered to the battlefield in a C-130 aircraft, has the speed
    and mobility to keep up with fighting forces and can communicate with
    the most advanced combat formations.

                RESERVE COMPONENT AND NATIONAL GUARD INTEGRATION

        This war has reinforced a lesson we learned long ago: the AMEDD
    could not do its wartime mission without the Army National Guard and
    Army Reserve. Guard and Reserve medical units play key roles in Iraq,
    Afghanistan, and also in replacing active-duty personnel deployed from
    our stateside and European hospitals. We rely on Reserve Medical
    Support Units to process deploying Soldiers. Without them, active duty
    medical forces at mobilization sites would not be able to continue
    normal care for Soldiers and families.

    Professional Filler System
        The Army Medical Department has been very successful in supporting
    contingency operations and the Global War on Terrorism (GWOT) by using
    a Professional Filler System or PROFIS to man early deploying units.
    Our PROFIS system takes AMEDD personnel from our fixed facilities and
    assigns them to deploying units who do not have their full complement
    of medical personnel. Medical Command (MEDCOM) is currently prepare to
    5,787 PROFIS personnel to deploying units. Of the 5,787: 1,177 are
    Active Component personnel slated against spaces in Reserve units and
    the remaining 4,610 personnel are PROFIS to active component units or
    multi-component units. We currently have 839 PROFIS deployed to support
    OIF and OEF and all the while, our Regional Medical Commands are still
    maintaining their baseline medical care workload despite personnel
    being deployed.

    Medical Holdover
        A small percentage of Reserve Component Soldiers who mobilized in
    support of Operation Iraqi Freedom were not medically fit to deploy.
    Personnel guidance prior to October 25, 2003 stated Soldiers who were
    not medically fit to deploy would remain on active duty until maximum
    therapeutic benefit had been accomplished. If the Soldier's condition
    was still not at the point where he or she could deploy, then a Medical
    Evaluation Board would ensue and the Soldier would be released from
    active duty. By the end of October 2003 there were 4,452 Soldiers in
    the Medical Holdover (MHO) population and the numbers were growing.
    Personnel guidance changed on October 25, 2003 and the Army now returns
    Soldiers to their units and their homes if they are found medically
    unfit during the first 25 days of mobilization. The number of Soldiers
    who enter MHO during mobilization is now less than 1 percent. In
    October 2003 the Army also instituted enhanced access standards for MHO
    Soldiers, realizing these Soldiers were not near their homes and
    family, were living in quarters that were intended for short-term
    housing, and that the process of providing maximum therapeutic benefit
    was taking too long. The enhanced standards include 72 hours for
    specialty referrals, one week for magnetic resonance imaging and other
    diagnostic studies, two weeks for surgery, 30 days for the medical
    portions of the medical evaluation board processing, and one case
    manager for every 50 MHO Soldiers. Currently the AMEDD is meeting or
    exceeding those standards more than 90 percent of the time. Of the
    Soldiers in MHO on November 1, 2003, 871 remain on active duty. The
    total number of MHO Soldiers is 4,393 which is what our modeling
    predicted given the number of Soldiers mobilizing for OIF2 and the
    number of Soldiers demobilizing from OIF1. It is important to note the
    military is in the middle of the one of the largest troop movement
    operations since World War II.

    Soldier Readiness Processing
        As indicated above, a very small percent of Reserve Component
    Soldiers are mobilized, but are not medically ready to deploy. Soldier
    Readiness Processing (SRP) evaluates Soldiers to ensure they are
    medically and dentally ready to deploy. This means the Soldier has the
    required immunizations, is medically healthy, has a dental readiness
    classification of 1 or 2, and has his personal medical equipment such
    as ear plugs, eye glasses and protective mask inserts. Active Component
    units participate in the SRP process on a routine basis and are
    constantly maintained in a deployable status. RC Soldiers have a
    limited amount of time to participate in SRP's hence their medical
    status sometimes is not up to par to deploy with the rest of their
    unit. An integral part to the successful mobilization of our Army
    Reserve (USAR) and National Guard (ARNG) troops is providing medical
    and dental services by using the Federal Strategic Health Alliance
    (FEDS-HEAL) Program. The FEDS-HEAL program brings together resources of
    the DOD, Department of Health and Human Services and Veterans Health
    Administration to create a robust provider network. FEDS-HEAL delivers
    readiness services to USAR, ARNG, and United States Air Force Reserve
    service members in all 50 states and territories. The FEDS-HEAL
    provider network performs medical examinations, dental examinations and
    treatment, immunizations, and other medical readiness services through
    Veterans Administration medical centers, Federal Occupational Health
    clinics, and a network of over 1,100 physicians and nearly 2,250
    dentists. In addition to exams and treatment, FEDS-HEAL provides a data
    management service and inputs patient care data into the Army's Medical
    Protection System (MEDPROS). The FEDS-HEAL Program Office provides 100
    percent Quality Assurance Reviews prior to MEDPROS reporting. In
    Calendar Year 2003, Reserve and Guard forces received 42,624 dental
    exams, 44,730 dental treatments, 29,971 physical exams, 54,108
    immunizations, and 2,427 vision exams.

    90 Day Rotation Policy
        From late 1995 to early 1998, one-third of RC physicians who
    deployed to the Balkans left the USAR due to the 270 day length of
    rotations. Recruitment and replacement of these physicians was
    difficult. The loss resulted in personnel shortfalls of physicians,
    dentists, and nurse anesthetists. A 1996 survey of 835 RC physicians
    found that 81 percent could be mobilized up to 90 days without serious
    impact to their civilian practice, however, extended deployments beyond
    90 days had a severe negative impact. In late 1999 the Army conducted a
    pilot program deploying RC physicians, dentists, and nurse anesthetists
    for 90 day rotations. In 2001 a follow-on survey was conducted which
    validated the finding that RC physicians, dentists, and nurse
    anesthetists could deploy for that period of time without adversely
    affecting their private practice. The Army rotation policy was modified
    in early 2003 to provide for 90 day ``Boots on the Ground'' or BOG
    rotations either in the continental United States or outside of the
    continental United States for these specialties. Many medical
    professionals want the opportunity to serve their country. This policy
    enables them to stay with us in the Reserves and contribute to the
    mission.

                        PRE AND POST HEALTH ASSESSMENTS

        We place a high priority on maintaining the health of Soldiers
    before, during, and after deployment. Before Soldiers deploy we closely
    monitor their Individual Medical Readiness (IMR). That means up-to-date
    immunizations, periodic health assessments, screening tests and medical
    equipment (ear plugs, eyeglasses, etc.). We are working on uniform
    metrics to inform commanders on the state of medical readiness of their
    troops.
        For the first time in military history, we are implementing a
    systematic process of capturing this information. All of this data is
    part of the pre-deployment health assessment, which provides baseline
    information on the Soldier's health status before deploying. Upon
    redeployment all Soldiers are required to fill out a post-deployment
    health assessment form. We are working on ways to improve the
    collection of this data, to include using hand-held devices that can
    electronically download the information into the central record-keeping
    repository. Once the information is captured electronically, the
    TRICARE online web portal can be used by the Soldier's medical provider
    to access the record. Department of Veterans Affairs can also access
    the information from the individual's medical record, which is
    available to the VA upon the Soldier's separation from the military.
        Despite these advances in management and use of our databases, we
    in the Army recognized the need for improvement. First and foremost, we
    realized the limitations of paper forms for pre- and post-deployment
    health assessment. Completing, copying and shipping paper forms from a
    worldwide deployed and busy Army was a process that was difficult to
    comply with, and almost impossible to oversee. In September 2002, we
    launched an initiative to improve our assessment process by automating
    the collection, distribution, and archiving of the data. The first
    automated assessment form on the internet was activated on April 1,
    2003. A hand-held computer variant of the enhanced (four-page) post-
    deployment program was deployed to the Central Command Area of
    Operations (CENTCOM AOR) and to Europe beginning in August 2003. From
    June 1, 2003 through February 27, 2004, we have received 127,696
    automated health assessment forms, which comprise about one-third of
    all forms received during that period. Automated pre-deployment health
    screening was accomplished for the entire Stryker Brigade Task Force
    before it deployed in November 2003, and is approaching 100 percent for
    the 39th and 81st enhanced Separate Brigades. In Kuwait, all post-
    deployment health assessments are automated; in Iraq, about half of all
    screening is performed using the automated form.
        In November 2003, the Army initiated a formal deployment health
    quality assurance program. This program includes audits of the
    deployment health assessment program on Army installations. Audits have
    been conducted at six Army installations (Forts McCoy, Drum, Lewis,
    Hood, Stewart, and Bragg). These audits reveal that compliance with the
    Army pre- and post-deployment health assessment program is generally
    higher than indicated by comparison with Army personnel databases, and
    is likely to rise further with automation support and standardization
    and centralization of Soldier readiness processing on installations and
    across the Army.

                             LOWEST KIA/WIA RATIOS

        Our died of wounds rate after receiving some level of care in OIF
    is 1.5 percent, the lowest in recorded warfare. A variety of factors
    have contributed to this, to include body armor and Forward Surgical
    Teams (FST). FSTs bring resuscitative surgical skills far forward on
    the battlefield and apply life-saving techniques that preserve the A-B-
    Cs of life: airway, breathing, and circulation. They target the 15-20
    percent of wounded who, without care within the first hour after
    wounding, would die while being evacuated to the combat support
    hospital. Uncontrollable hemorrhage has been the major cause of death
    in this group in previous wars. The FST is well equipped to identify
    and stop bleeding by using a hand held ultrasound machine which can
    identify internal bleeding.

                TRANSITION TO THE DEPARTMENT OF VETERANS AFFAIRS

        Our goal for injured and ill Soldiers is to effect a seamless
    transition of care from DOD to the VA health care system. In September
    2003, Secretary Brownlee put together a Disabled Soldier Liaison Team
    (DSLT) specifically to look at the transition process for our most
    severely disabled Soldiers and make recommendations to improve that
    process. The mission of the DSLT was to assist Soldiers in their
    transition from the Army to the Department of Veterans Affairs Health
    Care system. The team was chartered to help Soldiers understand the VA
    system and their benefits. Our efforts in the medical department
    focused on identifying and appointing case managers/discharge planners
    who served as the primary point of contact with the VA. The VA also
    designated OIF/OEF coordinators in each of their regional offices and
    provided staff at our busiest medical centers to facilitate a Soldier's
    transition into their system. We currently have five VA coordinators
    physically located at Walter Reed Army Medical Center who provide
    personal liaison support between Soldiers and the VA.

                                   READINESS

        One of the key successes in fighting the war on terrorism has been
    our use of special medical augmentation teams (SMART). The Army Medical
    Department has used this reach back capability to our sustaining base
    to provide world-class expertise on the ground to support the
    Warfighter. We have rapidly deployed subject matter experts in
    leishmaniasis, pneumonia, mental health and environmental surveillance,
    to name a few, into Iraq or Afghanistan to provide assessments and
    recommendations to the command. A prime example of this capability is
    the environmental surveillance team from the U.S. Army Center of Health
    Promotion and Preventive Medicine (CHPPM) that was deployed to Iraq to
    assess an evolving concern near a nuclear research facility. An
    infantry regiment was operating within a few kilometers of the Tuwaitha
    Nuclear Research Facility. Concerns were raised about possible
    radiation and chemical exposures to U.S. service members and local
    civilians due to looting. A SMART Preventive Medicine Team from CHPPM
    deployed into the area to assess the Tuwaitha facility, which included
    a site inspection and environmental sampling. All of the field data,
    reports, and potential health risks were communicated to field
    commanders and Soldiers. Due to weather conditions, short exposure
    time, conditions of exposure, and location of troops relative to the
    site, the resultant health risk was low based on U.S. peacetime
    standards.
        In July 2003 the Army Medical Department chartered a team of mental
    health experts from CONUS treatment facilities around the nation to
    assess mental health issues in Iraq. Specifically, the mental health
    team was organized to assess the July increase in suicides in OIF,
    evaluate the patient flow of mental health patients from Theater, and
    assess the stress-related issues Soldiers were experiencing in a combat
    operation. This was the first time a mental health assessment team has
    ever come together and conducted a mental health survey with Soldiers
    in an active combat environment. The team remained in Iraq for six
    weeks and with the support of the combatant commanders, traveled to
    several base camps conducting their assessment.
        The AMEDD also has nationally recognized experts in the chemical,
    biological, radiological, and nuclear (CBRN) field, which can be formed
    into SMART teams to rapidly respond to a CBRN threat either CONUS or
    OCONUS. These experts come from our medical centers, the U.S. Army
    Medical Research and Materiel Command, CHPPM, and the Army Medical
    Department Center and School. Their expertise ranges from medical
    surveillance and epidemiology to casualty management. The AMEDD Center
    and School also has developed a number of short and long courses
    addressing CBRN topics which can be taught in house or exported to our
    treatment facilities. CBRN training has been incorporated into the
    Soldiers' common skills training, advanced individual training,
    leadership courses, primary care courses, and a number of other
    avenues.
        Our partnerships and collaboration with civilian counterparts is
    crucial in training our medical force. The U.S. Army Medical Research
    Institute of Infectious Diseases (USAMRIID) at Fort Detrick, MD, is a
    great national resource of expertise on testing methods to eradicate
    dangerous diseases. USAMRIID is partnering with the National Institutes
    of Allergy and Infectious Diseases (NIAID) and the U.S. Department of
    Agriculture (USDA) towards building a synergistic biodefense campus.
    The goal is to leverage the knowledge and capabilities of these
    research institutions by co-locating them on a single campus to fight
    the Global War on Terrorism.

                                 GARRISON CARE

        The AMEDD is a $9 billion per year enterprise whose business is to
    take care of the Soldier, the family member and the retiree. Managing
    this complex organization with its many missions requires a structured
    system that directs the members towards a common goal. The system in
    place today is the balanced scorecard, which uses a building block
    approach to guide the organization in making the right decisions at the
    right time. The AMEDD is continually measuring itself and using
    assessment tools to ensure best business practices are in place and
    being used. The Decision Support Center sends out patient satisfaction
    surveys to measure a patient's satisfaction with a provider at a
    particular treatment facility. This type of feedback is invaluable in
    identifying where the organization is doing well or where the
    organization needs to improve.
        The AMEDD has used funds to establish venture capital projects and
    advanced medical practices initiatives to help military treatment
    facilities improve delivery of health care. Such projects include
    hiring certain specialties in a particular field to bring in more
    patients, renovating clinic space or purchasing new equipment to
    capture a particular market niche. Each project is required to have a
    business case analysis that must demonstrate the project will pay for
    itself within three years. This type of program helps commanders make
    better business decisions and saves money for the AMEDD in the future.
        Our health care delivery system is poised to move into the next
    generation of TRICARE contracts. The new contracts are performance
    based and have been designed to control costs through incentives for
    the direct care system and for the contractors. Its goals are to
    increase beneficiary satisfaction and improve portability. Transition
    activities at every level of the military health care system and within
    contractor organizations demonstrates a full commitment to a successful
    transition. For the AMEDD specifically, there is a TNEX Transition Task
    Force that has developed a transition task list that identifies
    critical, time sensitive tasks that must be accomplished in sequence
    for the transition to be successful at the MTF level. Transition
    activities include training and educating staff on market management
    and revised financing. The Transition Task Force trains and develops
    personnel in key positions such as future commanders, data analysts,
    and health care administrators in executive level positions. We look
    forward to this exciting era of change, which will begin in June of
    this year.
        Complimenting our delivery of health care is the availability of
    housing for visiting family members. Through the philanthropic efforts
    of the Fisher Foundation, there are 14 Fisher Houses operating at 9
    locations. In fiscal year 2003 the Army Fisher Houses served 2,560
    families, providing 39,680 family-nights of lodging. We estimate that
    staying in a Fisher House saved these families over $1.5 million in out
    of pocket lodging costs. The average length of stay per family was 15.5
    days. The contributions that the Army Fisher Houses have made in
    supporting the families of our combat casualties from Afghanistan and
    Iraq have been uniquely valuable. Since March 2003, Army Fisher Houses
    have accommodated 851 families attending to service members who were
    injured in combat operations or in support of combat operations. The
    occupancy rate for the Fisher Houses at Landstuhl Regional Medical
    Command in Germany, Walter Reed Army Medical Center in the National
    Capitol Region and at Fort Sam Houston, San Antonio has averaged over
    97 percent. Its obvious that the Army Fisher Houses provide a valuable
    benefit for military families.
        In an effort to protect direct care funds, the Congress passed
    legislation restricting the flow of funds from the direct care system
    to the private sector care system and vice versa. With the new health
    care contracts using the best business practices, there are incentives
    built into the system to use the direct care side as much as possible.
    Restricting movement of Defense Health Program funds will not allow the
    military treatment facilities the flexibility to manage their resources
    efficiently. In the new management environment, military treatment
    facilities are incentivized to increase productivity by pulling more
    beneficiaries into their facilities. The Army appreciates the
    congressional intent to protect direct care funding, but we recommend
    that the fiscal year 2005 Defense Appropriations Act language remove
    this restriction and allow flexibility to move funds to wherever care
    is delivered without a prior approval reprogramming.

                                    SUMMARY

        Health care is a key quality of life issue for our military. I am
    committed to providing that quality care throughout the spectrum of
    operations, from the foxhole to the regional medical center. The Army
    Medical Department recognizes its responsibility to the men and women
    who defend our nation, to their families who support them, and to the
    retirees who have contributed so much to our country. We are committed
    to providing all of them exceptional healthcare. Army medicine is more
    than an HMO. Our system of integrated care includes teaching centers,
    research and development organizations, health clinics, field
    hospitals, and much more. The direct care system is truly the medical
    force projection platform for our Army; the Army we support across the
    world and across the spectrum of conflict. We do this quietly and on a
    daily basis all the while integrating active, guard and reserve units
    in support of the Chief of Staff's vision of THE Army.
        I would like to thank my fellow Surgeons General. Their support,
    teamwork, and camaraderie are much appreciated. I would also like to
    thank the Committee for its continued commitment to our men and women
    in uniform, the civilian workforce, and our beneficiaries.

        Senator Stevens. Admiral Cowan.

    STATEMENT OF VICE ADMIRAL MICHAEL L. COWAN, SURGEON
                GENERAL, UNITED STATES NAVY
        Admiral Cowan. Thank you, Chairman Stevens, Senator Inouye,
    and distinguished members of the subcommittee for inviting me
    here today.
        We frequently hear it said that post-9/11 everything
    changed, but for us in Navy medicine much remains the same. In
    fact, the events that have occurred since September 2001 have
    continually reemphasized the importance of our total mission of
    force health protection.
        The four pillars of force health protection are: first, to
    prepare a healthy and fit force that can go anywhere and
    accomplish any mission that the defense of this Nation requires
    of them; second, for our medical personnel to go with them to
    protect them from the hazards of the battlefield and
    deployment; third, to restore their health wherever protection
    fails while also providing outstanding and seamless health care
    for their families back home; and finally, to help a grateful
    Nation thank our retired warriors by providing them health care
    for life through TRICARE for Life.
        We strive to create a healthy and fit force by supporting
    healthy lifestyles not just for our sailors and marines but for
    their families as well. Our long-term goal is to form
    partnerships with families to adopt healthy lifestyles that
    have positive effects through their lifetimes. Healthier
    behaviors result in a fit and healthy force and also reduce the
    need for restorative medicine later in life. We work closely
    with our people so they are less likely to become our patients.
        Nearly one in six of naval medicine's deployable personnel
    are deployed today in support of operations on the global war
    on terrorism and in Iraq, and we will continue to operate at
    that rate for the foreseeable future. Forward medical personnel
    provide first responder, stabilization and forward
    resuscitative care at modular theater facilities, both ashore
    and afloat. Our theater hospitals are deployed independently or
    combined with other modules in a Lego-like fashion, a building
    block fashion, to provide essential care in theater. Definitive
    care is through a medevac process in fixed overseas and
    continental United States (CONUS) medical treatment facilities
    (MTF).
        Naval medicine's most vital asset is our people. Attracting
    skilled professionals and, equally importantly, retaining them
    to take advantage of their experience and enhanced skills
    represents one of our more significant challenges.
        We continue to support ongoing efforts implementing the
    Presidential task force recommendation to pursue sharing
    collaboration with the Department of Veterans Affairs,
    specifically to optimize the use of Federal health care
    resources. I believe that our progress in these collaborations
    is one of our great success stories.
        We worked hard to get the best value from every dollar that
    Congress has provided, and your assistance is needed to help
    restore the flexibility to manage funds across activity groups.
    Fenced private sector funds prevent transfer from the MTFs to
    private sector and prevent transfer from private sector to the
    MTF's. This does not allow us to increase productivity in the
    MTF's without the burden of prior approval reprogramming. This
    is very important in the upcoming year because the new T-NEX
    contracts with their incentives to move care into the MTF's
    make restoration of the flexibility all the more vital.
        We continue to work on the forefront of technology, and I
    would specifically highlight information technologies to
    include the development of naval medicine online. This
    communication tool will be the key to knowledge sharing
    throughout naval medicine as an enterprise, allowing the right
    information to flow to the right people at the right time
    whenever and wherever it is needed. Naval medicine is also
    committed to transforming the naval/Marine Corps infrastructure
    and services.
        We are further committed to the Chief of Naval Operations
    (CNO) transformational vision for projecting decisive joint
    capabilities from the sea, SeaPower 21. Examples of that
    transformation abound throughout naval medicine where hard work
    in identifying deficiencies and cutting costs have resulted in
    multiple opportunities to support the recapitalization of the
    Navy. This transformation is not limited to shore facilities.
    It includes remaking our fleet assets to include the
    reconfiguration of forward medical assets from cold war era
    platforms to the smaller and more agile task-oriented units
    that we deploy today.
        Finally, we are right-sizing our active forces to the best
    mix of active, civilian, and contract personnel to bring the
    right capability to bear and in alignment with the CNO's
    vision. We have reconfigured and integrated naval reserve
    components in very different ways to shape missions, along with
    the active component, creating a single unified force and
    assuring the very best use of the skills and talent of all of
    our medical personnel.
        We are effecting positive change throughout naval medicine,
    embracing the CNO's vision, and I am confident that we are on
    the right course for the challenges ahead.

                               PREPARED STATEMENT

        I share General Peake's gratitude and sense of having been
    honored by the work and the interest of this committee, and I
    thank you for everything that you have done with us and for us
    during my time as the Navy Surgeon General. It has been a
    privilege to serve.
        [The statement follows:]

              Prepared Statement of Vice Admiral Michael L. Cowan

        Chairman Stevens, Senator Inouye, distinguished members of the
    subcommittee, thank you for inviting me here today. Each year, the Navy
    Surgeon General has the privilege of appearing before the Senate
    Appropriations Committee Subcommittee on Defense to provide an update
    on the state of Naval Medicine. It has been a year of challenges met
    and rewards reaped, and of maturing of programs that we undertook in
    the wake of September 11, the anthrax attacks by terrorists unknown,
    and the prosecution of the Global War on Terrorism.
        Force Health Protection is the primary focus of Naval Medicine.
    Force Health Protection is comprised of four mission objectives: (1)
    Preparing a healthy and fit force that can go anywhere and accomplish
    any mission that the defense of the nation requires of them; (2) go
    with our men and women in uniform to protect them from the hazards of
    the battlefield; (3) restore health, whenever protection fails, while
    also providing outstanding, seamless health care for their families
    back home; and (4) help a grateful nation thank our retired warriors
    with TRICARE for Life.
        Naval Medicine balances all these actions to make force health
    protection work and see that all our beneficiaries get the outstanding
    healthcare they deserve. Wherever our Marines and Sailors at the tip of
    the spear deploy, we are along side them as we provide operational
    support in the Global War on Terrorism, achieving very low disease and
    combat casualty rates on the battlefield. The lessons we've learned
    from previous wars have led us to innovations toward a new level of
    agility and capability. Today, Expeditionary Medical Units are being
    built and fielded. These are complete lightweight tent hospitals that
    can be airlifted on site within days, and smaller units, Forward
    Resuscitative Surgery Systems, can be deployed to the action and made
    ready for patient care within hours. They, staffed with their ``Devil
    Docs,'' have proven to be lifesavers for wounded Marines.
        In defense of bio-terror attacks against our Nation, including the
    recent ricin attack at the Dirksen Senate Office Building, the Naval
    Medical Research Center, has made great advances in developing
    enhanced, rapid analysis and confirmation processes. These innovations
    have directly supported the nation's security and are a vital component
    in protecting our military fighting a war both abroad and here in the
    homeland.
        Naval Medicine provides the most visually recognizable healthcare
    facility in the world--the military treatment facilities aboard the
    distinctive white with red-crossed hospital ships USNS COMFORT and USNS
    MERCY. These ships are symbols of life saving and caring that also send
    a clear message to our enemies: We are committed to our mission, and
    are prepared to take care of the casualties we may suffer to accomplish
    it.
        Naval Medicine is an effective defensive weapon system for the Navy
    and Marine Corps Team. Naval Medicine treated every combat casualty
    within the critical ``Golden Hour'' through the use of new and
    innovative surgical units, such as the Forward Resuscitative Surgery
    System (FRSS). We reconfigured our Cold War era Fleet Hospitals to
    become more agile, mobile 116 bed Expeditionary Medical Facilities that
    are being used to support operations around the world. Sailors and
    Marines can be confident that they will have world class health care
    professionals at their side at all times--at sea or ashore.
        Force Health Protection remains our primary mission. We strive to
    create a healthy and fit force through encouraging and supporting
    healthy lifestyles not only for our Sailors and Marines, but for their
    families as well. Our goal is to form a partnership with our families
    to help them adopt healthier lifestyles that will have a positive
    effect throughout their lifetimes. These healthier behaviors will not
    only result in a fit and healthy force, but will reduce the need for
    restorative medicine later in life. We work with our people so that
    they will be less likely to become our patients.
        We recognize that health care is a major retention and recruitment
    issue as well as a readiness issue, and strive to provide world-class
    care not only to the families of our Sailors and Marines, but to
    retired service members and their families as well. Naval Medicine is
    implementing Family Centered Care initiatives to increase patient
    satisfaction and continuously improve on our delivery of patient care.
    If we can retain our families within the direct health care system,
    Naval Medicine can continue to assist them with the tools to form
    healthy habits throughout their lives.

                            FORCE HEALTH PROTECTION

        Force Health Protection is a continuum of services designed to
    create and maintain a healthy and fit force. This continuum begins with
    medical and dental screening during induction into the service,
    followed by annual preventive health assessments, regularly scheduled
    physical examinations, pre and post deployment assessments and ending
    with separation or retirement physicals. Health care professionals
    participate and review every assessment along the continuum. The same
    schedule of physical assessments is followed for both active duty and
    reserve service members.
        Over 100,000 Navy and Marine Corps personnel completed post
    deployment health assessment forms since April 2003. Primary care
    providers then interview service members if there are any indications
    of deployment related illnesses or injuries, or changes in their health
    concerns. Service members may be referred for additional specialty care
    if indicated. As of March 2004, 7 percent of active-duty and 15 percent
    of reservists required post deployment medical referrals.

                              DEPLOYMENT MEDICINE

        In support of Operation Iraqi Freedom (OIF), over 7,300 active and
    reserve Naval medical personnel were deployed or mobilized, at sea or
    shore. From the battlefield Hospital Corpsmen to the Forward
    Resuscitative Surgery System (FRSS), the Fleet Hospitals (FH) and the
    hospital ship USNS COMFORT, and to the National Naval Medical Center
    (NNMC), Bethesda, wounded, injured, and sick Coalition Force warriors,
    Iraqi prisoners of war, Iraqi civilians (displaced persons) received
    the highest quality medical care possible.
        Our readiness platforms include two 1,000 bed hospital ships, 6
    active duty and 2 Reserve Fleet Hospitals as well as special medical
    units supporting Casualty Receiving and Treatment Ships (CRTS) and
    smaller, organic units assigned to augment the Marine Corps and
    overseas hospitals.
        Nearly one in six of Naval Medicine's deployable personnel are
    deployed today in support of operations fighting the Global War on
    Terrorism and will continue to operate at that rate for the foreseeable
    future. Forward medical personnel provide first responder,
    stabilization and forward resuscitative care at modular theater
    hospitals, both ashore and afloat in theater. Our modular theater
    hospitals can be employed independently or combined with other modules
    to provide essential care in theater. Definitive care is provided in
    fixed overseas and CONUS military medical treatment facilities.
        During Operation Iraqi Freedom, Naval Medicine employed a new type
    of unit to provide far forward surgery. The Forward Resuscitative
    Surgery System (FRSS) was developed to provide forward surgical
    capability to support the Marine Corps' Regimental Combat Teams. The
    FRSS is staffed with a team of two general surgeons, one
    anesthesiologist, one critical care nurse and four Hospital Corpsmen.
    The FRSS can accommodate 18 casualties in 48 hours without re-supply.
    During OIF, six FRSS teams treated 96 casualties and performed 153
    surgical procedures during combat operations.
        This year has also seen the introduction of the Forward Deployable
    Preventive Medical Unit (FDPMU) designed to assess, prevent, and reduce
    health threats in support of deployed operating forces. Other missions
    for the FDPMU include humanitarian assistance, consequence management,
    and disaster relief operations. Capabilities can include chemical,
    biological, and radiological agent detection and identification, as
    well as toxic environmental chemical detection and identification.
        The Forward Deployable Preventive Medical Units are capable of
    deploying within 96 hours, can serve as a joint force asset to provide
    specialized preventive medicine, and CBRN response services in support
    of force health protection to combatant commanders and Joint Task Force
    Commanders. Naval Medicine has elements of two FDPMUs currently
    deployed to Iraq and elements of another FDPMU currently deployed to
    Haiti.
        Our mobile platforms continue to be refined, making them more agile
    and adaptable to specific missions. Transformation efforts continue by
    the Fleet Hospital Program with the continued development and
    refinement of the Expeditionary Medical Unit (EMU). The EMU provides
    both forward stationed and CONUS-based forces the ability to rapidly
    deploy, employ, sustain and redeploy scalable medical capabilities to
    austere regions of the globe. The transformation process from Fleet
    Hospitals to EMUs is planned to continue over the next several years as
    we reshape our forward presence to a lighter, smaller and more agile
    force.
        EMU Alpha was deployed to Djibouti in September 2003 and is still
    receiving patients. NH Jacksonville is providing the staff for EMU
    Alpha.
        As part of the post Operation Desert Storm lessons learned
    analysis, Naval Medicine embarked on an extensive effort to better
    organize and train our wartime-required active and reserve medical
    force, while at the same time optimizing our peacetime healthcare
    benefit mission. Naval Medicine developed and implemented a CONUS
    readiness infrastructure strategy that aligned specific operational
    platforms to a single Military Treatment Facility (MTF), along with the
    active duty and reserve manpower required to perform both wartime and
    peacetime missions. This readiness alignment strategy provides the MTF
    commander with the authority and the resources to balance wartime
    readiness and peacetime benefit missions.
        As a result of this new structure, Naval Medicine can employ
    ``Tiered Readiness.'' This strategy allows platform rotation to support
    ready surge requirements. Each platform and their parent Medical
    Treatment Facility (MTF) will be on a scheduled rotation: for six
    months, two MTFs and their supporting Fleet Hospital personnel will
    have to be ready to deploy within 10 days. Three additional Fleet
    Hospitals and their parent MTFs have sixty days to prepare for a
    possible deployment. Finally, there is a sixth Fleet Hospital, in
    reserve, which must be ready to deploy within 120 days. Tiered
    Readiness enables Naval Medicine to plan, prepare and meet our
    operational commitments and is in synch with the Chief of Naval
    Operations' transformational vision for the United States Navy.

                   NAVAL MEDICINE OFFICE OF HOMELAND SECURITY

        Winning the Global War on Terrorism is job #1 and Naval Medicine
    brings many assets to bear in this fight. As its Surgeon General, I
    think of Naval Medicine as a ``Defensive Weapon System'', which, in
    addition to providing the highest quality medical care to our
    warfighters, also can take action to deter threats through such
    mechanisms as delivering vaccines that eliminate specific disease
    threats. We have sophisticated technologies designed to detect
    biological, chemical and radiological threats before they cause harm,
    and we have highly trained medical personnel who can identify early
    signs of an intentional or natural disease outbreak that could degrade
    our military effectiveness if unrecognized. Naval Hospitals and clinics
    are vital national security assets that are a cornerstone of both force
    health protection and the National Disaster Medical System.
        The Naval Medicine Office of Homeland Security, only in its second
    year, continues to make great contributions to our Force Protection,
    disaster preparedness, and homeland security missions, both here and
    abroad. Naval Medicine continues to execute cutting edge initiatives to
    ensure our hospitals and clinics around the world can continue to
    provide care for all who depend upon us--even in the event of an attack
    or disaster. Presently, we are executing an enterprise-wide program to
    strengthen our effectiveness in responding to disaster. The Disaster
    Preparedness, Vulnerability Analysis, Training and Exercise (DVATEX)
    Program has been conducted at 24 of our 30 military treatment
    facilities. It employs a comprehensive vulnerability analysis of all
    hospital operations in a disaster or terrorist attack. DVATEX provides
    emergency preparedness education thus far to over 5,000 Naval Medicine
    personnel, and it has exercised hundreds of our people, alongside their
    loyal civilian counterparts, to improve integration during an
    emergency.
        DOD is about to deploy a web-based training program that will be
    used to educate physicians, nurses and other health care providers on
    response to chemical and biological emergencies. Originally developed
    for Navy use, the program has been adopted by the MHS and the Defense
    Medical Readiness Training Institute is preparing it now for educating
    personnel in all three Services.

                   NAVAL MEDICINE'S PEOPLE: A MANPOWER STATUS

        Naval Medicine's most vital asset is its people. Attracting skilled
    professionals and, perhaps more important, retaining them to take
    advantage of their experience and enhanced skills, is one of Naval
    Medicine's greatest challenges.
        Naval Medicine strategies to recruit and retain the best people
    include a multi-faceted and highly coordinated approach: The
    professional and educational needs of our health care professionals
    must be met to ensure they, at a minimum, are equal to their civilian
    counterparts. Their work environment must be supportive of their
    contributions and accommodating to their special needs, missions and
    requirements, while continuously challenging them professionally.
    Finally, their financial compensation must be sufficiently competitive
    with their civilian counterparts for us to attract and retain the right
    people.
        We require our Naval Medicine professionals to have the same skills
    and qualifications as their civilian counterparts, and also require of
    them additional unique personal and professional challenges. A status
    of Naval Medicine's people is below:
    Medical Corps
        At the beginning of fiscal year 2004, the Navy's Medical Corps was
    manned at approximately 101.8 percent. Navy Medicine is working on
    community management initiatives to ensure more of a balance between
    specialties. The attrition rate for fiscal year 2003 was 9.2 percent,
    with the three-year average rate at 8.9 percent. Attrition is expected
    to be higher in fiscal year 2004, due to the number of requests for
    resignation and retirement that have already been received. High
    operational tempo and longer deployment durations have been cited as
    major reasons for this increase.
        Despite success at manning and retaining skilled professionals at
    the Medical Corps' top line, several critical specialty areas remain
    undermanned. These specialties are: Anesthesia (85 percent), Cardiology
    (57 percent), Pulmonary/Critical Care (76 percent), Gastroenterology
    (79 percent), General Surgery (88 percent), Infectious Disease (89
    percent); Pathology (85 percent), Urology (85 percent), and Radiology
    (75 percent). Not surprisingly, surgical specialists,
    anesthesiologists, cardiologists, gastroenterologists, and radiologists
    continue to be the most difficult to recruit and retain because of the
    high salaries offered in civilian practices.
    Medical Special Pays
        To be competitive in a marketplace with a limited number of
    qualified applicants and retain them once they have chosen Naval
    Medicine, adequate compensation is critical. The civilian-military pay
    gap has increased steadily, which makes it difficult to recruit and
    retain physicians in high demand specialties.
    Dental Corps
        At the close of fiscal year 2003, the Navy Dental Corps was manned
    at 91 percent. Despite aggressive efforts to improve Dental Corps
    recruitment and retention, the annual loss rate between fiscal year
    1997 and fiscal year 2003 increased from 8.3 percent to 11.7 percent.
    In addition, declining junior officer retention rates has negatively
    impacted applications for residency training programs, which have
    dropped 18 percent over the last five years. The civilian-military pay
    gap and the high debt load of our junior officers are the primary
    reasons given by Dental Corps officers leaving the Navy.
    Nurse Corps
        At the close of fiscal year 2003, the Navy Nurse Corps was manned
    at just under 98 percent. The nursing shortage nation-wide has made the
    Navy's competition for recruiting and retaining skilled nurses a
    challenge. It has been further challenged by the Nurse Reinvestment
    Act, which offered loan repayment and sign-on bonuses to nurses in the
    civilian sector. Naval Medicine continues to meet military and civilian
    recruiting goals and nursing requirements by using a broad range of
    accession sources, pay incentives, graduate education and training
    programs, and retention initiatives that include such quality of life
    and practice opportunities as leadership challenges, operational
    experiences, promotion opportunities, and diversity in assignments with
    job security. The Nurse Accession Bonus, Certified Nurse Anesthetist
    (CNRA) Incentive Pay, Board Certification Pay, and Special Hire
    Authority are all initiatives that are critical in supporting Naval
    Medicine's success in meeting its nursing wartime and peacetime
    missions.
    Medical Service Corps
        Medical Service Corps manning at the beginning of fiscal year 2004
    was 95.6 percent. The loss rate increased from 6.8 percent in fiscal
    year 2002 to 7.2 percent in fiscal year 2003. Loss rates vary
    significantly between specialties and certain specialties continue to
    have either shortages or experience gaps caused by low continuation
    rates at the junior officer pay grades. The potential effects of
    successive military deployments and the military to civilian billet
    conversions on retention and recruiting are being monitored closely.
        The majority of Medical Service Corps officers enter military
    service directly from the private sector and have funded their own
    professional education. Many Medical Service Corps officers incur
    significant educational debt prior to commissioning and active Naval
    service. Additionally, there is an increasing number of doctoral and
    masters level educational requirements for certain healthcare
    professions with the increase in qualifying degree requirements,
    further exacerbating the educational debt load of our newest officers.
        Biochemists, microbiologists, entomologists, environmental health
    officers, radiation health officers and industrial hygiene officers are
    integral members of Chemical, Biological, Radiation, Nuclear &
    Environmental (CBRN&E), homeland security, and operational readiness
    requirements and initiatives. With their strong educational background,
    significant work experience and security clearances, these officers are
    prime recruiting targets for civilian enterprises working in parallel
    with Department of Defense and Department of Homeland Security
    missions.

    Hospital Corps/Dental Technicians
        The Hospital Corps manning at the end of fiscal year 2003 was 94
    percent. Like the Medical and Dental Corps, some specialty areas,
    identified by their Navy Enlisted Classifications (NEC) struggle to
    remain manned above 75 percent. In the operational forces, the Marine
    Corps reconnaissance Hospital Corpsman specialty is currently manned at
    44 percent. In Naval Military Treatment Facilities, cardio-pulmonary
    technicians are manned at 72 percent, bio-medical repair technicians at
    72 percent, morticians at 56 percent, respiratory technicians at 73
    percent, and basic SEAL hospital corpsman at 70 percent of authorized
    levels. Manning for the Dental Technician rate is at 95 percent of
    authorized levels.
        Initiatives to ensure consistent manning levels, as well as to
    bolster undermanned NECs, include the Navy's Perform to Serve program,
    which allows sailors in other rates to transfer or ``cross-rate'' into
    the Navy Hospital Corps and acquire NECs in critically undermanned
    areas. A current initiative to merge the Hospital Corpsman and Dental
    Technician rates into a single rate may help bolster NECs with poor
    manning levels.

    Rightsizing the Force
        Navy Medicine is converting 1,772 non-readiness military manpower
    positions (billets) to civilian/contract positions in fiscal year 2005.
    All of these positions are at CONUS MTFs or DTFs. OCONUS and
    operational commands are unaffected.
        The final determination of which billets will be converted has not
    occurred yet. The draft list of the 1,772 billets under consideration
    was identified from a larger list of approximately 5,400 over Total
    Health Care Support Readiness Requirement (THCSRR) billets that Naval
    Medicine has been studying. Our manpower and resource management
    experts are working closely with representatives from the Medical,
    Dental, Medical Service, Nurse and Hospital Corps Chiefs/Director's
    Offices, and the Center for Naval Analyses (CNA). Factors to determine
    the final 1,772 positions include readiness impact based on emerging
    threats, community manning levels, the cost of conversion, and skill
    availability in the market place.
        This initiative is very much in line with Navy's fiscal year 2004
    human resource philosophy, which includes maximizing civilian and
    contract personnel for non-military essential (non-readiness)
    positions. The conversion of these positions will help alleviate the
    stress on the operating forces and ensure that military personnel are
    used to perform tasks that are military essential.

                  NAVAL MEDICAL EDUCATION AND TRAINING COMMAND

        I am pleased to report to the Committee that the Naval Medicine
    Education and Training Command, or NMETC, has successfully progressed
    as the central source of learning for all Naval Medical personnel. The
    five learning centers comprising NMETC are co-located with the Fleet on
    the east, west and southern coasts along with basic recruit training in
    Great Lakes, Illinois and Naval Headquarters here in Washington.
        NMETC has established itself as the Learning Center for Force
    Health Protection and is in precise alignment with Navy's Sea Warrior
    program. It has demonstrated being on par with the line Navy in
    implementing the Chief of Naval Operations' Revolution in Training by
    way of the 5 Vector model which when fully operational, will show
    sailors what they need to learn, how to access that learning and
    provide a career road map, which tracks their learning and promotion
    potential. The Naval Medical Department has increasing numbers of
    subscribers to the new web-based Navy Knowledge Online or NKO, and is
    utilizing the growing number of NMETC developed courses to enhance
    their learning. They are also rapidly beginning to share and manage
    their knowledge in an environment of community practice--all in one
    place, in real-time, in NKO. By increasing our partnership with
    civilian academe, we've exploited its skills and knowledge to enhance
    the learning of our Sailors by exposing them to newer ways of thinking
    and state of the art technologies.
        NMETC has established a Naval Reserve medical liaison that provides
    input concerning the rapidly evolving requirements of the Naval Reserve
    and thus utilizes our Reserve partners in ONE Naval Medical education
    and training service.
        Our ``A'' School, the Naval Hospital Corps School, is in the lead
    to see that our young Sailors, both in Active and Reserve components,
    are economically and efficiently trained. This is demonstrated by an
    improved technology-based program to train Hospital Corpsmen in a
    blended learning environment available both in the classroom, and non-
    traditional settings. Our instructors are highly trained and many come
    directly from the operational arena.
        The Naval Schools of Health Sciences in Portsmouth and San Diego
    integrate the precepts of Force Health Protection into every aspect of
    the training and educational curricula and programs. The Commanding
    Officers personally lead this effort through military training,
    leadership and physical fitness. Their mission, to support readiness
    through leadership in advanced medical training, is designed to meet
    the needs of military medicine in conflict and in peace. It is the
    cornerstone for all facets of each training program. All courses
    include learning modules directed towards the protection and self-
    treatment of that sailor and other casualties resulting from weapons of
    mass destruction. Many of our instructors are fresh from the Fleet and
    the Fleet Marine Force, and bring enormous operational experience to
    new students in the classroom. We have incorporated experiences from
    Operation Enduring Freedom and Operation Iraqi Freedom into various
    training programs such as the Joint Special Operations Medical Training
    Center at Fort Bragg, which teaches trauma and emergency care skills to
    corpsmen attached to SEAL Teams and reconnaissance units.
        Projected training requirements for fiscal year 2005 through fiscal
    year 2010 show an increase in the total numbers of personnel to be
    trained as Independent Duty Corpsmen, Laboratory Technicians, Search
    and Rescue and Preventive Medicine Technicians to support operational
    readiness. We are committed to support and to participate with the
    medical activities of our sister services by continuing our
    relationships with other DOD training organizations that prepare
    medical personnel for delivering care to the Fleet as well as in
    integrated operational environments.
        As a primary deliverer of skills sets for Sea Warrior, our schools
    provide benchmark model training programs where students in
    cardiovascular technician, nurse anesthesia, physician assistants,
    preventive medicine technician, surgical technician, medical laboratory
    and nuclear medicine technician exceed professional national
    certification rates by as much as 30 percent thus, augmenting the Chief
    of Naval Operations' ``Revolution in Training.''
        The Naval Operational Medical Institute, or NOMI, with its
    specialty detachments, is our dedicated operational training arm. It is
    fully engaged in preparing line and medical personnel to learn and
    implement survival and medical skills in hostile environments on land,
    in the air and on the sea. Recently, NOMI developed a training program
    and standards for Enroute Medical Care to personnel assigned to Marine
    Corps units with field medical evacuation requirements.
        Naval Medicine at NOMI now has a Center for Medical Lessons Learned
    that provides feedback related to the operational environment. This
    helps to refine and improve requirements for training both at NOMI, as
    well as in our other training programs. The Medical Operational Lessons
    Learned Center is a web-enabled system that has captured 31 lessons
    learned to date from medical personnel who were forward deployed in
    support of operations. The Center is a single point for data collection
    and analysis of all Naval Medical observations and provides expeditious
    feedback related to the operational environment in areas such as
    readiness training, health services support delivery, logistics and
    field medicine.
        As our duty, and part of the continuum of care, the Mitchell Center
    for Repatriated Prisoners of War performs approximately 450 extensive
    evaluations per year on former POWs, their spouses and comparison
    groups. The results of these studies have facilitated the minimization
    of the development or worsening of post-traumatic stress disorder and
    other physical and mental conditions among former prisoners of war.
        NOMI is also is our service's lead on the Trauma Combat Casualty
    Care Committee. Civilian trauma experts participate in this Triservice
    Committee, which produces guidelines integrated into special operations
    curriculum. These guidelines have also been published as a chapter on
    military medicine in the most recent Pre-Hospital Trauma Life Support
    Manual. This manual is also being utilized by the civilian EMT-
    paramedic community to enhance first responder training and
    capabilities within police, fire, and rescue services.
        In fiscal year 2003, our schoolhouses prepared 8,732 medical
    department enlisted and officers to join the Fleet and Marine Corps
    medical components and to staff our Military Treatment Facilities,
    research commands and other support communities. Naval Medical
    personnel are ready to deploy wherever and whenever the Naval Services
    deploy, and much of the time are the only direct care providers in the
    field and especially at sea.
        In addition to preparing for the operational arena, our educational
    programs include learning opportunities in healthcare management,
    fiscal responsibility and efficient direct healthcare delivery. We are
    ensuring Force Health Protection by producing highly qualified,
    technically competent personnel to directly support the Navy and Marine
    Corps in any mission the Commander in Chief calls upon them to carry
    out.

              UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SCIENCES

        As the Executive Agent for the Uniformed Services University of the
    Health Sciences (USUHS) and a member of the Board of Regents, I am
    pleased to announce that the University recently received a ten-year
    accreditation with commendation from the Middle States Commission on
    Higher Education. This is a noteworthy accomplishment and it reflects
    well on the successful, on-going commitment of the University to
    provide the highest levels of professional health care education for
    our Nation's Military Health System (MHS).
        The quality of the USUHS alumni ensures that the intent of the
    establishing legislation, The Uniformed Services Health Professions
    Revitalization Act of 1972, is being realized. The military unique
    curricula and programs of USUHS, successfully grounded in a multi-
    Service environment, draw upon lessons learned during past and present
    day combat and casualty care. USUHS alumni, 3,421 physicians, 200-
    advanced practice nurses and 798 scientists, have become an invaluable
    and cost-effective source of career-oriented, dedicated uniformed
    officers. Our University graduates volunteer in large numbers for
    deployment or humanitarian missions; they serve proficiently in desert
    tents, aboard The Hospital Ship COMFORT, and during air evacuations.
    USUHS graduates embody the University's mission-driven goal of Learning
    to Care for Those in Harm's Way; they are equal to their sacred mission
    of providing care to our Nation's most precious resource--the men and
    women who serve in the Armed Forces.
        I would also like to take a moment to recognize the USUHS
    President, James A. Zimble, M.D., VADM, USN (retired), and 30th Surgeon
    General of the Navy, who has successfully guided our University for the
    past thirteen years. Dr. Zimble served our Nation for over 40 years,
    will retire in August of 2004. Under his leadership, the University has
    become the Academic Center for the Military Health System; during his
    tenure, the University has achieved peer recognition, on-going
    accreditation with commendation from 14 accrediting entities, and the
    Joint Meritorious Unit Award from the Secretary of Defense. He is a
    public servant who has unselfishly dedicated the better part of his
    life to Caring for Those Who Serve in Harm's Way. I wish him the very
    best in his well-deserved retirement. He will be greatly missed.

                              HEALTH CARE DELIVERY

        Naval Medicine continually examines our methods of delivering
    services to ensure that they are the best value for Naval Medicine, the
    MHS and our beneficiaries. We focus on increasing our efficiencies, but
    will never compromise clinical quality, access to care, customer
    satisfaction or staff quality of life to achieve that goal.
        This year the Bureau of Medicine and Surgery (BUMED) developed a
    business planning model that combined standard business planning
    methodology with an automated business planning tool. This new process
    requires all activities in Naval Medicine to develop, submit, and
    monitor a comprehensive annual business plan that is integrated with
    their existing financial plan. This methodology takes into account the
    changes in our financing due to the TRICARE for Life program, the
    prospective payment system and the TRICARE Next Generation contracts.
    The automated tool takes information from seven different data sources
    to help local commands and headquarters personnel identify variations
    in cost and productivity for the same services between MTFs. It also
    helps identify high cost, low productivity services provided at local
    MTFs. We are providing specialized training to the senior leaders in
    our MTFs, to ensure that their business plans optimally represent the
    size and diversity of services provided at their facilities. Our goal
    is to reduce the variation in cost and productivity between our MTFs,
    driving out inefficiencies that will result in increased cost savings,
    patient satisfaction and quality of medical care rendered.
        ``Family-Centered Care'' is one of the initiatives we have
    undertaken to provide best value for our beneficiaries. Family-Centered
    Care initiatives are intended not only to increase patient satisfaction
    and improve the delivery of care; they are intended to create
    partnerships between providers, patients, and their families by
    empowering patient's families to become active in the care plan. In the
    military, the definition of family must be expanded to include both
    immediate and extended family members as well as friends and the social
    support network of both single service members and spouses of deployed
    service members. Single service members create virtual families'
    through a social network within and outside their units. Family-
    centered care must incorporate this non-traditional type of family
    support in the delivery of care. By partnering with patients and their
    families, we can retain them in the direct health care system. This
    will enable Naval Medicine to provide families with the tools to
    develop and maintain healthy habits throughout their lives.
        Our first Family-Centered Care initiative includes significant
    improvements to perinatal services in order to integrate our young
    Sailors and Marines into our health care system during the time in
    which they are starting their families. Our MTFs have implemented
    numerous initiatives to provide increased quality of service for
    expectant women and their families. These initiatives include:
    increased continuity with providers through prenatal visits with small
    care teams or individual providers; encouraging our providers to work
    with patients to create a birth plan for their deliveries; providing
    private post-partum rooms where possible; providing 24/7 breastfeeding
    support; DEERS enrollment by the bedside; and establishing a system to
    provide seamless transfer of care between MTFs during permanent change
    of station moves for expectant women. These initiatives have been
    successful in encouraging our patients to choose to deliver their
    babies in our MTFs despite the fact that they now have the choice to
    seek perinatal care in the civilian community.
        In fiscal year 2003, Naval Medicine embarked on a global Case
    Management Program (CMP) in Navy MTFs. This program provided contract
    registered nurses and social workers to assist in the coordination of
    care for patients with complex illnesses or serious injuries. These
    professionals work with all disciplines within a medical treatment
    facility and within the TRICARE network to ensure that patients have a
    seamless transition in healthcare services, receive the proper referral
    to needed services and reduce the incidence of duplicate or unnecessary
    services. This program reduced health care costs, increased patient
    satisfaction and ensured high quality care for our beneficiaries.
        Naval Medicine initiated a third Radiology Residency Program at the
    Naval Medical Center in Portsmouth, VA. This proactively addressed
    staffing issues in the most critically understaffed and expensive
    medical specialty in the Navy, immediately improving access to imaging
    services in the short-term while providing long-term specialty
    availability.
        We have also invested in Pharmacy Automation Equipment at selected
    treatment facilities. This program leverages technology by using bar
    code scanners and computers to continuously track and monitor
    medication administered to our inpatients. This equipment greatly
    improves the safety of our patients by reducing the probability of
    unintended medication errors.
        We continue to fund new pilot projects designed to increase our
    effectiveness in providing healthcare services. With our new business
    planning tool, we will be able to quickly identify those projects that
    successfully increase productivity and share those improvements in all
    of the MTFs throughout Naval Medicine. It is our intent to continuously
    improve our patient care delivery systems to ensure the best health
    care for our beneficiaries.
        Patient safety is a top priority for Naval Medicine. Every MTF has
    a minimum of one full time staff member dedicated to coordinating
    command-wide patient safety initiatives. All of our MTFs participate in
    the MEDMARX system for medication error reporting that groups
    medication error events and near misses into five process nodes,
    allowing MTF staff to evaluate process changes that will increase the
    safety of medication administration. Naval Medicine also uses a
    standardized root cause analysis methodology that is used by both local
    MTF and headquarters staff to track and analyze trends in patient care
    systems that affect patient safety. All of our MTFs are required to
    submit monthly patient safety scores and receive a monthly Safety
    Assessment Score. These scores are used to assess overall MTF
    performance and are monitored closely.
        We maintain our high standards through rigorous reviews. Our
    medical treatment facilities are reviewed by leading accreditation
    agencies including the Joint Commission of the Accreditation of
    Healthcare Organizations (JCAHO), Accreditation Council for Graduate
    Medical Education; the College of American Pathologists and the
    American Association of Blood Banks.
        Naval Medicine has implemented through the JCAHO a major paradigm
    shift in the accreditation process of our MTFs: ``Shared Vision-New
    Pathways''. Shared Visions-New Pathways shifts the focus from survey
    preparation to continuous improvement of operational systems that
    directly impact the quality and safety of patient care. It is intended
    to force standards based process integration across all functional
    lines by using actual patient experience as a lever.

    DOD/VA Resource Sharing and Coordination: Status on Implementation of
            Presidential Task Force Recommendation
        Naval Medicine continues to support ongoing efforts implementing
    the Presidential Task Force recommendations to pursue sharing
    collaboration with the Department of Veterans Affairs specifically to
    optimize the use of federal health care resources. I believe our
    progress is one of our success stories. Site-specific sharing
    initiatives, including in the key geographical areas as directed by the
    fiscal year 2002 and fiscal year 2003 Defense Authorization Acts, are
    occurring and continue to be developed.
        Naval Medicine currently has 54 medical agreements, 34 Reserve
    agreements, 24 Military Medical Support Office agreements, and 13 non-
    medical agreements with the Department of Veterans Affairs. Naval
    Medicine has also partnered with the Department of Veterans Affairs on
    five medical facilities construction projects. These are:
      --1. Naval Hospital Pensacola FL.--This joint venture outpatient
            facility will be built on Navy property, and the VA will fund
            the project, and provide Naval Medicine with 32,000 square
            feet. This will be a replacement facility for Naval Medicine's
            aging Corry Station Clinic. Navy and VA have agreed on a site
            and negotiations continue on the amount of land to be allocated
            for construction and how services will be integrated to best
            serve both DOD beneficiaries and Veterans.
      --2. Naval Hospital Great Lakes, IL.--A fiscal year 2007 construction
            start has been proposed to build a separate Navy/VA Ambulatory
            Care Clinic on the grounds of the North Chicago Veterans
            Affairs Medical Center. Full integration planning has begun,
            with facility and site analysis to follow. The North Chicago
            VAMC is now providing emergency and inpatient services to Navy
            beneficiaries. Additionally, the North Chicago Veterans Affairs
            Medical Center will be available to the Navy for specified
            services with the Department of Veterans Affairs funding
            modifications of its surgical suites and urgent care
            facilities.
      --3. Naval Hospital Beaufort, SC.--A tentative fiscal year 2011
            construction start has been planned for a replacement hospital.
            The Department of Veterans Affairs currently operates a small
            clinic within the existing hospital, and is expected to be a
            partner in developing the replacement facility.
      --4. Naval Ambulatory Care Clinic Charleston, SC.--A fiscal year 2005
            construction start has been planned for a replacement clinic
            aboard Naval Weapons Station (NWS) Charleston. Navy has offered
            the Department of Veterans Affairs the options of an adjacent
            site onboard NWS or the take-over of the existing NWS clinic.
            The Department of Veterans Affairs is studying these options
            with a final decision to be made in the future.
      --5. U.S. Naval Hospital Guam.--A fiscal year 2008 construction start
            is planned for replacement of the current hospital. The Navy
            has offered the Department of Veterans Affairs a site for
            nearby freestanding community-based outpatient clinic. It's
            proposed that the Department of Veterans Affairs will fund the
            clinic, roads and parking, and will continue to utilize Navy
            ancillary/specialty care.
        Other examples of partnerships that show the depth and variety of
    our collaboration include the development of uniform clinical practice
    guidelines for tobacco use and diabetes last year, and development of
    hypertension and low back pain guidelines scheduled for 2004. Asthma
    guidelines are projected for revision in 2005.
        In the works is a VA/DOD agreement that would permit the use of
    North Chicago VA Medical Center spaces to establish a center to
    manufacture blood products in exchange for the use of these blood
    products. This agreement would alleviate the necessity for Naval
    Medicine construction costs for a new center at Naval Hospital Great
    Lakes. An agreement between the Bureau of Medicine and Surgery and the
    Department of Veterans Affairs headquarters to share each other's
    ``lessons learned'' databases is presently being developed.
        Aggressive investigation of other mutually advantageous resource
    sharing possibilities is on-going at all Naval Medicine facilities with
    the focus of providing of our beneficiary populations--military and
    veterans, the outstanding healthcare they deserve.

                   DEFENSE HEALTH BUDGET FOR FISCAL YEAR 2004

        One of Naval Medicine's greatest accomplishments is meeting the
    healthcare needs of all its beneficiaries--active duty, retiree, family
    members and eligible survivors. Nation-wide, healthcare costs are now
    increasing at the fastest rate in the last decade. Healthcare inflation
    continues to exceed inflation in other sectors of the economy.
    Utilization of healthcare services continues to increase as technology
    advances results in effective new--albeit sometimes costly--treatments
    and longer life spans.
        In addition, as the news of TRICARE's quality and effectiveness
    spreads, and as the costs of other insurance programs rises, more
    retirees under 65 are dropping other health insurance and relying on
    TRICARE. From the trends of the past few fiscal years, it's estimated
    that in fiscal year 2004 there will be a 5.2 percent increase in this
    population.
        DOD has ongoing programs that help control health care cost
    increases, such as building cost control incentives to managed care
    support contracts and competitively awarding these contracts for best
    value, and ensuring the pharmaceuticals delivered in our Military
    Treatment Facilities and through the TRICARE Mail Order Pharmacy
    Program are procured through using discounted federal government
    pricing. DOD and Naval Medicine management programs have also been
    utilized to ensure that healthcare provided to beneficiaries is
    reviewed for clinical necessity and appropriateness.
        Naval Medicine has worked hard to get the best value from every
    dollar Congress has provided, but your assistance is needed to restore
    the flexibility to manage funds across activity groups. Fencing sector
    funds prevents transfer of funds from MTFs to the private sector, but
    also prevents transfer of private sector funds to the MTFs. This
    fencing prevents funding MTFs to increase their productivity without
    the burden of prior approval reprogramming, which can take anywhere
    from three to six months. The T-NEX contract, with its incentive to
    move care into MTFs, makes having this flexibility all the more vital.
    Two-way flexibility between the private sector care and direct care
    accounts is necessary for revised financing to function successfully.
    The Navy appreciates the congressional intent to protect direct care
    funding, but we recommend that the fiscal year 2005 Defense
    Appropriations Act language remove the separate appropriation for
    Private Sector Care to allow the flexibility to move funds to wherever
    care is delivered without a Prior Approval reprogramming.

             TRANSITION TO THE NEXT GENERATION OF TRICARE CONTRACTS

        TRICARE Next Generation has provided sweeping improvements in its
    provision of TRICARE Benefits under contracting initiated this fiscal
    year. While there will be no significant benefit changes, it simplifies
    the old contracts, and provides performance incentives and guarantees.
    It also distinguishes health plan management, which includes such
    activities as financing, claims, payment rates, marketing, and benefit
    design, from healthcare delivery. Some major elements of the old
    TRICARE contracts have been sifted out into separate contracts to allow
    companies with particular competencies in these contract areas provide
    even better service and quality healthcare.
        The most obvious change is the transition from 12 regions to three,
    and enhancing leadership in each region by putting a Flag, General
    Officer or SES as director. This is a significant step in transforming
    TRICARE. These Regional directors have a key role in enhancing
    participation of providers in TRICARE and in implementing the plan to
    improve TRICARE Standard for those who choose to use it, and will also
    be responsible for integration of military treatment facilities with
    civilian networks, ensuring support to local commanders and overseeing
    performance in the region. Rear Admiral James A. Johnson, Medical
    Corps, is on board in the TRICARE West Region.
        Medical commanders within these regions will also have an enlarged
    role and additional responsibilities under the new contracts, with the
    focus on accountability. Commanders will take on responsibilities
    formerly managed by the TRICARE contractor, including patient
    appointing, utilization management, use of civilian providers in
    military hospitals, and other local services.
        The transition to the new TRICARE contracts in TRICARE West is
    going well, and all the services are working closely with TMA to make
    the transition phase as seamless as possible for our patients.

          CLOSURE OF U.S. NAVAL HOSPITAL ROOSEVELT ROADS, PUERTO RICO

        On February 12, 2004, U.S. Naval Hospital Roosevelt Roads, Puerto
    Rico officially closed its doors to patient care, ending more than 47
    years of healthcare service to Department of Defense beneficiaries. The
    last time a Naval Hospital closed was almost nine years ago when Naval
    Hospital Long Beach closed as a result of the Base Realignment and
    Closure.

                                    E-HEALTH

        Naval Medicine continues to be on the forefront of technology with
    the development of Naval Medicine Online (NMO). This website allows one
    tool for all of Naval Medicine to obtain and access information from
    anywhere around the world. This technology will be the key to knowledge
    sharing throughout Naval Medicine as an enterprise, allowing the right
    information to be obtained by the right people at the right time--
    whenever and wherever it is needed.
        NMO contains knowledge tools including File Cabinet that allows
    individuals to share documents and other electronic files; protected
    chat rooms that will allow users to have secure communications with
    patients or other Naval Medicine personnel and news services that
    provide information of relevance to the Naval Medical community.
        A key new function of NMO is the developer whiteboard. This tool
    allows Naval Medicine to leverage the brainpower of our workforce by
    placing software code in a secure area and allowing members of Naval
    Medicine to modify the code, making improvements useful to Naval
    Medicine. NMO also has online video teleconference capabilities and
    allows Naval Medicine personnel access to the Department of Veterans
    Affairs lessons learned database.
        The Navy Marine Corps Intranet (NMCI) is a long-term initiative
    between the Department of the Navy (DON) and the private sector to
    deliver a single integrated and coherent department-wide network for
    Navy and Marine Corps shore commands. Under NMCI, EDS and their
    partners will provide comprehensive, end-to-end information services
    for data, video and voice communications for DON military and civilian
    personnel and deliver global connectivity to make our workforce more
    efficient, more productive, and better able to support the critical war
    fighting missions of the Navy and Marine Corps.
        Naval Medicine is committed to transitioning to NMCI infrastructure
    and services where feasible. The Naval Medicine--NMCI shared vision is
    to create a single Navy and Marine Corps Enterprise-wide Network that
    provides seamless access to and exchange of comprehensive healthcare
    information throughout Naval Medicine and the Military Health System
    Community of Interest.
        The Naval Medicine--NMCI transition strategy incorporates four
    parallel endeavors. They are:
      --1. Transition of BUMED Headquarters into NMCI (800 Seats)
      --2. Transition of non-clinical Naval Medical Department Commands
            into NMCI (5,900 Seats)
      --3. Completion of a Composite Health Care System Computer-based
            Patient Record (CHCS II) NMCI Interoperability Beta Test at
            Naval Medical Center, Portsmouth, VA (72 Seats). The Military
            Health System's (MHS) largest, and most critical, network-
            centric information system, CHCS II forms the core of DOD's
            computer-based patient record initiative, and as such, is and
            will be broadly integrated across the enterprise at the center
            of the MHS healthcare delivery mission. The Beta Test will
            document infrastructure and network performance characteristics
            to include: Interoperability, Accessibility, Continuity of
            Business Operations, Quality of Service, Information Assurance,
            and Clinical Provider Productivity.
      --4. Transition of all clinical Navy Medical Department Commands into
            NMCI (38,300 seats).
        Naval Medicine is partnering with Electronic Data Systems (EDS),
    Science Applications International Corporation (SAIC), and Booz-Allen &
    Hamilton (BAH) to complete the financial analysis of our transition
    endeavors. We expect positive economies in transitioning to NMCI, which
    include robust information security, email server consolidation,
    network operations center consolidation, and uniform seat management
    services across the Naval Medicine Enterprise.

                                MEDICAL RESEARCH

        Naval Medicine also has a proud history of medical research
    successes from our laboratories both here in the United States as well
    as those located overseas. Our research achievements have been
    published in professional journals, received patents and have been
    sought by industry as partnering opportunities.
        The quality and dedication of the Naval Medicine's biomedical
    research and development 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 (tetanus 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
    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.
        Naval Medicine is developing new strategies for the treatment
    radiation illness. Adult Stem Cell Research is making great strides in
    addressing the medical needs of patients with radiation illness. The
    Anthrax attack on the Congress and others reminded us of the threat of
    weapons of mass destruction, to include 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, Naval Medicine 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.
        In this same line of research, Naval 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. 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 2001 anthrax attacks, Navy scientists 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 and contributed significantly to
    maintaining the functions of our government. The hand-held assays that
    are used by the DOD were developed at Naval Medical Research Center
    (NMRC). Currently NMRC produces hand-held assays for the detection of
    20 different biological warfare agents. These assays are supplied to
    the U.S. Secret Service, FBI, Navy Environmental Preventive Medicine
    Units, U.S. Marine Corp, as well as various other clients.
        Naval Medicine's overseas 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. 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
    Army's 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.
        Noise-Induced Hearing Loss (NIHL) is one of the most common
    military disabilities with over 353,116 new cases reported in 2003
    despite aggressive hearing conservation programs in the military.
    Military related NIHL is very costly. When disability costs for
    tinnitus and aircraft accidents related to communication problems are
    included, costs for military related hearing loss may exceed $1 billion
    annually. Additionally, NIHL may degrade warfighter performance,
    mission accomplishment, and survivability. Today's hearing conservation
    programs are based on fit and frequency dependent personal hearing
    protection devices (HPDs), engineering solutions, and noise avoidance;
    which are helpful but do not provide adequate protection around today's
    noisier weapons systems. Accordingly the Navy has taken the lead in
    research to elucidate the mechanisms underlying NIHL. The results have
    lead to the development of a safe oral nutritional supplement that has
    proven in laboratory settings to enhance resistance and healing to
    inner ear damage from noise. The efficacy of these nutritional
    supplements to prevent and treat NIHL is being studied in two joint
    military-civilian clinical trials lead by the Naval Medical Center, San
    Diego. If these trials succeed, we believe that a proven and effective
    treatment and prevention strategy, when combined with hearing
    conservation measures, could be dramatically reduced. A conservative
    estimate based on the robustness of the biological response in
    preclinical data suggests that a 50 percent reduction in hearing
    related injury is possible.

                        NAVAL MEDICINE AND SEA POWER 21

        Naval Medicine is totally committed to the Chief of Naval
    Operations' transformational vision for projecting decisive joint
    capabilities from the sea--Sea Power 21. Examples of transformation
    abound throughout Naval Medicine where hard work identifying
    efficiencies and cutting costs have resulted in opportunities to
    support recapitalization. These include the ongoing efforts to reduce
    variation in costs across our MTFs as well as among clinics within
    MTFs. Optimization efforts focusing on maximizing the fixed
    capabilities of our facilities to the greatest extent possible are
    active, ongoing, and will continue into the future. Transformation is
    not limited to shore facilities and includes remaking our fleet assets
    such as the reconfiguration of forward medical assets from cold war era
    fleet hospitals to the smaller, more agile and more flexible platforms
    and units described earlier in my statement.
        We are right sizing our active military force to the best mix of
    active, and civilian or contract personnel to bring the right
    capability to bear at the right time, and in alignment with the CNO's
    vision. We have reconfigured and integrated our Naval Reserve
    components to shape missions along with the active component, creating
    one force, assuring the very best use of the skills and talent our
    Reserve medical personnel bring to the mission. Further, Naval Medicine
    is committed to the growth and development of our people through
    investments in leadership that are directly in support of Sea Warrior
    by ensuring the right skills are in the right place at the right time.
        Naval Medicine will continue to seek aggressively opportunities to
    pursue efficiencies that improve our primary mission of Force Health
    Protection and do our part to return resources for recapitalization of
    the Navy. We are affecting positive change throughout Naval Medicine,
    embracing and implementing the CNO's vision for the Navy, and I am
    confident that we are on the correct course for the challenges ahead.

                                   CONCLUSION

        Naval Medicine has been successful in accomplishing its mission
    over the years, and with your support, the military benefit has become
    one of the most respected healthcare programs in the world. We know
    from Navy's quality of life surveys that among all enlisted personnel
    and female officers, the number one reason these service members stay
    Navy is the exceptional healthcare benefit.
        You have allowed us to provide our service members, retirees and
    family members a benefit that is worthy of their service, and clearly
    articulates the thanks of a grateful nation for their selfless service.
    With your support, 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.
        In just a few short months, I will leave this office, and will
    retire after serving more than 32 years in the United States Navy. I
    wish to thank this committee for its support to Naval Medicine, and to
    me during my time as the Navy's Surgeon General. It has been a
    privilege to serve.

        Senator Stevens. General Taylor, it is nice to welcome you
    back.

    STATEMENT OF LIEUTENANT GENERAL GEORGE PEACH TAYLOR,
                JR., SURGEON GENERAL, UNITED STATES AIR
                FORCE
        General Taylor. Thank you, Mr. Chairman. Mr. Chairman and
    members of the committee, it is a privilege and a pleasure to
    be here today.

                            OPERATION IRAQI FREEDOM

        Much has happened since we met here 1 year ago when we had
    just embarked on Operation Iraqi Freedom. A year later we have
    found that most of our concepts were validated. Some require
    more work, but most importantly the men and women of the Air
    Force Medical Service have again served their country with
    phenomenal talent, capability, and dedication. The lessons we
    have learned in Afghanistan, Iraq, indeed, wherever we are
    deployed, and even at home have helped us to hone our force
    central capabilities, ensuring a fit and healthy force,
    preventing illness and injuries, providing care to casualties,
    and sustaining and enhancing human performance.

                               MEDICAL READINESS

        We are doing many things to ensure our force is fit and
    healthy before they deploy. Our preventive health assessments
    and individual medical readiness program ensures that health
    requirements and screenings have been met before deployment.
    This program has been adopted DOD-wide and is clearly
    responsible, in great part, for the 4 percent non-battle
    disease injury rate in DOD that you have been hearing about,
    the lowest in history.

                       POST-DEPLOYMENT HEALTH ASSESSMENTS

        I would add that our post-deployment health assessments,
    equally important, are going extremely well. Our Active and
    Reserve component personnel have returned for deployments and
    nearly 99 percent have completed these assessments with a
    provider. Our people are coming back in better health because
    of individual disease prevention efforts but also because of
    the incredible deployment health surveillance program that all
    three of us have fielded. From our preventive aerospace
    medicine teams to our biological augmentation teams, we are
    helping to protect the area of responsibility from biological
    and environmental threats. We are using amazing technology such
    as our rapid pathogen identification systems (RAPIDS) which can
    determine the identity of pathogens in only a few hours. In the
    future, we hope to reduce this time even further through new,
    more advanced, indeed breakthrough genome-based technologies.
        We have shared with you over the past few years our success
    in our light, lean, and mobile expeditionary medical system,
    known as EMEDS, but before we left for Iraq a year ago, we
    realized EMEDS did not have the protection we needed for
    chemical weapons. Within 30 days, Air Force medics developed a
    mature nuclear, biological and chemical (NBC) treatment module
    that could care for 100 radiologic, biologic, or chemical
    casualties. This is the level of ingenuity we have in our armed
    forces in all the services.
        Your staff had the opportunity to view other technical
    marvels that are saving lives in the battlefield like the
    laptop size ultrasound machine, the ventilator that is the size
    of a football, a complete surgical package that fits in a
    backpack.

                             AEROMEDICAL EVACUATION

        Aeromedical evacuation continues to be the lynch pin in our
    deployed medical operations. In addition to the critical care
    air transport teams you have heard about, we continue to field
    patient support pallets that allow us to use all available
    airlift and have added an aeromedical evacuation center to our
    air operations center to allow smooth integration with all DOD
    and, indeed, allied air operations in the theater.
        From our perspective, the story of Private Jessica Lynch's
    rescue is an excellent example of the near seamless integration
    of the Air Force and our sister services. Following her rescue
    from an Iraqi hospital, Army medics, Air Force aeromedical
    evacuation troops, and special operations members transported
    her thousands of miles using three different aircraft and
    provided care in the air during her entire journey until she
    reached the safety of an Army hospital in Landstuhl, Germany,
    all accomplished in less than 15 hours. And this same scenario
    has repeatedly saved the lives of many other, less famous, but
    equally courageous young heroes.
        Together the three of us partner closely to see that health
    care from the foxhole to home station is seamless. Indeed, I
    would tell you that this is a case study in the application of
    the joint capabilities, the best of the Army, Navy, and Air
    Force, to meet our Nation's needs.

                                COMBAT MEDICINE

        Combat medicine is an ever-evolving art, and we cannot
    afford to coast for one minute on these successes. We recognize
    the critical value of developing new and better technology and
    enhancing human performance. Our human performance initiatives
    cross the spectrum from battling combat fatigue, to enhancing
    vision through corneal refractive surgery, to creating systems
    that will protect our pilots and our aircraft sensors from
    laser damage. While all these exciting high-tech programs are
    taking place, we are also quietly caring for our members and
    their families back home.

                                    TRICARE

        We anticipate the promising next generation TRICARE
    contracts to be a smarter way of doing business as revised
    financing methodology is fielded throughout all U.S. based
    military health treatment facilities. We are working hard with
    health affairs and the Congress to ensure that our incentives
    and our accountability are properly aligned for this increased
    and more flexible local responsibility for patient care funds.
    While we prepare for next generation TRICARE and for the
    enhancement of relationships with the civilian community and
    our partners in the Department of Veterans Affairs, we are
    always aware of the direct connection between this peacetime
    health care and the readiness of our troops.
        The Air Force Medical Service has answered the call and
    will continue to do so. We will work to resolve tough issues
    from the fiscal hurdles to challenges of recruiting and
    retention. And wherever we go to perform our mission, you can
    see the results of your support to the troops, and we thank you
    for this dedication.

                               PREPARED STATEMENT

        Finally, as the last witness and anecdotally, scarily I am
    going to be moving to the right-hand side of the table here
    this next year, I would like to take a moment to focus on my
    two comrades in arms. Jim Peake and Mike Cowan are two of the
    finest Americans I have had the pleasure to meet. There are
    really no finer examples of the American medic than these two
    gentlemen to my right. They dedicated the heart of their adult
    lives to the men and women in harm's way. We will miss them,
    and our Air Force wishes them godspeed and fair tail winds.
        Thank you, Mr. Chairman.
        [The statement follows:]
    Prepared Statement of Lieutenant General (Dr.) George Peach Taylor, Jr.
        Mister Chairman and members of the Committee, it is a pleasure to
    be here. When we last met, I described how our transformation efforts
    were saving lives during combat operations in support of the war
    against terrorism. The week before my testimony, we had just begun
    combat operations in Iraq. Now, a year later, major combat in Iraq has
    ended, but the mission and danger continue. Although many of my
    comments here today address the Air Force Medical Service's
    contribution to combat operations, I assure you that the care we
    provide to families and retirees is still of great importance. It
    continues to improve even as we are engaged in operations around the
    globe.
        And, of course, we truly are engaged around the globe. Like our
    sister services, every step in our transformation is to advance our
    ability to operate worldwide with lightning speed. This is reflected in
    the Air Force's six Concepts of Operation, or CONOPS. CONOPS are a
    statement of our desired end result, or effect, that the Air Force
    brings to the battle. The first three are Global Mobility, Global
    Strike, and Global Response. The others are Nuclear Response, Homeland
    Security and finally Space and Command, Control, Communications,
    Computers, Intelligence, Surveillance and Reconnaissance. That's a
    mouthful, so we refer to it as Space-C\4\ISR. The medics provide
    fundamental support to all six.
        Global Mobility, Strike, and Response CONOPS require the AFMS to
    provide medical care anywhere at any time to support humanitarian and
    warfighting operations. This demands that our medics travel fast and
    far, so they pack light, very light. Some of our Expeditionary Medical
    System medics travel with just a 70-pound pack. One small 5-person team
    carries enough to perform 10 life-saving surgeries in the field under
    battle conditions. And our aeromedical evacuation capabilities permit
    us to quickly fly into hostile environments, pluck injured members from
    the field, and fly out, often providing critical care in flight.
        The Air Force's Nuclear Response CONOPS provides a deterrent
    umbrella under which our conventional forces operate. Medics support
    this CONOP by ensuring that commanders can rely on the medical and
    psychological health of the human element of the nuclear force. We also
    develop plans for the care of casualties and refugees in a radiological
    event of a terrorist or national origin. We assess health hazards and
    provide recommendations to protect responding personnel or our
    combatants within any hazardous zone.
        The Homeland Security CONOPS recognizes that if someone attacks our
    homeland again, Air Force medical personal will be an invaluable asset
    bringing a wealth of manpower and expertise to the crisis. In such a
    contingency, our base clinics and hospitals become part of the local
    health care disaster network. They offer their ability to help local
    authorities detect and identify chemical, biological, and nuclear
    weapons, and we aid in the treatment of those exposed to them.
        The final CONOPS, Space-C\4\ISR, serves to integrate the other
    five. Simply put, it is the network of intelligence, sensors,
    satellites, and communications that allow us to orchestrate our forces
    worldwide. Every unit and every function of the Air Force is tied into
    this capability. Each contributes information to it and uses
    information from it. Air Force medics use this capability to monitor
    health threats worldwide, to coordinate care from combat to CONUS, and
    to maintain visibility of our patients no matter where they are within
    the joint medical system.
        We have now been in Iraq over a year. The AFMS has used this time
    to review its performance there through a Capabilities Review and Risk
    Assessment--a process that drives a hard look at our performance--from
    this process we learn what we did right; and what we can do better.
    These lessons learned help to hone our four central AFMS capabilities
    of: Ensuring a fit and healthy force; preventing illness and injuries;
    providing care to casualties; and enhancing human performance.
    Ensuring a Fit and Healthy Force
        The first capability we provide the Air Force is that of ensuring a
    fit and healthy force. Unhealthy troops cannot deploy. A commander who
    is short of troops cannot fight; cannot win. We keep troops healthy so
    commanders can do both.
        While providing a fit and healthy force is ultimately every
    commander's responsibility, the AFMS plays a critical role in defining
    what is fit, what is healthy . . . how do we get them that way, how do
    we keep them that way.
        Once recent step is the implementation of the Air Force Chief of
    Staff's revised fitness program--a significant change in fitness
    standards and how we monitor them. The program is now based upon push-
    ups, sit-ups, and a mile-and-a-half run. To this we add body
    composition measurements and a strong focus on unit exercise programs.
    This model includes the Guard and Reserve who must meet the same
    standards as their active duty counterparts.
        The program is only a couple months old, but we know airmen accept
    and appreciate it. They must like it--I find it much harder lately to
    find an open weight bench at the gym, so I know first-hand that our
    troops are enthused about the program.
        Fitness results will be available on the Air Force's secure web to
    commanders and leadership, allowing them to know in near real-time what
    percentage of our troops are fit to fight.
        Of course, our dedication to health goes far beyond a yearly
    fitness test. We employ a life-cycle approach to care. We surround
    troops with continual health monitoring and evaluations from the day
    recruits first put on an Air Force uniform, during every visit to the
    in-garrison or expeditionary clinic or hospital throughout their
    career, and especially during their transition to veteran status. We
    honor our commitment to our retirees; we are there.
        An important tool of ensuring a fit and healthy force has been our
    Preventive Health Assessment program. It ensures that at least once a
    year, every Airman has an assessment for changes in his or her health
    and for needed health screening or immunizations, and has the
    opportunity for a medical exam, if needed.
        Additionally, preventive health assessments are provided before
    members deploy and immediately upon their return. Such screenings were
    an interest item for both the DOD and Congress last year. We are
    pleased to report our success. For the 61,000 Air Force personnel
    deployed from March 1 through December 31, 2003, 99 percent completed
    their post-deployment health assessment--which included a face-to-face
    appointment with a medic and 97 percent had serum samples collected for
    submission to DOD repository.
        The medical information from all screenings and appointments is
    captured in an innovative information system called the Preventive
    Health Assessment and Individual Medical Readiness program, or PIMR.
    PIMR data, like that of our new fitness program, are available on the
    web to Air Force leadership worldwide.
        The next version of the Composite Health Care System--CHCS II--is
    another computer information system that will provide significant
    benefit to the AFMS as well as the entire DOD health care. Even in its
    current decade-old form CHCS is an amazing system. It captures every
    visit, prescription, lab result, and procedure provided to every
    patient.
        We first deployed CHCS in the late 1980s when computer screens were
    black and white and a mouse on your desk was cause for alarm. The
    upgraded CHCS II will have the look and feel of a web site. It will
    also be faster and easier to learn. More importantly, CHCS II will
    interface with the numerous other programs that have come on line since
    it was first introduced. CHCS II marches us down the path toward an
    electronic medical record that will solve many problems for us,
    including that of lost or fragmented medical records. Additionally,
    CHCS II will be deployable, so it will be the same program used in the
    field and at home.
        CHCS II, like its predecessor, will be deployed worldwide, accessed
    by thousands of users simultaneously, and contain the patient records
    of up to 8.8 million eligible beneficiaries. It is the largest health
    information system in the world--and an invaluable tool in keeping our
    troops--and their families--healthy.
        Once we have assured that only fit healthy troops are sent to the
    area of operations, we take great effort to ensure they stay that way.
    This falls to our next capability, that of preventing casualties.
    Preventing Casualties
        We are experiencing unparalleled success in the prevention of
    illness and injury during Operation Iraqi Freedom. A telling example of
    this success is our low Disease Non-Battle Injury Rate--we call it the
    ``D-N-B-I rate'' for short. The DNBI rate describes the percentage of
    troops who become sick or hurt from things other than enemy activity;
    things like dental problems, car accidents, the flu, broken bones,
    etcetera.
        Historically, more troops are removed from battle because of
    accidents or illnesses than from enemy fire. In Operation Desert Storm,
    the DNBI rate was about 6 percent. During the current Iraqi conflict,
    only 4 percent (DOD rate) of illnesses and injuries were non-combat
    related. This is the lowest DNBI rate in history. We seek ways to make
    it lower yet. One of our doctors in Iraq jokingly suggested that if we
    were to cancel intramural basketball games in theater we could
    eliminate many sprained ankles and drop that DNBI rate another percent.
    The important point is that we continue to address all the challenges--
    including sports injuries--that reduce our combatant capabilities.
        Much credit for the low DNBI goes to the preventive health
    assessments and pre-deployment screenings I mentioned. These allow us
    to identify personnel with pre-existing or uncontrolled medical
    problems; conditions that would worsen under the stress of deployment.
    These folks--if allowed to deploy--are a huge source of DNBI. By
    pulling them out of the deployment line and caring for them back home
    in-garrison, we not only decrease the DNBI rate, we also ensure these
    members get the health care they need to make them worldwide-qualified
    in the future.
        The Deployment Health Surveillance program is another critical
    piece of preventing casualties. Before airmen arrive in large numbers
    to establish a base in foreign territory, a special team of medics--
    called the Preventive Aerospace Medicine, or PAM team--has already been
    there. They have surveyed the environment for biological and
    environmental threats, and have stood up surveillance equipment to
    detect and identify such threats.
        When it comes to total ``battlespace awareness,'' PAMs and another
    EMEDS team called the Biological Augmentation Team, or BAT team, are
    invaluable. These teams take on the same importance as the radar,
    intelligence, and security specialists whose mission it is to detect,
    identify, and deter enemy attacks. In the same manner that a radar
    operator surveys the skies for threats, our medics survey the
    environment with equipment to detect chemical, biological, radiological
    or nuclear--CBRN--threats. In combat, speed counts. That radar operator
    must detect the presence of an airborne object and then quickly
    identify it--friend or foe. The sooner that operator can do both, the
    faster we can react--the safer our people are. In the same way, our
    teams and their equipment act quickly to detect, identify, and counter
    CBRN threats.
        For example, it used to take up to a week to detect and confirm the
    presence of dangerous biological and chemical weapons--too long.
    Imagine a biological agent loose in one of our bases in Iraq for a week
    before we were able to identify and contain it. Even the most
    conservative estimates predict that 30 percent of our troops would
    become seriously ill or worse.
        With RAPIDS technology, we eliminate the deadly delay between the
    time a pathogen is released and when we become aware of its presence.
    The aptly named RAPIDS stands for the Rapid Pathogen Identification
    Systems; a fielded and proven system that can determine the identity of
    pathogens within a few hours; much better than 4 to 7 days it used to
    take. Using new genome-based technologies, we hope to reduce the time
    even further.
        Another tool in the Air Force Medical Service toolbox is the Global
    Expeditionary Medical System, or GEMS. This rugged, laptop-based system
    serves as a deployable, electronic medical record for every patient
    encounter in the combat zone. To date, it has logged nearly 107,000
    patient encounters in Afghanistan and Iraq. But it does more than that.
    It also tracks chemical, physical, and radiological hazards and even
    tracks the results of food inspections and living conditions in the
    field. GEMS provides commanders a theater-wide overview of the health
    of their forces. Its sophisticated epidemiology tracking features allow
    it to identify potential disease outbreaks very early in the courts of
    outbreaks or a chemical or biological attack.
        I have described systems and processes we have in place that ensure
    oversight of our airmen's health before they deploy, while they are in
    the field and even after they return. But we must remember that combat
    is inherently dangerous. In spite of our best efforts to prevent it,
    some of our troops will fall ill, and some will be wounded. Thus the
    critical need for our third capability; that of restoring the health of
    the sick or injured--casualty care.
    Casualty Care
        We have completed the conversion of our large-footprint field
    medical facilities into small, rapidly deployable Expeditionary Medical
    System--or EMEDS--units. Our performance in Iraq validates that the
    EMEDS concept works. It saves lives.
        These units can be found throughout the area of operations. They
    often provide care from the point of injury, at tented facilities
    removed from the front, and during aeromedical evacuations as they
    transport the patient from the theater entirely. When the U.N. Building
    in Baghdad was car bombed last August, killing 20, EMEDS surgeons and
    their staff were only minutes away, and cared for numerous injuries on
    the spot.
        Shortly before the start of combat operations in Iraq we added a
    new capability to EMEDS; hoping against--but preparing for--Iraq's
    potential use of chemical weapons, we created EMEDS Supplemental NBC
    Treatment Modules--or NBC pallets, as our troops call them. Each module
    contains 25 ventilators and medical supplies to care for 100
    radiological, biological, or chemical casualties. I find it
    extraordinary that it took only 30 days for these packages to mature
    from the concept stage until the first pallet was loaded onto an
    aircraft for delivery.
        While NBC pallets provide the tools to treat NBC casualties, the
    EMEDS' hardened tents and infrastructure offer a protective shelter in
    which our medics can render that care. Each can be equipped with
    special liners and air handling equipment that over-pressurizes the
    tents' interiors. Clean, filtered air is pushed in; contaminated air is
    kept out. Protected water distribution systems work the same way,
    ensuring a safe, potable water supply even in contaminated
    environments.
        I continue to be impressed with the enabling technologies that
    permit the development of things like Push Pallets or advanced air and
    water-handling systems. During operations in Iraq we have relied on
    these and other technical marvels, like a lap-top sized ultrasound
    machine, a ventilator unit the size of a football, and a chemistry
    analyzer that--during Desert Storm--required its own tent; now it fits
    in the palm of your hand. Our people are saving lives with these
    technologies around the globe as we speak. There are EMEDS operating in
    Iraq and 11 other countries in support of Air Force operations.
        Operation Iraqi Freedom also validated our new aeromedical
    evacuation concept of operations. A significant advancement in this
    mission is our ability to take advantage of back-haul aircraft, which
    has tremendously accelerated the aeromedical evacuation process. This
    has eliminated the need for patients to wait days for a designated C-9
    or C-141 aeromedical evacuation mission to pass through their area.
    Patient Support Pallets--or PSPs--make it far easier to turn any Air
    Force mobility aircraft into an aeromedical evacuation platform. PSPs
    are a collection of specially packed medical equipment that can be
    installed into cargo and transport aircraft within minutes. The plane
    that just landed to deliver weapons is quickly converted to carry
    wounded patients.
        Let me share with you an example of PSPs work. In Baghdad, a 5-
    year-old, deathly ill Iraqi girl was brought to one of our allied
    locations. She was scheduled to fly to Greece for medical treatment.
    Her condition was so poor that upon arrival at the clinic she was
    placed on a ventilator. Doctors determined she was too ill to survive
    and she was removed from the flight. One of our nearby medics heard of
    the situation. He determined that leaving that little girl behind to
    die was simply not an option. He, and other members of his Aeromedical
    Evacuation team, grabbed one of our PSPs--we have 41 of them
    strategically placed around the globe--and within an hour had converted
    a section of the Greek aircraft into a small critical care bay. Their
    precious cargo was loaded--with her ventilator--and she was flown to
    Greece to receive care. We are the only country in the world that can
    do this on a regular and sustained basis for our military personnel.
        This demonstrates that PSPs allow us the flexibility to convert not
    only our own aircraft into AE platforms, we can also take advantage of
    our allies' aircraft. This dramatically increases the availability of
    aeromedical evacuation opportunities to our troops. It's like one of
    our medics told me: ``If it flies, and we have elbow room, we can do
    our thing. Our thing is saving lives.''
        The medic I spoke of is a member of one of our Critical Care Air
    Transport Teams. We call them CCATS. These CCAT teams are comprised of
    a physician, a nurse, and a cardiopulmonary technician. They are
    specially trained to work side-by-side in the air with our aeromedical
    evacuation crews to provide critical care under the extremely difficult
    environment of flight.
        Recently, one of our aeromedical evacuation crews augmented by a
    CCAT team flew into Baghdad on a C-130, under black-out conditions and
    while taking fire to retrieve three severely wounded soldiers. These
    troops, too, needed ventilators to help them breathe. They were quickly
    loaded and even before the aircraft could take off again, our CCAT
    teams were providing life-saving care to their patients. While in the
    air, the aircraft was diverted to Talil where U.S. forces had come
    under attack. Two more men were critically wounded there and needed
    immediate aeromedical evacuation. Both of these troops also required
    ventilators.
        All five soldiers were flown that night to an Army medical facility
    in Kuwait. The Air Force medics on that mission are proud of their
    accomplishment--never before, or since, has there been a combat AE
    mission in which a team cared for five patients on ventilators in one
    aircraft. I'm proud of them, too. Without the AE concept and the skills
    our medics brought to the theater, each of those five soldiers would
    have succumbed to their injuries.
        Another enhancement to our aeromedical evacuation capabilities is
    the placement of an AE cell in the Air Operations Center. This permits
    the smooth integration of our actions with all other DOD or allied air
    operations in the theater. The story of Private Jessica Lynch's rescue
    provides a famous example of how all these assets--the AE cell,
    aeromedical evacuation crews and CCATS, patient support pallets, and
    the use of backhaul aircraft--all come together in a successful
    operation. Following her retrieval from the Iraqi hospital, Army
    medics, Air Force Aeromedical Evacuation troops, and Special Operations
    members transported her thousands of miles, used three different
    aircraft, and provided care in the air during her entire journey until
    she reached the safety of an Army hospital in Landstuhl, Germany. All
    this was accomplished in less than 15 hours.
        Like so many of our missions, Jessica Lynch's AE mission could not
    have been accomplished without the near-seamless integration of our
    sister services. Medical and AE operations serve as the perfect example
    of the joint application military capabilities.
        I also must give praise to the backbone of our AE capability, our
    Guard and Reserve. Fully 87 percent of our AE structure is Air Reserve
    Component members. They have assisted their active duty counterparts in
    transporting over 13,700 patients from OEF and OIF, of which about
    2,300 were urgent or priority missions.
        As I hope I have made clear, EMEDS capabilities span the geography
    of operations from the farthest forward immediate surgical capability,
    throughout the area of operations, to include aeromedical evacuation to
    facilities around the globe. EMEDS has vastly improved how we care for
    casualties, but we still face challenges. Perhaps one of the most
    significant of which is caring for victims of weapons of mass
    destruction.
        Although this country has recently seen two bio-chem attacks--the
    anthrax attack two years ago, and the fortunately unsuccessful ricin
    scare of January--we have yet to experience a large scale Weapons of
    Mass Destruction attack. Therefore, we can never know just how
    successful our response to such an attack will be. I guarantee our
    response would be superior to any other nation's on earth--but we
    always strive to expand the envelope of our nation's capability.
        To enhance our response even more, AFMS personnel are implementing
    Code Silver. Code Silver is a program that offers tabletop exercises
    emphasizing biological and chemical warfare responses by our medical
    facilities. We will focus on how our facilities interact and relate to
    the rest of the base and with the local civilian community. Forty Air
    Force medical facilities and the communities surrounding them will
    participate in Code Silver exercises in 2004.
        The fourth and critical capability we bring to the warfighter is
    the enhancement of human performance.
    Enhance Human Performance
        As the size of our military decreases and the capability of each
    individual platform increases, the relative importance of every
    individual also increases. Today's airman receives superior training so
    that they can maintain and operate the most sophisticated equipment and
    weapons systems in the world. But the stress and exhaustion of combat
    operations leads to fatigue. Fatigue dramatically erodes the Airman's
    ability to react quickly and think clearly. It eliminates the
    intellectual and technological advantages we bring to the battle.
        Commonly used methods of combating fatigue involve careful studying
    of our airmen's mission schedules, their diets, sleep patterns, even
    their biorhythms, to mitigate the impact of drowsiness upon their
    missions. These are all important to maintaining wakefulness, because
    at the very least, fatigue degrades mission performance. At the very
    worst, it kills. In battle, fatigue is a deadly enemy.
         We also find we can enhance human performance by enhancing vision.
    We do so through corneal refractive surgeries--commonly known as PRK
    and LASIK. These procedures are provided to non-flying and non-special
    duty airmen. We began offering them after an exhaustive literature
    review and extensive expert conference conclusions revealed that the
    operations are, indeed, safe, effective, and potentially cost-saving.
    In the near future these procedures will be offered to some aviators
    and special duty members. We continue to study corneal refractive
    surgeries to see what the effects of time or the stresses of the
    cockpit--like pressure changes and jarring--have on our flyer's eyes.
    The results thus far are highly encouraging. One thing is for sure,
    they are very highly desired by our troops.
        Good eyesight is, of course, critical to our forces. An enemy who
    can temporarily or permanently blind one of our troops will have
    succeeded in removing that Airman from combat. One method for
    inflicting such an injury is through directed energy, or lasers. In the
    little-more-than 40 years since the laser's invention, it has grown
    from something found only in a few science labs and an occasional James
    Bond movie, to a technology so common that one can find lasers in every
    supermarket scanner, in DVD players; and I have even seen them sold as
    cat toys. Lasers are also weapons--and are capable of injuring or
    destroying eyesight. The proliferation of lasers poses a growing threat
    to our pilots and troops.
        In response to this challenge, we have created protective eyewear
    and faceplates that absorb and deflect laser light. The devices save
    our pilots from damaging and potentially permanent eye damage from
    these weapons. We continue to study ways to detect the presence of
    lasers in battlespace and methods for protecting our men and women
    against them.
        Another challenge we encounter in enhancing human performance is
    our need for ever-increasing amounts of information and communication;
    especially that which flows between our EMEDS troops on the ground, our
    aeromedical evacuation crews in the air, and our medics in permanent
    facilities who receive patients from the area of operations. Our
    success at converting any transiting mobility aircraft into an
    aeromedical platform outpaced our ability to create the information
    systems to track the patients using them. It is difficult to keep
    oversight of the location and condition of thousands of patients on a
    worldwide scale.
        Fortunately, the U.S. Transportation Command Regulating and Command
    & Control Evacuation System or TRAC\2\ES [Tray-suhs] is helping us
    overcome that challenge. TRAC\2\ES is a DOD information system that
    allows us to track the location and status of patients from the moment
    they enter the aeromedical evacuation system in the theater of
    operations, as they fly to a higher level of care, until they are
    safely back in a garrison medical facility.
        I have described some of what we learned during current operations
    in Iraq, but before closing, I would like to mention a few our
    successes here on the home front.

                                 THE HOME FRONT

        We are always developing avenues to provide great and cost-
    effective care. One way to do so is to seek out partners who share our
    dedication to the care of patients and can join us in a better way of
    doing business. We continue to strengthen just such a relationship with
    our partners at the Department of Veterans Affairs. Of the seven
    current Joint Ventures between the DOD and VA, four of them are at Air
    Force medical facilities: Elmendorf in Alaska, Travis in California,
    Kirtland in New Mexico, and Nellis in Nevada.
        These are not the only locations in which the VA and DOD work
    together to provide care. We are pursuing several additional Joint
    Venture locations and already have nearly 140 sharing agreements
    between the Air Force and VA throughout the United States. These are
    great examples of partnering with the VA.
        We are also developing the exciting possibility of expanding the
    traditional concept of Joint Ventures to other major healthcare
    institutions. For example, we believe that a unique three-way joint
    venture between the DOD, VA and the University of Colorado Hospital
    will be a cost-efficient way of caring for all our beneficiaries. This
    concept is receiving not only strong support from DOD leadership and
    local VA officials, but also all of the Colorado Veterans organizations
    and the Colorado state congressional leadership.

                       NEXT GENERATION TRICARE CONTRACTS

        We are passionate about our mission and confident of continued
    success, yet there are some uncertainties in the future that warrant
    mention. As you know, the DOD is in the process of fielding new
    contracts to replace our original TRICARE contracts. This transition is
    the focus of a great deal of management attention. Our ability to
    smoothly change contractors and governance will be closely watched by
    our stakeholders. Not only will there be just three TRICARE regions,
    revised financing will be expanded nationwide.
        This is a methodology to place the entire costs of a TRICARE
    enrollee's care in the hands of the local Medical Group Commander. She
    pays the private sector care bills as well being responsible for the
    direct care system--that care we provide to our enrollees in our Air
    Force clinics and hospitals. Revised financing has proven to be an
    effective tool in those regions where it is currently being used. This
    is an important advance, leveraging what we've learned in allowing the
    Commander to select the most effective and most efficient location for
    health care. So, the dollars allocated to the direct care system are
    critical, but just as critical are the dollars allocated for revised
    financing. With this in mind, two-way flexibility between the private
    sector care and direct care accounts is necessary for revised financing
    to function successfully. The Air Force appreciates the congressional
    intent to protect direct care funding, but we recommend that the Fiscal
    Year 2005 Defense Appropriations Act language remove the separate
    appropriation for Private Sector Care to allow the flexibility to move
    funds to wherever care is delivered without a Prior Approval
    reprogramming.

                                     BUDGET

        For fiscal year 2004, the Congress's budget adequately funds our
    direct care system. However, we do have challenges with the private
    sector care budget--the health benefits purchased from civilian
    providers for our TRICARE beneficiaries. The TRICARE Management
    Activity (TMA), not the Services, manages all of these funds to include
    those for Revised Financing.
        Two issues will pose significant fiscal challenges as we try to
    estimate what our private sector care costs will be.
        The first issue is the increased use of TRICARE. TRICARE offers a
    very comprehensive benefit. With civilian healthcare plans raising co-
    pays and cutting back on benefits, more retirees are dropping their
    civilian healthcare and are relying exclusively on TRICARE. As more
    people opt for our heath care program, costs for the entire TRICARE
    benefit rise. Correctly forecasting this cost is crucially important
    and placed pressure on the Department to handle these increases.
        In addition to the enhanced TRICARE benefits the Department of
    Defense offered to activated Reserve Component members and their
    families during fiscal year 2003, the National Defense Authorization
    Act of Fiscal Year 2004 included even more new benefits. Because the
    new reserve health program is temporary, it offers us the ability to
    assess the impact of these benefits after the trial period. We will
    review the effects of these programs on reservists and their families
    as they transition to and from active duty and look at the overall
    effect on retention and readiness. We have concerns that health care
    benefits will be enhanced permanently before a full assessment of the
    impact can be completed, as well as concerns over the potential cost of
    new entitlements for reservists who have not been activated.
        Consideration must also be given to the impact on the active duty
    force if similar health care benefits are offered to reservists who are
    not activated. OMB, DOD and CBO are working together to develop a model
    and a resulting five-year cost estimate to price the proposal to expand
    TRICARE health benefits for all reservists without regard to
    employment, medical coverage, or mobilization status as proposed in the
    Reserve and Guard Recruitment and Retention legislation. Preliminary
    results indicate that this could range from $6 billion to $14 billion
    over five years. Final scoring of this proposal should be completed by
    the end of March.
        The influx of retirees and their families and of increased Guard
    and Reserve beneficiaries have greatly increased private sector care
    costs, which DOD will meet with internal reprogramming actions.
        These bills are a must-pay, and they affect far more than our
    ability to provide the right care at the right place in the most
    efficient manner. Care for our military families is not just a medical
    issue--readiness is inseparable from family health. It is unmeasurable,
    but undeniable, that an Airman's physical and mental fitness to deploy
    is tied to the well-being of his or her family. We must provide our
    troops piece-of-mind that in their absence their loved ones will have
    their social, mental, and health care needs met.
        A final challenge we encounter in providing care is that of the
    recruitment and retention of our active duty and reserve component
    medical professionals, especially physicians, dentists and, nurses. The
    civilian health care environment offers significantly more attractive
    financial incentives than the Air Force, and we appreciate your support
    of recruitment and retention bonuses, special pay programs, and
    critical tools such as the Health Professions Scholarship Program and
    the Health Professions Loan Repayment Program. These are vital to our
    ability to attract qualified professionals and keep them in the Air
    Force.

                                    SUMMARY

        No other military in the world has the expertise, willingness to
    devote the resources, or the capabilities of the United States when it
    comes to caring for troops and their families, in times of war or in
    peace.
        One of our medics--a surgeon--just returned from four months in
    Baghdad. He was asked, ``What one word sums up your experiences
    there?'' He said, ``Satisfied . . . I was caring for people who put
    their lives on the line for this country. I know that I made a
    difference. That is satisfying.''
        It truly is satisfying to make a difference. We do. And we are
    proud to bring the special skill of Air Force medics to the service of
    our warriors--both present and past--and to their families. I thank you
    for your continued support of our medical service and our Air Force. We
    are proud to make a difference, and we are anxious to answer the call
    again.

        Senator Stevens. That was very generous, General, and
    deserved. Of course, Senator Inouye and I hate to see such
    young men retire.
        I do not expect it right now. There is no rush, but when
    this pace slows down, I would like the committee to have sort
    of a flow chart on how you decided to disperse the wounded from
    Afghanistan and Iraq. We have medical facilities in Europe. We
    have them in Tripler. We have them in Alaska. We have them
    here. And I wonder if we developed a plan to utilize the full
    scope of our facilities, given the air transport that is
    available today and its worldwide capabilities. But no rush,
    just sort of a long-range study to see what we did and see if
    there is some way we might help you to do it better for the
    interest of the people involved.
        I have the impression that the worst cases have come to
    Washington. General, is that right? Have the worst cases come
    to Bethesda and Walter Reed?
        General Peake. Sir, initially that was absolutely the case.
    Now as our units are back and the soldiers are flown through,
    we regulate them to wherever they need. If it is burn
    treatment, they will go to Brook. If the care is available and
    they live near or at Fort Hood, they will go to Fort Hood. It
    just depends on the level of the severity of their injuries.
    Any of our medical centers really can take care of fairly
    sophisticated injuries.
        What we did was concentrate our amputee care at Walter Reed
    because we wanted to have the absolute best. It really started
    with Afghanistan, which was the most heavily mined area in the
    world, and we therefore anticipated the potential for having
    amputees. So we married up with the Veterans Administration
    (VA) and all the smart people that we could find and focused
    that as an area of a center of excellence.
        Senator Stevens. Well, it is my impression that because of
    body armor and better helmets, we are having more real serious
    injury to the limbs of our service men and women. Is that
    observation correct?
        General Peake. Sir, I think that is correct. Really as the
    article talked about yesterday that Senator Leahy mentioned,
    what we are seeing are folks with bad extremity injuries and
    head and neck injuries who otherwise would not have made it to
    us because their thorax would have been injured as well. Now
    they are making it through to the definitive care for their
    amputees.
        Senator Stevens. Has the surge to Bethesda and Walter Reed
    been such that it has required reallocation of funds?
        General Peake. Sir, we have put a lot of money into the
    amputee center specifically to get that ginned up. This c-leg
    that was referred to can cost anywhere from $80,000 to $100,000
    for a single limb, but that is what we are doing. It is the
    right thing to do and we will continue to do that. Truly we
    have been augmented with GWOT funds, global war on terrorism
    funds, out of the supplemental last year because these are
    operational issues not programmed issues. In fact, I am
    anticipating getting another $244 million this year from
    somewhere in DOD to be able to--because that is what we are
    spending--prosecute the medical aspects of the global war on
    terrorism.
        Senator Stevens. Are the facilities that we were able to
    put into Ballad modern enough and capable enough to take a
    substantial part of this surge?
        General Peake. Sir, we have modular combat support
    hospitals in Ballad, in Baghdad. In Ballad, they are in
    basically deployable medical system (DEPMEDS) facilities. In
    Baghdad, we have moved them into one of Saddam Hussein's old
    hospitals. We have them in DEPMEDS facilities at Mosul and
    Tikrit, as well as what we have down in Kuwait. So we have
    created a system----
        Senator Stevens. I do not want to belabor this. Sometime I
    would like to pursue it and see what the schedule is and how
    that flow was from those facilities into more permanent
    treatment facilities and how quickly these people got back near
    their homes.
        We had understood that the facilities in the Washington
    area have started to limit new beneficiaries. Are new enrollees
    now being turned away? I am not talking about people coming
    back from the war zone, just new enrollees of people who are
    eligible for treatment.
        General Peake. Sir, we have limited enrollment in the
    military treatment facilities with capacity. What you want to
    be able to do is appropriately treat the people that you have
    enrolled and give them that care. They can still enroll in
    TRICARE within the civilian part, the contractor part of the
    managed care system under TRICARE Prime.
        Senator Stevens. These are primarily retirees.
        General Peake. Yes, sir.
        Senator Stevens. Is that part of the problem of taking care
    of the increased surge from the war zones?
        General Peake. No, sir. It is not part of that.
        Senator Stevens. It is a limitation of the facilities
    themselves to take on the new retirees?
        General Peake. It is the facilities and the staffing and so
    forth.
        Senator Stevens. And TRICARE for Life.
        General Peake. Right, sir.
        We have an increase in unique users across our system. If
    you look at our retirees, just the retirees over and under 65,
    from 2000 to now, it is about a 60 percent increase in retirees
    of unique users.
        Senator Stevens. I will move on to my co-chairman, but this
    committee was critical of the number of hospitals that were
    closed in the last base closure round and urged that some of
    them be maintained as satellites for other military health
    facilities. Are you considering reopening any?
        General Peake. Sir, our manpower came down 34.5 percent in
    the Army from 1989. So you have to be able to staff a hospital
    to run it. It is really the people not just the facilities.
        Senator Stevens. I will get into that later.
        Senator Inouye.
        Senator Inouye. Thank you.

                              NON-COMBAT INJURIES

        General Taylor just reminded me of an article I read a few
    weeks ago that more men in the Revolutionary and Civil Wars
    died as a result of dysentery, more than bullets. What
    percentage of the personnel who are now being hospitalized are
    hospitalized for non-combatant injuries?
        General Taylor. Do you know the percentage? The only number
    I can give you is the idea of the people that we moved through
    the aeromedical evacuation system. Of the 15,000 or so people
    we moved from the air evacuation system this last year, between
    3,000 and 4,000 were for battle injuries. The rest were for
    disease non-battle injuries. That gives you some estimate. It
    is probably somewhere on the order of one-quarter to one-third
    are actually due to battle injuries. The rest are disease non-
    battle injury (DNBI) rates.
        The interesting part, as General Peake said, is the chance
    of dying in theater is much less than historically we have ever
    had, and Jim probably has the statistics on that to tell you,
    if you are injured in battle, if you make it to a medic, what
    your chances of surviving are. Jim, do you want to add to that?
        General Peake. Sir, our killed in action (KIA) rate is
    about 13 percent. If you look at the theater of operation in
    Iraq, it is what the KIA rate is, compared to about 20 percent
    as what we have run historically from a KIA rate.
        But you are right, sir, about the importance of DNBI and
    our preventive medicine measures. We actively review that and
    pursue it. I will give you an example of having to do with eye
    injuries. Our chief in his rapid fielding initiative for our
    soldiers insisted that every soldier get the Wiley X protective
    glasses. I have had two e-mails from the field now talking
    about how our eye injury rates have dropped down. We had
    studied our injuries coming back and had 99 serious eye
    injuries just because of lack of ballistic protection for the
    eyes. That has changed dramatically and part of it is because
    we have got leaders like Pete Chiarelli as the 1st Cavalry
    (Cav) commander who said we will wear the eye protection. That
    is one of your checkpoints as you go out on patrol. So those
    kinds of things are important.
        But if you think about the population we have got over
    there, it is 150,000 people, and so people get sick. People
    have routine injuries. There are motor vehicle accidents. When
    you burn the latrines, you have people that get burned in
    fires. Those kinds of things are part of what we are seeing and
    we wind up taking care of all of that as it comes back through
    our system.
        Admiral Cowan. Sir, if I could add to that. We used to
    accept DNBI as sort of, well, that is just the way it is, and
    we do not anymore. So our efforts are very aggressively aimed
    at making it no more dangerous and no more likely to become
    sick or injured when deployed than if you were at home.
        It does not just start when we deploy. Our attention to the
    health and the fitness to include the flexibility, endurance,
    social stability, family stability of each of our individuals
    to help them go be those sticky soldiers and sailors and airmen
    that will stay in the field and have the capability to do so.
    So that is very much the thrust of force health protection, to
    drive those DNBI's down. Part of it is putting healthy people
    out there that are likely to survive.
        Senator Inouye. Do we have enough research money to look
    into this matter?
        Admiral Cowan. I would say that there are always more
    projects that could be done. I think the money that we have now
    has allowed us to focus on near to midterm research development
    and ultimately acquisition that gets to the issues that we know
    to be the most important. There are others out there that more
    resources would allow us to get to and probably concentric
    circles of greater research risk. So no absolute money would be
    enough or too much.

                         PROTECTIVE BODY ARMOR RESEARCH

        Senator Inouye. I would like to follow up on the chairman's
    questioning. We have been advised that additional research is
    now being done to develop protective body armor for extremities
    and for the head. Can you give us any status report on that?
        General Peake. Sir, I have had the program manager for the
    helmet project over in the office and married him up with our
    head and neck consultant so that we could evaluate the kinds of
    injuries that we are actually seeing with what he is projecting
    for the next generation of combat helmets. Already we have
    improved the helmet from what we had even in Desert Shield/
    Desert Storm with better protection inside and better ballistic
    protection from rounds. So we are marrying them up.
        One of the discussion points is what kind of face
    protection that we could have because we have folks standing
    outside the hatches when they are on patrol as an example. So
    the medics are not the primary developers of the body armor,
    but we are actively collaborating.
        The Armed Forces Institute of Pathology is analyzing the
    body armor that comes back to understand where the
    vulnerabilities are. We know already that the axilla is an area
    where it can be penetrated. It saves you from a front-on hit,
    but it can come through the side as an example. So they are
    looking at ways to modify and increase the protection for
    soldiers in that regard.
        Admiral Cowan. Sir, we have a combat registry that was
    initiated by the Army--and all services use it now--that allows
    us to track, in a statistical way, patterns of wounding. For
    example, we are finding with improvised explosive devices that
    the Iraqis are using at the roadside, that our soldiers get
    blasts from above. A helmet does not help. They get eye
    injuries. So General Peake alluded to the glasses.
        We are also finding now that the trunk and the thorax is
    protected. We are seeing lots of people with shoulder injuries.
    So now the researchers are looking into putting a protective
    pad on the shoulder. So the nature of the combat and the nature
    of the vehicles people are in matter, but now we can track that
    and be responsive like we could not in the past.
        Senator Inouye. I realize that it is part of the policy of
    our Defense Department to make certain that every person in
    uniform carries his or her load. In the medical personnel,
    there are some who are extremely specialized and trained. For
    example, we have sent surgeons to Iraq who are some of the
    finest in the land when it comes to knee, shoulder, or hip
    replacement. I do not suppose they have any hip replacement or
    knee replacement in Iraq. Why do we have to keep them there for
    6 months?
        General Peake. Sir, right now they are potentially there
    for 1 year for the Army, and what we are trying to do is have
    them there for 6 months. We have been rotating our reservists
    at 90 days and we think that that is going to allow them to
    stay in the Reserves. We are actively--as a matter of fact, I
    have got the program on my desk now to carry forward, and I
    have talked to some of the leadership in theater about being
    able to rotate our folks out. I could run down the list. Jack
    Chiles, who is the Deputy Commander at Baghdad, is one of our
    premier anesthesiologists. We have subspecialists over there
    because really that is why we have them in the Army is so that
    we can have the kind of quality forward deployed. But what we
    want to do is get them back so that they can maintain their
    skills and be used effectively and efficiently in the long run.
        But it is an issue of being very, very busy as an Army and
    everybody counts for being able to go forward and take care of
    those soldiers. So I absolutely appreciate what you are saying.
    I know many of the folks that you are talking about personally
    and we intend to carry this forward for the active guys to
    rotate those specialties at 6 months. As I say, with the
    reservists we are sticking to the 90 days because we think that
    is what it is going to take to keep them in the Reserves.
        Senator Inouye. My time has expired. I will wait until my
    turn comes up again.
        Senator Stevens. Senator Leahy, you are recognized for 5
    minutes.
        Senator Leahy. Thank you, Mr. Chairman. I have watched
    these 5-minute clocks here for the last 20 minutes, but I will
    try to stay somewhat close to it.
        General Peake, in one of your answers to the question about
    the increase in injuries based on the different type of
    fighting, are we seeing an increase in blindness, blinding
    injuries?
        General Peake. Sir, we saw some very serious eye injuries
    and that is why we have put this focus on the eye protection.
    So we are seeing a drop-off now. We will analyze it to see if
    it has really made that huge a difference.
        Senator Leahy. Please do because I get episodic stories on
    that. We can replace an arm. We can replace a leg. And I do not
    say that in a cavalier fashion by any means. It is still a
    difficulty, but it is not as devastating by any means to a
    person continuing with their life as blindness is.
        I heard your discussion of the--I have kind of watched
    that. We actually put together one of the newer, lighter
    helmets in Newport, Vermont. They are working around the clock.
    I have tried on the old helmet and the new one and there is a
    remarkable difference in the weight. They are both pretty
    heavy.
        General Peake. Yes, sir.
        Senator Leahy. But it is a big difference.
        I read that New York Times article on the incidence of
    post-traumatic stress disorder, this Coming Home article. It
    was troubling in the sense not that there is post-traumatic
    stress disorder. All three of you have had far more experience
    in this than I. You know this happens in our soldiers, our
    sailors, our airmen, marines. Hundreds, if not thousands, of
    these people are seeing horrific things that they have never
    really been prepared for prior to going there, including men
    and women who see their own fellow Americans killed before
    their eyes.
        But the article goes into the question, do we really have
    the things set in place to take care of them when they come
    back here? It said that a number of them are not identifying
    it, even though they feel they have these symptoms of post-
    traumatic stress disorder, because they are afraid it will look
    bad on their service records so they are not getting whatever
    counseling they might get. If they stay in the service, they
    have problems of having this untreated. If they go into
    civilian life, again the same thing. They have the problem of
    being untreated.
        Do we have provisions to really treat this? Do we have
    provisions to give the counseling, to do the identifying of it,
    number one; treat it, number two, and with useful numbers of
    our armed services at work trying to retain them and their
    skills in our services?
        General Peake. Well, sir, there are a lot of pieces to
    this.
        Senator Leahy. I understand.
        General Peake. I think we have and are addressing it
    aggressively. I will speak for the Army particularly because we
    have had the biggest bulk of folks on the ground facing those
    things recently.
        This post-deployment screening is more than just checking
    off a piece of paper or a computer chip and sending it in. It
    entails a face-to-face discussion with a provider who has a
    sensitivity to those kinds of things. You are right, sir, that
    some people may or may not report at that point.
        We have concern about the stigma that goes with an approach
    to mental health providers, and so the Army has invested in
    having what we call the Army One Source which offers up to six
    visits without any link to the military at all, like a civilian
    commercial establishment or industry might do. They can pick up
    a telephone and get an immediate contact and get into those six
    visits.
        We have really tried to push to get our combat stress units
    integrated out into the units so that they get to know people.
    So they are less threatening and they are a part of the team
    using sort of the chaplain's model, if you will, because we
    want to make that kind of thing accessible.
        Senator Leahy. You mentioned the pre- and post-deployment
    questionnaires they fill out and I have seen those. I had
    raised the same concern about 10 years ago. Do we have a
    tracking system? Do we know how to follow this? Do we have
    things that, as we go through the periodic health baselines--
    they report to a physician when they are in Iraq or
    Afghanistan, wherever for something. I do not know what we have
    that can show this baseline from beginning to end to, among
    other things, have it so readily available even without the
    individual names, but quantitatively and qualitatively
    throughout the military so that you get an indication of we are
    having far more of these, far less of these. It would certainly
    be helpful to other parts of the Government, the VA, for
    example. It would be very helpful to them, far easier to assess
    disability claims that often come up, reliable data for
    epidemiological studies later on. But we do not have something
    that can really do that, do we, General?
        General Peake. Sir, we are heading in that direction. We do
    not have.
        Senator Leahy. What can we do to help you head a little
    faster?
        General Peake. Well, we are in the process of trying to
    field what we call CHSCII which is basically a computerized
    patient record across all three services over the next 30
    months. This post-deployment screening is actually going into a
    centralized database so that we can query those fields, and
    that would be available to the VA as well.
        Senator Leahy. But suppose you have, say, a Sergeant Peake
    out there who has 2 or 3 years in there, been deployed
    different places, to have some way that wherever they are, they
    could immediately go back and see Sergeant Peake--I do not mean
    to pick on you by any means, but it would be, okay, they were
    at Fort Benning and this is what was done. They were in
    Afghanistan. This was done. We moved him to Iraq and this was
    done. Now we have him at Fort Hood and this was done, but be
    able to pull up immediately and know now that you are at Fort
    Hood, you are being treated, for them to be able to tell
    immediately without having to go through all kinds of
    paperwork, to be able to say, okay, this is what happened to
    the sergeant in each of these other places. But we do not have
    that, do we?
        General Peake. Sir, that is what I am saying. In Mobile,
    Alabama, we will have a central database that really has a
    virtual record, electronic record, for each soldier, sailor,
    airmen, and marine. And that is what we will have by the end of
    30 months.
        Senator Leahy. The reason I mention this, General, you
    would get strong support as far as the money is concerned from
    both Republicans and Democrats on this committee because we
    have to continuously make decisions on where is the money going
    to the VA, where is the money going to go whether it is what
    Admiral Cowan or General Taylor or anybody else asks us for,
    where is the money coming from if we have to make choices. The
    only way you can make choices is with the best information, and
    if the disease is not malaria or whatever else, but they are
    post-traumatic stress syndrome, if it is eye injuries, if it is
    stress fractures, or whatever it might be, we can put the money
    in there. We could also put the designing of equipment. We can
    do everything else.
        So I would urge you to keep that as a real priority so that
    we not only can track the individual person but that we could
    have collectively, whether it is for the VA or for anything
    else, we can do that. And also when somebody comes in with a
    disability claim years later, we can actually track and know
    exactly what happened.
        I know I went over, Mr. Chairman, but I know this is
    something you are interested in too. I just really want to
    stress to them that it is a matter that we are all concerned
    with.
        Senator Stevens. Thank you very much, Senator.
        We do want to move on to the next panel, but I want to give
    us each about 3 or 4 minutes for a second round.

                                MEDICAL RESEARCH

        Let me just make a statement to all of you. In the past
    bills, we have had a continual increase in medical research
    funding. We have had money for neurofibrosis, diabetes,
    juvenile diabetes, ovarian cancer, breast cancer, prostate
    cancer, leukemia and other blood related cancers, tuberous
    sclerosis, and manganese health research, head and brain
    injuries, molecular medicine, muscle research. We had about
    three-quarters of a billion dollars earmarked last year.
        I want you to take a look at that and tell us what of that
    is related to your current problems related to the war. I think
    we must emphasize war research in this. These people deserve
    the best and we have got to do everything we can to improve the
    type of treatment we can give them. I am not saying I am going
    to recommend we cut them out entirely, but I am going to
    recommend we reduce the research for non-war-related injuries
    and concentrate for this year that money in fiscal year 2005 on
    the real problem of trying to deal with this massive increase
    in these injuries.
        I do not know if the committee is going to agree with me or
    not because there are enormous groups behind all those other
    concepts, but I do believe that we should emphasize the
    research for the basic people that need the treatment now.
    Those other research concepts are going on year after year
    after year. These people need help now. So we are going to try
    to concentrate on that if we can.

                          MEDICAL AND DENTAL SCREENING

        Other than that, let me ask you this. We enacted
    legislation to make medical and dental screening, as well as
    access to TRICARE available to service members once they are
    alerted for active duty. How is that working out? Is it
    possible to do anything more? The former service reservists
    have told us that post-deployment medical screening has been
    improved, but it falls short of identifying the care that
    returning soldiers need. Those two things, upon being called up
    and released. What needs to be done? General?
        General Peake. Well, sir, I think the opportunity to get
    them screened and to provide the care to bring them up to
    deployable standards before they are activated is important. It
    keeps us from wasting time at mob stations and that kind of
    thing. What we need to discipline ourselves better on--and I
    think we are really pushing in that direction--is to be able to
    have that data available to commanders so they know who needs
    what and insist that they maintain the appropriate standard.
        In regards to the soldiers coming back, this post-
    deployment screening that I referred to makes sure that we
    identify at least what they will declare to us, but then they
    have the opportunity for VA care for 2 years for service-
    connected issues, as well as the opportunity to be in TRICARE
    for, right now, up to 180 days after their separation. So we
    are very interested in trying to make sure that they do get the
    kind of care that they need and the process is in place to do
    that.
        Senator Stevens. Admiral.
        Admiral Cowan. I would echo, sir, what General Peake said.
    There are lots of pushups that have to be done to get some of
    the reservists ready when they come in, but we have not had
    major difficulties doing that to get them up to a level of
    deployment health that they need to be able to go.
        We believe that the policies for the screening, the post-
    and pre-deployment, the annual health assessment that we do are
    about right, and any failures on individual cases would be
    failures of execution that we work through on a daily basis to
    be as seamless as we can.
        Senator Stevens. Thank you.
        General Taylor.
        General Taylor. The Air Force relies heavily on our Reserve
    component, and over the last 5 years, from the air war over
    Serbia to today, we have constantly had to activate Guard and
    Reserves to help us. So our system is built on a fairly strong
    program during peacetime to ensure folks are ready to deploy.
    So we have had less of a problem on activation.
        I think it is an extremely generous benefit from the
    Congress to ensure that we can have access to health care upon
    notification of orders, and then the 180 days afterwards
    becomes very important to us.
        Also in the Air Force, we have run a system that requires
    the Assistant Secretary of the Air Force to sign off on any
    medical mobilization extensions, which puts a driving force on
    us medics to make sure we are taking care of our people as
    quickly as possible.
        So the combination of those two have made our numbers of
    folks that have had issues smaller. Very clearly, we have not
    had the kind of catastrophic injuries that the marines and the
    soldiers have had over the last year.
        Senator Stevens. Thank you.
        I am going to put in the record Karl Vick's Washington Post
    report of the lasting wounds of this war that was in the
    Washington Post on April 27. I will put it in the record at
    this point.
        [The article follows:]

                   [From The Washington Post, April 27, 2004]

     The Lasting Wounds of War; Roadside Bombs Have Devastated Troops and
                             Doctors Who Treat Them
                  (Karl Vick, Washington Post Foreign Service)

        The soldiers were lifted into the helicopters under a moonless sky,
    their bandaged heads grossly swollen by trauma, their forms silhouetted
    by the glow from the row of medical monitors laid out across their
    bodies, from ankle to neck.
        An orange screen atop the feet registered blood pressure and heart
    rate. The blue screen at the knees announced the level of postoperative
    pressure on the brain. On the stomach, a small gray readout recorded
    the level of medicine pumping into the body. And the slender plastic
    box atop the chest signaled that a respirator still breathed for the
    lungs under it.
        At the door to the busiest hospital in Iraq, a wiry doctor bent
    over the worst-looking case, an Army gunner with coarse stitches
    holding his scalp together and a bolt protruding from the top of his
    head. Lt. Col. Jeff Poffenbarger checked a number on the blue screen,
    announced it dangerously high and quickly pushed a clear liquid through
    a syringe into the gunner's bloodstream. The number fell like a rock.
        ``We're just preparing for something a brain-injured person should
    not do two days out, which is travel to Germany,'' the neurologist
    said. He smiled grimly and started toward the UH-60 Black Hawk thwump-
    thwumping out on the helipad, waiting to spirit out of Iraq one more of
    the hundreds of Americans wounded here this month.
        While attention remains riveted on the rising count of Americans
    killed in action--more than 100 so far in April--doctors at the main
    combat support hospital in Iraq are reeling from a stream of young
    soldiers with wounds so devastating that they probably would have been
    fatal in any previous war.
        More and more in Iraq, combat surgeons say, the wounds involve
    severe damage to the head and eyes--injuries that leave soldiers brain
    damaged or blind, or both, and the doctors who see them first
    struggling against despair.
        For months the gravest wounds have been caused by roadside bombs--
    improvised explosives that negate the protection of Kevlar helmets by
    blowing shrapnel and dirt upward into the face. In addition, firefights
    with guerrillas have surged recently, causing a sharp rise in gunshot
    wounds to the only vital area not protected by body armor.
        The neurosurgeons at the 31st Combat Support Hospital measure the
    damage in the number of skulls they remove to get to the injured brain
    inside, a procedure known as a craniotomy. ``We've done more in eight
    weeks than the previous neurosurgery team did in eight months,''
    Poffenbarger said. ``So there's been a change in the intensity level of
    the war.''
        Numbers tell part of the story. So far in April, more than 900
    soldiers and Marines have been wounded in Iraq, more than twice the
    number wounded in October, the previous high. With the tally still
    climbing, this month's injuries account for about a quarter of the
    3,864 U.S. servicemen and women listed as wounded in action since the
    March 2003 invasion.
        About half the wounded troops have suffered injuries light enough
    that they were able to return to duty after treatment, according to the
    Pentagon.
        The others arrive on stretchers at the hospitals operated by the
    31st CSH. ``These injuries,'' said Lt. Col. Stephen M. Smith, executive
    officer of the Baghdad facility, ``are horrific.''
        By design, the Baghdad hospital sees the worst. Unlike its sister
    hospital on a sprawling air base located in Balad, north of the
    capital, the staff of 300 in Baghdad includes the only ophthalmology
    and neurology surgical teams in Iraq, so if a victim has damage to the
    head, the medevac sets out for the facility here, located in the
    heavily fortified coalition headquarters known as the Green Zone.
        Once there, doctors scramble. A patient might remain in the combat
    hospital for only six hours. The goal is lightning-swift, expert
    treatment, followed as quickly as possible by transfer to the military
    hospital in Landstuhl, Germany.
        While waiting for what one senior officer wearily calls ``the
    flippin' helicopters,'' the Baghdad medical staff studies photos of
    wounds they used to see once or twice in a military campaign but now
    treat every day. And they struggle with the implications of a system
    that can move a wounded soldier from a booby-trapped roadside to an
    operating room in less than an hour.
        ``We're saving more people than should be saved, probably,'' Lt.
    Col. Robert Carroll said. ``We're saving severely injured people. Legs.
    Eyes. Part of the brain.''
        Carroll, an eye surgeon from Waynesville, Mo., sat at his desk
    during a rare slow night last Wednesday and called up a digital photo
    on his laptop computer. The image was of a brain opened for surgery
    earlier that day, the skull neatly lifted away, most of the organ
    healthy and pink. But a thumb-sized section behind the ear was gray.
        ``See all that dark stuff? That's dead brain,'' he said. ``That
    ain't gonna regenerate. And that's not uncommon. That's really not
    uncommon. We do craniotomies on average, lately, of one a day.''
        ``We can save you,'' the surgeon said. ``You might not be what you
    were.''
        Accurate statistics are not yet available on recovery from this new
    round of battlefield brain injuries, an obstacle that frustrates combat
    surgeons. But judging by medical literature and surgeons' experience
    with their own patients, ``three or four months from now 50 to 60
    percent will be functional and doing things,'' said Maj. Richard
    Gullick.
        ``Functional,'' he said, means ``up and around, but with pretty
    significant disabilities,'' including paralysis.
        The remaining 40 percent to 50 percent of patients include those
    whom the surgeons send to Europe, and on to the United States, with no
    prospect of regaining consciousness. The practice, subject to review
    after gathering feedback from families, assumes that loved ones will
    find value in holding the soldier's hand before confronting the
    decision to remove life support.
        ``I'm actually glad I'm here and not at home, tending to all the
    social issues with all these broken soldiers,'' Carroll said.
        But the toll on the combat medical staff is itself acute, and
    unrelenting.
        In a comprehensive Army survey of troop morale across Iraq, taken
    in September, the unit with the lowest spirits was the one that ran the
    combat hospitals until the 31st arrived in late January. The three
    months since then have been substantially more intense.
        ``We've all reached our saturation for drama trauma,'' said Maj.
    Greg Kidwell, head nurse in the emergency room.
        On April 4, the hospital received 36 wounded in four hours. A U.S.
    patrol in Baghdad's Sadr City slum was ambushed at dusk, and the battle
    for the Shiite Muslim neighborhood lasted most of the night. The event
    qualified as a ``mass casualty,'' defined as more casualties than can
    be accommodated by the 10 trauma beds in the emergency room.
        ``I'd never really seen a `mass cal' before April 4,'' said Lt.
    Col. John Xenos, an orthopedic surgeon from Fairfax. ``And it just kept
    coming and coming. I think that week we had three or four mass cals.''
        The ambush heralded a wave of attacks by a Shiite militia across
    southern Iraq. The next morning, another front erupted when Marines
    cordoned off Fallujah, a restive, largely Sunni city west of Baghdad.
    The engagements there led to record casualties.
        ``Intellectually, you tell yourself you're prepared,'' said
    Gullick, from San Antonio. ``You do the reading. You study the slides.
    But being here . . ..'' His voice trailed off.
        ``It's just the sheer volume.''
        In part, the surge in casualties reflects more frequent firefights
    after a year in which roadside bombings made up the bulk of attacks on
    U.S. forces. At the same time, insurgents began planting improvised
    explosive devices (IEDs) in what one officer called ``ridiculous
    numbers.''
        The improvised bombs are extraordinarily destructive. Typically
    fashioned from artillery shells, they may be packed with such debris as
    broken glass, nails, sometimes even gravel. They're detonated by remote
    control as a Humvee or truck passes by, and they explode upward.
        To protect against the blasts, the U.S. military has wrapped many
    of its vehicles in armor. When Xenos, the orthopedist, treats limbs
    shredded by an IED blast, it is usually ``an elbow stuck out of a
    window, or an arm.''
        Troops wear armor as well, providing protection that Gullick called
    ``orders of magnitude from what we've had before. But it just shifts
    the injury pattern from a lot of abdominal injuries to extremity and
    head and face wounds.''
        The Army gunner whom Poffenbarger was preparing for the flight to
    Germany had his skull pierced by four 155 mm shells, rigged to detonate
    one after another in what soldiers call a ``daisy chain.'' The shrapnel
    took a fortunate route through his brain, however, and ``when all is
    said and done, he should be independent. . . . He'll have speech,
    cognition, vision.''
        On a nearby stretcher, Staff Sgt. Rene Fernandez struggled to see
    from eyes bruised nearly shut.
        ``We were clearing the area and an IED went off,'' he said,
    describing an incident outside the western city of Ramadi where his
    unit was patrolling on foot.
        The Houston native counted himself lucky, escaping with a
    concussion and the temporary damage to his open, friendly face. Waiting
    for his own hop to the hospital plane headed north, he said what most
    soldiers tell surgeons: What he most wanted was to return to his unit.

        Senator Stevens. Senator Inouye.
        Senator Inouye. Thank you very much.

                          MEDICAL PERSONNEL SHORTAGES

        According to information we have received, the Army Reserve
    had 3,000 physicians in 1991 and today they are 1,550. The
    Naval Reserve went from 2,191 in 1900 to 1,000 today. The Air
    Force currently has 761 physicians.
        We have been advised that the Air Force is short on
    dentists, nurses, occupational therapists, and is relying on
    incentive pay and ongoing initiatives for school loan repayment
    options for recruiting and retention. The Army is short on
    nurse anesthetists, general surgeons, anesthesiologists,
    neurosurgeons. The Navy is short on nurses and dental corps
    personnel.
        I realize that we will not have the time today, but can you
    advise this committee as to what you are doing about this or
    what can be done and what can be done by this committee? If you
    could, please provide us a brief response.
        Admiral Cowan. Sir, we will respond to that in more detail
    in the immediate future.
        Part of the reduction of reservists for the Navy is an
    intentional part of the transformation of the Navy because we
    use our reservists in different ways. Part of the cuts in
    Reserves were actually cuts of billets not people. They were
    billets that we could not match the skill next to. We now use
    our Reserves as more of an integrated force than in the past.
    So the degree of risk that we may be running with our Reserve
    assets is only perhaps marginally larger or the same as it was
    before.
        That being said, we do have ongoing difficulties with
    shortages in specific areas, and I will provide you information
    on the programs that we are working to improve those.
        [The information follows:]

        The Medical Corps currently has shortages in anesthesiology,
    surgery, urology, neurosurgery and radiology. The Medical Corps
    primarily uses the Health Professions Scholarship Program and the
    Uniformed Services University of the Health Sciences, as it's primary
    accession pipeline. Students are recruited for these programs and then
    get into specialties based on the Navy's need and the availability of
    training positions. Another method to increase the number of critical
    shortage specialists is the use of fellowship training to entice
    specialists in critical areas to remain on active duty. In addition, a
    new training program in radiology at Naval Medical Center Portsmouth,
    Virginia was opened in 2003, which will increase the number of
    graduating radiologists per year from in service training programs.
        The Nurse Corps continues to focus on a blend of initiatives to
    enhance our recruitment and retention efforts, 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, and Board Certification
            Pay).
      --Graduate education and training programs, which 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.
      --Successful recruiting incentives for reservists in critical wartime
            specialties include: the accession bonus and stipend program
            for graduate education.
        The Medical Service Corps is comprised of 32 different health care
    specialties in administrative, clinical and scientific fields. The
    educational requirements are unique for each field; most require
    graduate level degrees, many at the doctoral level. End of fiscal year
    2003 manning was at 98.2 percent, however, difficulties remain in
    retaining highly skilled officers in a variety of clinical and
    scientific professions. Entomology and Physiology are currently
    undermanned by more than 10 percent. Entomology has not met direct
    accession goals since fiscal year 1999 and Physiology has not met
    direct accession goals since fiscal year 1998. Use of the Health
    Services Collegiate Program (HSCP), a Navy student pipeline program,
    was instituted for the Entomology community in fiscal year 2002 and for
    the Physiology community in fiscal year 2003. The use of HSCP for these
    communities seems to be an effective means to achieve the accession
    goals for these communities.
        The Dental Corps currently have their greatest shortages in general
    military dentists; endodontists (root canal specialists); Oral and
    Maxillo-Facial Surgeons and prosthodontists. The Dental Corps uses the
    Health Professions Scholarship Program (HPSP) as it's primary accession
    pipeline. Dental students are recruited for these programs and then get
    into specialties based on the Navy's need and the availability of
    training positions. At the present time, recent graduates are being
    deferred for residency training in these shortage areas on a case-by-
    case review.

        General Peake. Sir, I mentioned the 90-day rotations to be
    able to enable dentists, nurse anesthetists, and physicians to
    be able to be away from their practice a reasonable period and
    still be able to be incorporated back into that practice when
    they get there. Even with that 90 days, it is stressful. I have
    had one say, well, I can do 90 days, but I cannot do 90 days
    every year, that kind of notion. So the OPTEMPO is part of it.
        I think we are about to restructure our Reserves so that we
    have a United States Army Reserve medical command that will
    allow us to focus the management of all of those critical
    assets in a more homogeneous way. So there is a restructuring
    initiative that is going on.
        The other aspects of it are on the active side, and so we
    have to keep a close eye on that, given the OPTEMPO and
    PERSTEMPO as well. So I think the issue of restructuring our
    bonuses is important and we need to be able to look forward to
    getting that updated because we have not really updated it in a
    while.
        General Taylor. We will respond in more detail to you,
    Senator.
        I also think for the reservists in particular it is
    difficult in today's medical practice. Many of the providers
    operate very close to the margin. So taking them out for long
    periods of time oftentimes can destroy a practice.
        So all of us--and you heard from General Peake--are trying
    to work ways where we can bring them on active duty for short
    periods of times, particularly through a volunteer system, so
    they could support perhaps 30 days every couple of years. So we
    are all actively trying to work ways of doing that. We have
    been aggressively trying to do that so that it counts as 2
    years' worth of points and 1 year, one 30-day activation. So we
    are working real hard to do that.
        Certainly pay and environment of care is an important
    aspect, as well as trying to make continued service in the
    Guard and Reserve for our folks who elect to leave active duty
    an important piece of a smooth transition from being on active
    duty status. We are hoping to be able to gather more folks up
    to serve in these critical positions in the Guard and Reserve.
    We have not seen a radical drop in physicians in particular
    within the Guard and Reserves, but it is very troublesome
    seeing how much we used them in the last couple of years.

                            RECRUITING AND RETENTION

        Senator Inouye. There are certain statistics we watch very
    carefully. One, obviously, is recruiting and retention of
    active duty medical personnel. Are we in good shape?
        General Peake. Sir, we are in the Army on the Health
    Professions Scholarship Program (HPSP), of course, with the
    Uniformed Services University of the Health Sciences (USUHS),
    but really in the larger extent it is our health professional
    scholarship programs. Those costs have increased significantly
    to the point where I had to look into other sources of funds
    other than what we had programmed just because the tuition
    costs have gone up so much as we put people out into civilian
    training, which is tremendously important for us. That is
    really our best recruiting tool.
        I know Debbie Gustke will talk more about nursing in the
    next panel, the kinds of things that we are doing to try to
    encourage nurses to join our Army as well.
        I think what General Taylor talked about in terms of
    environment of care is terribly important. We have to have a
    quality system and the kind of quality places for them to come
    in and practice. Otherwise, they really will not want to be a
    part of a second-rate organization. So we have got to keep that
    first-rate.
        Senator Inouye. Thank you, Mr. Chairman.
        Senator Stevens. Well, we would like to pursue that
    conversation with you and your successors. I know some medical
    people up my way who would welcome a chance to have a quarter
    of 1 year away from their practice and to have some different
    surroundings. If they had a commitment that they would not be
    yanked out for 1 year later, they might make that commitment.
    We need to devise some innovative programs to give particularly
    these young doctors who get stuck in some place and they do not
    get a chance to travel. It will give them a chance to get
    involved and be active duty for 2 months a year or something
    like that and give them a commitment they will not be called up
    for longer in a certain period, whatever it is, and have some
    bonuses involved in that training. It might be easier to do
    that than to get more scholarships and whatnot, to get more
    people who really end up by not being available anyway after
    they have left the service.
        We want to thank you again. General Peake and Admiral
    Cowan, we have enjoyed your participation in our process here
    and we respect your commitment to your military service and
    your medical profession. So we wish you well.
        General Taylor, you will be over at the left-hand side of
    the table next year. So we will look forward to that. I
    remember when I was sitting down at the end of this table once
    when an old friend of mine, who was the chairman--I had known
    him years before--he called me over and he said, do you know
    how much seat time you are going to have to log to get to sit
    where I am sitting?
        So cheer up. You moved very quickly.
        We will proceed to the nursing now and hear from the Chiefs
    of the service nursing corps. We thank you very much, Admiral
    and Generals.
        Your nursing corps is vital to the success of our military
    medical system as any part of it. We thank you for your
    leadership and we look forward to hearing from you. We welcome
    you again. We are going to hear from Colonel Deborah Gustke,
    the Assistant Chief of Army Nurse Corps. We welcome Admiral
    Nancy Lescavage, Director of the Navy Nurse Corps, and from the
    Air Force, we have General Barbara Brannon, Assistant Surgeon
    General for Nursing. We welcome you all back warmly. None of
    you are leaving us this year, are you?
        Colonel Gustke. Yes, sir.
        Senator Stevens. I yield to my good friend and co-chairman.
        Senator Inouye. I would like to join you in congratulating
    and thanking all of the nurses here.
        Major General Brannon, I believe you are the first to be a
    major general.
        General Brannon. I am, sir, in the Air Force.
        Senator Inouye. Congratulations.
        General Brannon. Thank you for the great honor. It is very
    humbling.
        Senator Inouye. Let us hope that you are the first of many.
        I am especially proud to see Admiral Lescavage here. I have
    special pride in that she served on my staff for a while as a
    fellow.
        We will hear from Colonel Gustke. Some day, if you stick
    around, you will have a star as well.
        I understand that the Army has been operating without a
    Nurse Corps chief since General Bester retired. I understand
    that you will also be retiring.
        Colonel Gustke. Yes, sir.
        Senator Inouye. Don't you want to wait until you receive
    your star?
        Seriously, I would like to thank you for your many years of
    service to our Nation. Thank you so much.
        Colonel Gustke. Thank you, sir.
        Senator Stevens. Thank you all. Your statements will appear
    in the record in full. We will look forward to your comments.
    Colonel, we call on you first.

    STATEMENT OF COLONEL DEBORAH A. GUSTKE, ASSISTANT
                CHIEF, ARMY NURSE CORPS
        Colonel Gustke. Mr. Chairman and distinguished members of
    the committee, thank you for the opportunity to update you on
    the Army Nurse Corps.
        As of April 2004, we have deployed over 814 Army nurses to
    places such as Afghanistan and Iraq, serving as members of
    forward surgical teams in support of our deployed divisions,
    and as staff within our 31st Combat Support Hospital, 67th
    Combat Support Hospital, and 325th U.S. Army Reserve Field
    Hospital.
        We have numerous Reserve nurses who are serving in back-
    fill roles in our medical treatment facilities. Furthermore,
    158 Reserve and National Guard nurses are serving as case
    managers at the regional medical commands, mobilization sites,
    and at the community-based health care initiatives which were
    established to provide medical holdover management for soldiers
    impacted deployment.
        We have a very strong focus on reintegration of our
    personnel once they return home and are continuing to assess
    whether the rapid deployment tempo is impacting retention. I am
    pleased to tell you that last year in fiscal year 2003 we
    experienced the lowest attrition rate in the past 5 years. We
    continue to collect data from Army nurses and the reasons for
    attrition have remained constant over the last few years
    without any new emerging trends.
        At home we continue to leverage all available incentives
    and professional opportunities in recruiting and retaining both
    our civilian and military nursing personnel. Simply put, the
    direct hire authority for registered nurses authorized by
    Congress has substantially benefitted our hiring efforts. In
    fiscal year 2003 we achieved an unprecedented 94 percent fill
    rate of documented civilian registered nurse positions, an
    overall turnover rate of less than 14 percent. Our hiring
    reflects improvement over the past 3 years for registered
    nurses.
        We continue, however, to have barriers in hiring our
    licensed practical nurses and strongly affirm that direct hire
    authority needs to be extended to include this extremely
    valuable nursing population.
        We believe that we have strong recruitment and retention
    tools to address the long-term impact of the decreased nursing
    pool on our military nursing recruiting efforts. Although the
    Army Nurse Corps was below our fiscal year 2003 budgeted end
    strength, the decrement is less than in the past 2 years. We
    are confident that the recruiting and retention strategies in
    place, such as the increased accession bonus and the health
    loan repayment program, will continue to help reduce the
    decrement in future years.
        We also increased the number of soldiers who are sponsored
    to obtain their baccalaureate nursing degree through the Army
    enlisted commissioning program. We continue to take aggressive
    measures to strengthen nurse accessions through the Army
    Reserve Officer Training Corps and the United States Army
    Recruiting Command. We offer Reserve Officer Training Corps
    (ROTC) nurses scholarships at nearly 200 nursing schools and
    have increased the collaborative relationship between our
    health care recruiting resources in ROTC and the United States
    Army Recruiting Command (USAREC).
        Army nurses continue to be at the forefront of relevant
    nursing research that is focused on our research priorities of
    readiness and nursing practice. We have nearly 90 research
    studies currently in progress and continue to foster
    involvement in the research process at all levels of our
    organization. Our research accomplishments include the
    development of 23 evidence-based standardized treatment
    guidelines for musculoskeletal injuries most common to
    soldiers.
        Our Military Nursing Outcomes Database study, known as
    MilNOD is now in the fourth year of study and has resulted in
    the development of staffing and patient safety reports for the
    Army hospitals. This study also affirms our strong belief in
    collaborative nursing research as we have influenced the
    development of the Veterans Affairs Nursing Outcomes Database
    with a similar design. This project truly demonstrates what is
    best about nursing research and Federal nursing collaboration.
        Along with our Federal nursing colleagues, our commitment
    to the tri-service research program and the graduate school of
    nursing at the Uniformed Services University of the Health
    Sciences remains very strong. Both these programs are distinct
    cornerstones of our Federal nursing education and research
    efforts and clearly demonstrate nursing excellence.
        Thank you, sir, for your continued support of both these
    exemplary programs as it enables us to continue to produce
    advances in nursing education, research, and practice for the
    benefit of our soldiers and their family members and our
    deserving retiree population.
        Finally, Senators, we are firmly determined to meeting and
    overcoming any challenge that we face this year and are
    committed to meet the uncertain challenges of the future. We
    are further motivated by the impressive, steadfast courage and
    sacrifice demonstrated by all the fine men and women in uniform
    who are serving our great Nation. We will continue our mission
    with a sustained focus on readiness, expert clinical practice,
    sound educational preparation, professionalism, leadership, and
    the unfailing commitment to our Nation that have been
    distinguishing characteristics of our Army nurses and
    organization for over 103 years.
        As I conclude my 32 years of service in the Army Nurse
    Corps, I am most proud of all the tremendous civilian and
    military nursing personnel that represent this great Army Nurse
    Corps.

                               PREPARED STATEMENT

        Thank you again for your support and for providing the
    opportunity for us to present the extraordinary efforts,
    sacrifices, and contributions made by all Army nurses who
    always stand ready, caring, and proud. Thank you, sir.
        Senator Stevens. Thank you very much.
        [The statement follows:]

                Prepared Statement of Colonel Deborah A. Gustke

        Mr. Chairman and distinguished members of the committee, I am
    Colonel Deborah A. Gustke, Assistant Chief, Army Nurse Corps. Thank you
    for providing the opportunity this year to update you on the state of
    the Army Nurse Corps. I am pleased to represent Brigadier General
    William T. Bester, Chief of the Army Nurse Corps, who is currently
    transitioning to retirement after a very distinguished thirty-five year
    military career. The past year has been challenging for our great
    Nation as well as for the Army Nurse Corps. We have sustained a
    deployment rate in recent months not seen since the Vietnam era and I
    am extremely proud to report that the Army Nurse Corps has again
    demonstrated our flexibility and determination to remain ready to serve
    during these challenging and difficult times.
        We remain very engaged in our Army's efforts in support of
    operations around the world. As of March 2004, we have deployed over
    814 Army nurses to places such as Afghanistan and Iraq. Our nurses are
    providing expert care in every health care setting. There are Army
    nurses on Forward Surgical Teams performing immediate life-saving care
    to our soldiers. We have Army nurses assigned to the combat divisions
    who are responsible for educating and sustaining our enlisted combat
    medics--our linchpin to soldier care. Army nurses perform both clinical
    and leadership roles in the two deployed Combat Support Hospitals (CSH)
    and one Field Hospital. At present, the 31st Combat Support Hospital
    from Fort Bliss, TX and the 67th CSH from Wuerzberg, Germany are on the
    ground in Iraq and the 325th Field Hospital, United States Army
    Reserve, headquartered from Independence, MO, is currently on the
    ground in Afghanistan. These units in Iraq recently conducted a
    seamless transition with the 28th CSH from Fort Bragg, NC and the 21st
    CSH from Fort Hood, TX, who have now safely returned home. We are
    firmly supporting organized reintegration programs for the members of
    these units at their home stations to ensure that the transition to
    home is as supportive and successful as possible. We are truly proud of
    the Army nurses and all the medical personnel who served and are
    currently serving with these and all the medical units.
        Our Reserve Nurse Corps officers are demonstrating the necessary
    leadership and clinical expertise in support of current operations in
    many settings around the world. In addition to the nurses in theater,
    numerous other Reserve nurses are serving in backfill roles in our
    Medical Treatment Facilities (MTFs). Furthermore, 158 Reserve and
    National Guard nurses are serving as case managers at the Regional
    Medical Commands, mobilizations sites and at the community based health
    care initiative sites, established to provide medical holdover
    management for soldiers impacted by deployment. With the addition of
    Army nurse case managers in June 2003, the flow and disposition rate of
    medical holdovers has increased dramatically. Army nurses possess the
    necessary mix of leadership and clinical skills to perform nursing care
    in any setting and in any role. I strongly believe that we have fully
    demonstrated this throughout our one hundred and three year history,
    and especially since September 11, 2001.
        The current world environment is not without challenges for the
    Army Nurse Corps in several arenas. The National nursing shortage
    continues to impact the ability of the Army Nurse Corps to attract and
    retain nurses. Although we are encouraged by recent increases in
    nursing school application numbers, concerns continue over the lack of
    nursing school capacity due to the availability of adequate faculty. We
    wholeheartedly support initiatives that attract and retain nursing
    school faculty and believe that it will be critical to continue
    developing programs necessary to meet current and future faculty
    shortfalls.
        We have worked diligently in the past year to minimize the impact
    of a decreased nursing personnel pool on our civilian nurse strength.
    Civilian nurses continue to comprise the majority of our total nurse
    workforce and have performed exceptionally during the recent staffing
    transitions at our MTFs as our active and reserve nurses mobilize in
    support of operations around the world. Our civilian nurses have
    demonstrated true resiliency and the willingness to absorb the
    necessary roles to ensure that we don't miss a beat as we provide
    expert nursing care to our beneficiaries.
        We continue to have success with the Direct Hire Authority. In
    fiscal year 2003, we achieved a 94 percent percent fill rate of
    documented civilian Registered Nurse positions and an overall turnover
    rate of 14 percent. These numbers reflect continued improvements over
    the past three years and the high fill rate percentage demonstrates
    that Direct Hire Authority is successful. We will continue to monitor
    strategies to address retention efforts such as supporting
    opportunities for continuing education and professional development
    programs for our civilian Registered Nurses. Although in fiscal year
    2003, for the first time in three years, we experienced a decline in
    the fill rate for civilian Licensed Practical nurse positions, but we
    experienced a decreased turnover rate. In fiscal year 2003, it took an
    average of 84 days to fill a Licensed Practical Nurse position, nearly
    30 more days than the Army standard of 55 days. We're reviewing the
    options we have to ease the recruitment and hiring lag that we
    currently experience in this valuable nursing personnel population.
        The Army Nurse Corps remains actively engaged in a DOD effort to
    simplify and streamline civilian personnel requirements and prepare our
    processes to compliment the evolving National Security Personnel System
    (NSPS). We support having the flexibility necessary to respond to the
    rapidly changing civilian market and are encouraged by the projected
    use of pay banding to facilitate regional hiring and retention
    differences. We are now able to implement the needed flexible special
    pay strategies within the pay system and are pursuing financing
    strategies to execute this authority this fiscal year. In addition, we
    are ready to implement the clinical education template currently
    required in the legislation in order to ensure consistency of hiring
    practices.
        We believe that we have assertively leveraged strong recruitment
    and retention tools to address the long-term impact of the decreased
    nursing pool on our military nurse recruiting efforts. Although the
    Army Nurse Corps was below our fiscal year 2003 end-strength of 3,381
    by 154, this decrement has closed since fiscal year 2002 and we are
    confident that the recruitment and retention strategies in place will
    continue to help reduce future shortfalls. We continue to take
    aggressive measures to strengthen our position in both the Army Reserve
    Officers' Training Corps (AROTC) and United States Army Recruiting
    Command (USAREC) recruiting markets. We now offer AROTC nursing
    scholarships to students at approximately 200 nursing schools across
    the country. One of the greatest recruiting tools for AROTC and nursing
    is the Nurse Educators Tour to the AROTC Leader Development and
    Assessment Course at Fort Lewis, WA. This course is the capstone
    evaluation program for AROTC cadets in the summer between their junior
    and senior years and impressively demonstrates the finest qualities of
    our future officers. In the past, we were limited to hosting 30 nurse
    educators, but now have secured resources to host up to 150 educators.
    Last summer, 104 nurse educators came to Fort Lewis and left with a new
    found appreciation for the benefit of AROTC training as well as for the
    Army Nurse Corps as a tremendous environment for their students to
    practice the art and science of nursing. Upon returning to school last
    fall, one nurse educator personally escorted five nursing students to
    the AROTC cadre to discuss scholarship options. It is clearly evident
    that the influence of nurse educators on prospective Army Nurses is
    integral to our efforts in AROTC and we will continue to foster those
    strong relationships.
        We have also taken strides to increase the collaborative
    relationship between our health care recruiting resources in AROTC and
    USAREC. This collaborative non-competitive partnering was initiated to
    maximize the Army Nursing presence on campus and to present a unified
    Army Nurse Corps team to the nursing students and faculty. As of
    February 2004, this collaborative effort has resulted in 60 referrals
    to USAREC by AROTC Nurse Counselors. We will continue to support this
    professional partnering in nurse recruiting.
        Regarding compensation incentives, we have been successful in
    increasing the accession bonus and are working towards incremental
    increases up to our authorized level in future years. We are
    particularly proud to report that the Health Professions Loan Repayment
    Program (HPLRP), implemented at the end of fiscal year 2003 and
    continuing into fiscal year 2006, has been very successful. We have
    been able to optimize the use of this program for both new accessions
    as well as for retention of our fine company grade Army Nurse Corps
    officers. We believe that these incentive programs, coupled with
    established professional leadership and clinical education programs,
    are instrumental in our efforts to retain Army nurses during the early
    phase of their careers. Finally, we continue to be extremely successful
    in providing a solid progression program for our enlisted personnel to
    obtain their baccalaureate nursing degree through the Army Enlisted
    Commissioning Program. Our intent is to consistently sponsor 85
    enlisted soldiers each year to complete their nursing education to
    become Registered Nurses and subsequently, Army Nurse Corps officers.
    We have married the support framework of these soldiers to our AROTC
    resources at the various colleges and universities in order to ensure
    that our enlisted soldiers have the support and mentoring they so
    richly deserve while they are pursuing their nursing studies. Graduates
    from this program continue to provide the Army Nurse Corps with nurses
    who are strong soldiers and leaders.
        Our focus on retention of our junior nurses will always be
    important and in fact, in fiscal year 2003, we experienced the lowest
    attrition rate in the past five years. We believe that the robust
    compensation strategies such as their base pay, allowances, the Health
    Professions Loan Repayment Program (HPLRP) and the Incentive Specialty
    Pays for our Certified Registered Nurse Anesthetists (CRNA) have been
    paramount in our effort to recognize individuals for their tremendous
    efforts and sacrifices, especially during the continued high
    operational tempo. We continue to collect data from Army nurses who
    choose to leave the Army and are analyzing the recent data to assess
    any impact that the swift deployment tempo may have on our retention
    efforts. The results to date do not reflect that the losses are related
    to deployment, but we will continue to track and assess this very
    closely.
        Each year, the Army Nurse Corps continues to sponsor the largest
    number of nurses, compared to any Service, to pursue advanced nursing
    education in a variety of specialty courses as well as in masters and
    doctoral programs. We know that this education program, coupled with
    the military leadership development, positively impacts improved
    clinical practice environment, mentoring relationships, and role
    satisfaction.
        It is a pleasure to be able to highlight good news stories about
    nurses affiliated with the Army Medical Department (AMEDD) Center and
    School and at the many MTFs around the world who are working tirelessly
    to improve the clinical, education, research, and leadership
    environments. At the AMEDD Center and School, we have increased our
    training capacity for CRNAs in order to address a critical shortfall in
    this specialty. This involved opening a clinical training site at
    Brooke Army Medical Center, in San Antonio, TX, that allows us to
    produce an additional four CRNA nurses each year. As a result, we will
    increase our ability to fill the operational requirements for these
    nurses as well as decrease the current costs of contracting civilian
    CRNA personnel in our facilities.
        Army Nurses are integral to the Army Medical Reengineering
    Initiative at all levels of our organization. To support the conversion
    of our enlisted/officer Licensed Practical Nurse (LPN) to an expanded
    level of patient care capability, Army Nurses designed and implemented
    a new educational program of instruction for the LPN training program.
    This improvement refocused training to include a greater emphasis on
    critical care and trauma skills in support of the revised wartime
    mission of these soldiers. Our first class, under the improved program
    of instruction, began in late 2003 and we are confident that this
    training will produce the highly trained Practical Nurse sought by the
    Army. Army Nurses are also very proud to be an integral part of the
    transformation of the new enlisted Healthcare Specialist Military
    Occupational Specialty (91Ws). We are imbedded in the training units as
    leaders and educators. In fact, there are 32 Army Nurse Corps officers
    directly assigned to the combat divisions who are working to ensure
    that our 91W soldiers sustain their training and preparation needed to
    provide the most far forward care. Over the past year, as they have
    throughout history, our medics have performed admirably and we are very
    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 and sustainment training practices are well
    established.
        The Army Nurses at Tripler Army Medical Center, Hawaii have
    implemented a professional practice model for all its nurses. The model
    is a standards and role-based model that clearly delineates the role of
    the nurse and provides more consistent tools for use in the performance
    evaluation process. This process has significantly assisted our new
    nurses in understanding role expectations as well as assisted our nurse
    leaders in clearly articulating expectations to the nursing staff. This
    process is ongoing and we are exploring the potential of expanding this
    concept to other MTFs. The Army Nurses from Hawaii are also in demand
    around the Pacific Rim and have established professional dialogue with
    the Royal Thai Nurses, The Australian Nurse Corps, and the New Zealand
    Defence Corps. In addition, Army Nurses have presented on clinical and
    professional nursing issues in Bangkok, Thailand and Hanoi, Vietnam. We
    will continue to sponsor this professional collaboration in the spirit
    of international cooperation and mutual benefit.
        Last year, we presented information on the Combat Trauma Registry
    initiative that was employed at Landstuhl, Germany and contained
    retrospective data entered on soldiers injured in Afghanistan in
    support of Operation Enduring Freedom. I am pleased to report that this
    database is now termed the Army Medical Department Theater Trauma
    Registry (AMEDD TTR) and is a web-based system, with DOD interface, now
    capable of concurrent data collection and casualty reporting. The AMEDD
    TTR collects data on all casualties, all U.S. military personnel and
    any NATO and allied military personnel and local nationals, treated at
    U.S. facilities in Operation Iraqi Freedom. Army Nurses in partnership
    with experts from the Institute of Surgical Research, Walter Reed Army
    Medical Center, Landstuhl Army Medical Center, the Armed Forces
    Institute of Pathology and the Navy Health Research Center have worked
    tirelessly on this project. It is expected that the results of this
    data collection and analysis will provide information pertinent in the
    development of improved medical training, equipment, and practice
    modalities for future operations.
        Army nurses continue to be at the forefront of nursing research
    focused on the five Army Nurse Corps research priorities of
    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.
        The Military Nursing Outcomes Database (MilNOD) project is now in
    the fourth year of study and incorporates research efforts across the
    military nursing services. The participating sites include Walter Reed
    Army Medical Center, Madigan Army Medical Center, Womack Army Medical
    Center, Dewitt Army Community Hospital, Malcolm Grow Air Force Medical
    Center, Naval Hospital Bremerton and Naval Hospital Whidbey Island.
    This project is collecting data to support evidence-based clinical and
    administrative decision-making and create a reliable and valid database
    consisting of standardized nurse staffing and patient safety data. In
    addition, the investigation team is working with the California Nursing
    Outcome Coalition (CalNOC), a repository of staffing and patient safety
    data from 120 California hospitals, to benchmark data from like
    facilities. Although still in progress, this project has resulted in
    very promising findings to include the development of staffing and
    patient safety reports for the Army hospitals. The content of these
    reports meets the JCAHO compliance measures for staffing effectiveness
    measures and is being used by the nursing leadership in staffing
    pattern decisions. In addition, the MilNOD data on patient safety
    related to pressure ulcers revealed that nurses at Walter Reed were
    noticing that some of the ill or injured patients returning from
    deployment were experiencing pressure ulcers. This finding led to a
    discussion of pressure ulcer prevention in the field setting and
    resulted in the sharing of pressure ulcer prevention protocols from the
    Medical Center with the Combat Support Hospital in theater. In
    addition, nurses determined that the field litters currently used to
    support and transport patients did not provide the necessary padding
    protection against the development of pressure ulcers. This finding
    opens up a whole new area for potential inquiry and intervention. The
    MilNOD project is a tremendous long-term effort by nurses in all three
    services and has now influenced the development of the Veteran's
    Affairs Nursing Outcomes Database (VANOD). This project truly
    demonstrates what is best about nursing research and Federal Nursing
    collaboration.
        Army nurse researchers at Madigan Army Medical Center have also
    developed 23 evidence-based standardized treatment guidelines for
    musculoskeletal injuries most common to soldiers. These guidelines
    provide information on patient education, exercise regimes with
    photographic aids, diagnostic information, and medical profile
    information. There have been hundreds of requests for these guidelines
    from deploying units as well as from providers at MTFs at home and each
    of these guidelines may be found on-line at the Madigan Army Medical
    Center website.
        Our Nursing Anesthesia students continue to add to our growing body
    of knowledge in nursing anesthesia care for our beneficiaries at home
    or our soldiers in a deployment setting. This past year, several
    studies were done on monitoring techniques, warming techniques, gender
    differences in medication dosage levels and the impact of medication
    use on pain perception. We are extremely proud of the research that all
    our students accomplish while they are completing very vigorous
    programs of study.
        Our civilian nurses are also very involved in nursing research.
    Nurse researchers at Fort Carson, CO received a National Institutes of
    Health grant to study self-diagnosis of genitourinary infection of
    deployed women. The study plan is to develop a safe and accurate field
    expedient self-diagnosis and treatment kit for genitourinary infections
    to be used by military women deployed to austere environments. In a
    preliminary study involving over 800 military women, the investigators
    learned that 87 percent of these women experienced symptoms of
    infection at some point during the deployment. Nearly half of the women
    reported that the symptoms resulted in decreased work performance and
    24 percent reported lost hours of work time. It is evident that the
    outcomes of this research could have a positive impact on readiness and
    women's health in the deployed environment. This study has far reaching
    implications for other humanitarian organizations that send women to
    areas in which the needed health care may not be readily accessible or
    available.
        The Army Nurse Corps research priorities are extremely timely and
    relevant to the research being conducted by our civilian nursing
    colleagues. A study recently completed in December 2003 by Lieutenant
    Colonel Patricia Patrician, an Army Nurse Corps researcher from Walter
    Reed Army Medical Center, focused on assessing the Army hospital work
    environment in order to describe the work environment attributes, nurse
    burnout, job dissatisfaction and intent to leave the Army workforce
    from the perspectives of military and civilian staff nurses. The second
    purpose was to compare these results to published reports from civilian
    hospitals. As we know, recruitment and retention has been tied to
    positive work environments, such as those that exist in magnet
    hospitals. The final sample from the Army study consisted of 957
    Registered Nurses who worked in inpatient settings within the Army's 23
    hospitals in the United States. The sample represented 64 percent
    civilian and 36 percent military nurses. The study results concluded
    that nurses working in Army hospitals rated Army hospitals more
    favorably as compared to the ratings of a group of civilian hospitals
    in terms of work environment. Nurses who work in Army hospitals
    experience less burnout and less job dissatisfaction than those in
    civilian hospitals. Finally, when taking into consideration normal
    military rotations and rotations within a hospital, Army nursing
    personnel are less likely than civilian nurses to leave their current
    positions within one year. Research of this nature helps us maintain
    our healthy work environment as well as remain competitive with our
    civilian counterparts in recruitment and retention.
        Our support and appreciation for the Uniformed Services University
    of the Health Sciences (USUHS) is also very strong. USUHS continues to
    provide us with professional nursing graduates who continue to excel in
    their programs of study and subsequent professional military careers.
    We are pleased that both the Clinical Nurse Specialist Program in
    Perioperative Nursing as well as the Doctoral Program in Nursing are
    successfully progressing in their inaugural year. These programs were
    established as a result of an identified need in the military services
    and the Graduate School of Nursing leadership and staff worked
    tremendously hard to develop and execute both of these programs. USUHS
    will continue to be our cornerstone educational institution and remains
    flexible and responsive to our Federal Nursing needs. We look forward
    to a continued strong partnership to maintain the necessary numbers of
    professional practitioners to support our complex mission.
        The Army Nurse Corps experienced the loss of two tremendous Army
    Nurse Corps officers this past year, one whose legacy of leadership and
    influence will forever have an impact on the Corps and one whose young
    career ended much too soon. Brigadier General (Retired) Lillian Dunlap,
    our 14th Chief, Army Nurse Corps, passed away in April 2003. She had a
    long and illustrious life, both personally and professionally. BG
    Dunlap served in the 59th Station Hospital in the southwest Pacific
    area of New Guinea, Admiralty Islands and the Philippines during World
    War II and during her 33 year career, held almost every position
    available in the Army Nurse Corps from staff duty nurse to nurse
    counselor, chief nurse, 1st U.S. Army during Vietnam, director of
    nursing services, instructor and director of nursing science at our
    Academy of Health Sciences. Without a doubt, one of BG Dunlap's most
    powerful and lasting achievements was the elevation of the educational
    level of nurses in the Army Nurse Corps. Her support and guidance
    assured the success of the baccalaureate degree in Nursing as the
    standard for entry into practice for Army Nurses--a standard that the
    Army Nurse Corps once again reaffirms today 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. BG (R) Dunlap's
    legacy will endure and she will be known as an Army nurse who opened
    many doors for the future of Army nursing and ``gave that handful
    more'' to everything that she did. We salute her self-less service.
        Captain Gussie Mae Jones was born in Arkansas and was one of eight
    children. She began her Army career by enlisting in 1988 as a personnel
    clerk and climbed to the rank of sergeant. In 1986, Captain Jones
    earned a bachelor's degree in business administration from Arkansas
    University Central. She was selected above her peers to attend the Army
    Enlisted Commissioning Program and earned her second bachelor's degree
    from Syracuse University in 1998. It was in nursing that she found her
    passion. Her career as a registered nurse and a commissioned officer
    began in September 1998 at Brooke Army Medical Center in San Antonio.
    After completing our specialty course in critical-care nursing in 2002,
    she was assigned to William Beaumont Army Medical Center, where she
    excelled in nursing in the intensive care setting. Assigned as a
    Professional Officer Filler (PROFIS) to the 31st Combat Support
    Hospital, Captain Jones deployed with her unit to Iraq in February of
    this year. An emerging leader and dedicated nurse, Captain Jones was
    admired by her fellow soldiers. On March 7, 2004, Captain Jones died of
    natural causes in Baghdad, Iraq surrounded by the soldiers with whom
    she served. Captain Jones devoted 15 years of her life to the service
    of her Country and the United States Army. She was a soldier and
    consummate professional nurse whom we are extremely proud to have had
    in the Army Nurse Corps. CPT Jones represents the best in Army nursing.
    We will never forget her sacrifice and willingness to serve. She will
    be sorely missed.
        Finally Senators, we are firmly determined to meeting and
    overcoming any challenge that we face this year and are committed to
    meet the uncertain challenges of the future. We will continue with a
    sustained focus on readiness, expert clinical practice, sound
    educational preparation, professionalism, leadership and the unfailing
    commitment to our Nation that have been distinguishing characteristics
    of our Army nurses and our organization for over 103 years. As I
    conclude my 32 years of service in the Army Nurse Corps, I am most
    proud of all the tremendous civilian and military nursing personnel
    that represent this great Army Nurse Corps. Thank you again for your
    support and for providing the opportunity to present the extraordinary
    efforts, sacrifices and contributions made by Army nurses who are all
    ready, caring and proud.

        Senator Stevens. Admiral Lescavage.

    STATEMENT OF REAR ADMIRAL NANCY J. LESCAVAGE, DIRECTOR,
                NAVY NURSE CORPS
        Admiral Lescavage. Good morning, Chairman Stevens, Senator
    Inouye. I am Rear Admiral Nancy Lescavage, the 20th Director of
    the Navy Nurse Corps and the Commander of the Naval Medical
    Education Training Command. It indeed is an honor and a
    privilege to speak before you during my third year in this
    position and to highlight the achievements and issues of our
    5,000 Navy nurses, both Active and Reserve.
        The Navy Nurse Corps' exceptional performance during the
    past year clearly demonstrates operational readiness as we
    continue to meet our primary mission. In support of Operation
    Iraqi Freedom, we had 500 nurses deployed and there were over
    400 filled reserve mobilization requests to maintain the
    continuum of care in our military treatment facilities. In
    addition, there were over 400 active and Reserve Navy nurses
    involved in additional training exercises.
        Through a variety of activities, ranging from direct care
    to the conduct of research in support of our operational
    forces, Navy nurse fleet support has been well received by our
    line community. For example, nurse practitioners assigned to
    the Norfolk Naval Base see fleet sailors on board ship or while
    underway. Through the newly established force nurse initiative
    with the U.S. Atlantic fleet and Pacific fleet, Navy nurses are
    now integral to fleet level oversight and lend guidance and
    assistance to aircraft carrier medical departments and our
    aviation squadrons.
        At our naval health research centers, Navy nurse
    researchers are leading the way in research projects focused on
    things like women's health initiatives and casualty care.
        Numerous training opportunities across the Federal and the
    civilian sectors have been essential to maintaining critical
    Navy nursing specialty skills that are required in the
    operational environment. As one example, over 50 Navy nurses
    have successfully rotated through the Navy trauma training
    program with Los Angeles (L.A.) County and the University of
    Southern California Medical Center to enhance their combat
    trauma skills. Also, through established agreements between six
    military treatment facilities and local trauma centers, an
    additional 50 Navy nurses have also benefitted from this
    specialized training.
        Across naval medicine, military and civilian nurses are
    leaders, clinical experts, and researchers in a variety of
    programs from population health to specific disease management.
    The Joint Population Health Office at Naval Medical Clinic
    Pearl Harbor has been labeled as a benchmark for population
    health in the Navy with their comprehensive screening and
    assessment program to individualize patient care.
        Through the vast worldwide case management program across
    Navy medicine, the collaborative efforts of 93 civilian nurse
    case managers have resulted in an estimated cost avoidance of
    $6.4 million through recaptured workload, decreased lost
    training days, and better managed care. In addition, innovative
    nurse managed clinics include a 24-hour/7-day-a-week nurse call
    center which supports increased accessibility, post-deployment
    stress briefings and disease management, to name a few.
        In the area of research, we value its contribution to
    quality patient care and the practice of our nursing
    professionals anywhere from utilizing evidence-based medicine
    to establishing innovative health care programs. Through a
    comprehensive research-based practice initiative, focused on
    patient falls, for example, National Naval Medical Center
    Bethesda has become a model in promoting patient safety for
    civilian, as well as our military facilities.
        As an outcome of one of our TriService nursing research
    program funded grants, we now assign more seasoned Navy nurses
    with specific critical care expertise to our aircraft carriers
    to better meet our operational mission. Many of our research
    grant findings are collaboratively shared across the services
    and presented worldwide at numerous professional conferences
    and in professional publications.
        Your continued support of TriService nursing research is
    greatly appreciated.
        With the Nation's focus on the overall nursing shortage, it
    is important to address our recruitment and retention efforts.
    Our goal is to shape the force with the right number of Navy
    nurses in the right specialties, more importantly at the right
    time in the right positions. That is done to meet our mission
    in all care environments and to become the premier employer of
    choice for our Navy nurses and civilian nurses.
        Naval medicine has historically been able to meet military
    and civilian recruiting goals and specialty nursing
    requirements to this point. We had a slow start this year,
    specifically in active duty recruiting, with our most recent
    report of attaining only 26 percent of our goal although we are
    only midway through the recruiting year. We have recently been
    successful in increasing the accession bonus, and that occurred
    late January of this year. We are also in the process of
    seeking funding for the health professional loan repayment
    program.
        Fortunately, the good news is we have other pipeline
    scholarship programs, for instance, our ROTC programs and
    seaman to admiral, to help meet our recruiting needs. Based on
    our projected gains and losses for this year, we predict a
    deficit of 98 for a desired end strength of 3,176 active duty
    nurses.
        As for our Reserve component, we are right on track with
    recruiting and we predict 100 percent fill of our billets. Our
    Reserve nurses are at 105 percent end strength.
        To meet nursing specialty mission requirements and promote
    retention, I do have to say our graduate education scholarship
    programs and specialized training for those on active duty have
    been extremely successful in retaining our active duty nurses.
    Our retention numbers are very high. Our Navy nurses love
    education. We continue to focus on our operationally related
    nursing specialties, for example, operating room, critical
    care, anesthesia, and emergency room nurses, as well as
    academic programs that will propel our nurses into the
    forefront of health care planning and policy in obtaining
    Ph.D.'s and MBA's and public health graduate degrees.
        In addition to civilian universities, we also send our
    students to the Uniformed Services University of Health
    Sciences. Your continued interest in the USUHS Graduate School
    of Nursing and their doctoral, perioperative, family nurse
    practitioner, and anesthesia nursing programs is greatly
    appreciated.
        In closing, I again do appreciate your tremendous support
    with legislative initiatives and the opportunity to share the
    accomplishments and issues that face our great Navy Nurse
    Corps. I consistently see our nurses as dynamic leaders and
    innovative change agents in all settings, both in our MTF's and
    in combat. I remain truly proud of the corps and our civilian
    nurses as they stand ready to promote, protect, and restore the
    health of all entrusted to our care.

                               PREPARED STATEMENT

        I look forward to continuing to work with you during my
    tenure as the Director of the Navy Nurse Corps. Thank you,
    sirs, for this great honor and privilege.
        Senator Stevens. Thank you very much.
        [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, the 20th
    Director of the Navy Nurse Corps and Commander of the Naval Medical
    Education and Training Command. It is an honor and a privilege to speak
    before you during my third year in this position and to highlight the
    achievements and issues of our 5,000 Navy nurses.
        Our performance during Operations Enduring Freedom and Iraqi
    Freedom clearly demonstrated operational readiness as we continue to
    meet our primary mission. I would now like to address Navy Nurse Corps
    impact in the areas of readiness and homeland security; nursing
    initiatives; education and training; jointness and research.

                        READINESS AND HOMELAND SECURITY

        In support of Operation Iraqi Freedom, we had 500 nurses deployed
    from over eighteen facilities to the Hospital Ship COMFORT, Fleet
    Hospitals, Casualty Receiving Treatment Ships, Shock Trauma Platoons,
    and with the Marines. To maintain the continuum of care back at our
    Military Treatment Facilities, there were over 400 filled Reserve
    mobilization requests, the second largest recall since Desert Storm. In
    addition, there were over 400 Active and Reserve Navy Nurses involved
    in training exercises, such as Fleet Hospital Field Training,
    Operational Readiness Evaluations, Hospital Ship MERCY Exercises, Cobra
    Gold, West African Outreach Program, Operation Arctic Circle and
    Combined Armed Exercises. Throughout all operations and exercises, our
    military and civilian nurses readily adapted; remarkably delivered
    outstanding care; and achieved mission accomplishment at our facilities
    and while deployed.
        In addition to meeting the medical needs of our Navy and Marine
    Corps team ``in theater,'' readiness also includes preparing health
    care personnel at Navy hospitals and clinics around the world to
    respond to a natural disaster or terrorist attack. Nurses are at the
    forefront of emergency preparedness across Naval Medicine in a variety
    of roles. Within Naval Medicine's Homeland Security Office at the
    Bureau of Medicine and Surgery, there are two Navy nurses executing a
    comprehensive ``Disaster Preparedness, Vulnerability, Analysis,
    Training and Exercise Program'' to identify vulnerabilities in training
    and to test each military treatment facility's emergency response plan.
    Their effectiveness was recently put to an immediate test during the
    third training day at Naval Hospital Charleston, when a real disaster
    occurred. Forty-four participants, two local hospitals and the
    Charleston County Emergency Medical System provided topnotch care for
    the casualties involved in a bus accident. In addition, we have several
    Navy nurses collaborating with local community disaster planning
    programs, promoting well-coordinated response plans, such as at Naval
    Hospital Pensacola and Naval Hospital Charleston.

    Training
        Optimizing available training opportunities across the Federal and
    civilian sectors is essential in maintaining critical nursing specialty
    skills that are required in all operational environments. Great success
    is attributed to the Navy Trauma Training Program in conjunction with
    the Los Angeles County/University of Southern California Medical
    Center, one of the nation's finest Level I Trauma Centers. Since its
    inception in the fall of 2002, over fifty Navy nurses have successfully
    rotated through this program to enhance their combat trauma skills and
    to further increase medical readiness with their respective platform
    teams. Due to intense follow-up with health care team graduates in the
    field, many operational lessons have been incorporated into their
    curriculum. The program has received positive national press coverage
    through television, nursing magazines and newspapers, praising the Navy
    faculty as experts in the most current trauma standards.
        Trauma training is further enhanced through established agreements
    between six military treatment facilities with local trauma centers and
    critical care settings for over 50 nurses at San Diego, Bethesda,
    Jacksonville, Camp Pendleton, Bremerton, and Charleston. Other training
    opportunities include web-based critical care courses, such as the
    ``American Association of Critical Care Nurses Essentials of Critical
    Care Orientation'' and other instructor presentations, which provide
    continuing education credit. To support dual critical specialty skills
    in the operational environment, the Association of Perioperative
    Registered Nurses nursing curriculum for Perioperative Nurses Training
    has been adapted for critical care nurses. As an adjunct to traditional
    platform training, the nursing staff at Naval Medical Center San Diego
    conducted ``Operational Skills Days'' to enhance their clinical skills
    and didactic foundation. When operational needs required immediate
    training, Navy nurses were sent to Naval Hospital Okinawa to assist
    with Forward Resuscitative Surgical System training.
        In short, our Senior Nurse Executives are very resourceful in
    seeking educational resources and skills enhancement training to meet
    platform and specialty requirements, particularly when located in
    smaller, remote facilities or overseas. These clinical training
    opportunities have also expanded to other required nursing specialties,
    such as labor and delivery, nursery and mother infant nursing for our
    Naval Hospitals at Guam and Keflavik through clinical programs in
    facilities stateside and overseas. In addition, we continue to place
    strong emphasis in developing a solid clinical foundation for our
    graduate nurses through Nurse Intern Programs at several of our
    facilities, providing a good mix of clinical rotations tailored to
    varied patient acuity and specialties resulting in better prepared
    nurses.
        Related to operational training while supporting community needs, I
    would like to highlight three unique military training exercises. The
    Civil-Military Innovative Readiness Training Program with our reserve
    nurses helps to rebuild America in underserved areas through Operation
    Arctic Care in Alaska. Partnership efforts include regional, state and
    local communities with Guard and Reserve units in providing exceptional
    medical care. Through our nurses' sound leadership and detailed
    coordination in the deployment and movement of these units, operational
    and combat readiness skills of the military units are enhanced. While
    on the exercise, the health care team on the Hospital Ship MERCY
    provided medical care to eighty-three Seattle veteran-eligible patients
    last summer, lauded by the Seattle Post for their community support.
    While in the Pacific Northwest, our health care professionals met with
    Canadian health care counterparts to discuss response plans for a major
    earthquake scenario. In addition, during the recent Southern California
    fire, our hospital ship provided housing and hot meals for over 100
    military families.

    At the Deckplate
        The expanding direct Fleet support by our Navy nurses has been well
    received by the Navy and Marine Corps communities. Our two nurse
    practitioners assigned to the Norfolk Naval Base see 300 Fleet sailors
    a month onboard ship or while underway for wellness and readiness
    efforts alone. They also function as trainers and consultants and have
    developed a CD-ROM for Fleet implementation of the Preventive Health
    Assessment Program. Women's Health Nurse Practitioners have provided
    clinical exams for females onboard the U.S.S. Kennedy and also serve as
    instructors for the gynecological portion of the Independent Duty
    Hospital Corpsman curriculum. Through the newly-established Force Nurse
    Initiative with Commander, Naval Air Force U.S. Atlantic Fleet and
    Commander, Naval Air Force U.S. Pacific Fleet, two Navy nurses are now
    integral to Fleet level oversight, guidance and assistance to aircraft
    carrier medical departments and aviation squadrons. Professional
    nursing and technical recommendations are also provided on Force Health
    Protection, Shipboard Medical Training, Medical Department Quality
    Assurance, Infection Control, the acquisition of new medical equipment
    and other programs.
        Preventive Health Assessment Nurse-Run Clinics, such as in our
    Naval Hospitals at Pensacola and Corpus Christi, have been praised by
    the Navy Line Community for promoting healthy, physically fit Naval
    Forces as program compliance dramatically increased. With the addition
    of a mental health clinical nurse specialist, the Outreach Program at
    Corpus Christi has further expanded suicide awareness briefs and other
    services.
        Within the operational nursing division at our Naval Health
    Research Centers, our nurse researchers are leading funded research
    projects focused on women's health issues and casualty care. In
    addition, they collaboratively developed research-based methods for
    providing surgical support during special operations at sea and in
    caring for the Medical and Security forces at Camp Delta in Guantanamo
    Bay, Cuba. These are just a few examples of how Navy nurses at the
    deckplate are involved in diverse activities ranging from direct care
    to the conduct of research in support of our operational forces.

                              NURSING INITIATIVES

        Across Naval Medicine, Navy nurses are involved in the planning and
    implementation of a variety of programs as leaders, clinical experts
    and researchers from population health to specific disease management.
    Military and civilian nurses are valued catalysts across our facilities
    directing patient safety initiatives and leading collaborative teams to
    evaluate patient outcomes that reduce error, variability, and cost.
    Several nursing initiatives include implementation of the JCAHO
    National Patient Safety goals, skin care studies, staffing
    effectiveness project, the management of diabetic patients, inpatient
    bed utilization, and medication/non-medication related near misses and
    actual events.
        Navy nurses at our three Healthcare Support Offices have been
    primary movers in linking the clinical aspects of Naval Medicine with
    strategic and annual business planning efforts to create more efficient
    practices and improve outcomes. Their most significant impact is in
    relating the clinical processes to business rules and interpreting the
    data relative to true clinical practices. In addition, nurse leaders
    and researchers are very involved with Navy Advisory Boards, Joint
    Readiness Clinical Advisory Boards and nationwide studies to
    collaborate on clinical advances and identify specific metrics to
    demonstrate efficient business practices.

    Joint Population Health Programs
        Through the Joint Population Health Program across three
    California-based Naval Hospitals at San Diego, Camp Pendleton, and
    Twenty-Nine Palms, masters and doctorally-prepared nurses demonstrate
    savvy in program implementation, policy, practice and research to shape
    the health status of Naval forces and all eligible beneficiaries, while
    focusing on quality, cost and access. The Joint Population Health
    Office at Naval Medical Clinic Pearl Harbor, Hawaii has been labeled as
    a benchmark for population health in the Navy. Based on a comprehensive
    screening and assessment process, the program addresses Preventive
    Health Assessments (Active Duty); adult and children immunization and
    health maintenance status; and health education literature and classes
    based on individual needs. Statistically proven results support the
    benefits of both of these programs.

    Case Management
        In today's rapidly changing health care environment, nurse case
    managers play a crucial role in helping patients and providers select
    the most appropriate level of care in the most cost-effective setting.
    Optimal outcome is best exemplified through the Case Management Program
    across Navy Medicine based on the collaborative efforts of 93 civilian
    nurse case managers. Their focus on Active Duty, Exceptional Family
    Member Program families, patients with multi-system medical problems,
    targeted disease management entities and frequent emergency room users
    resulted in recaptured workload, decreased lost training days, enhanced
    patient/provider satisfaction and better managed care. The Active Duty
    Trauma Nursing Case Management Program at Naval Medical Center, San
    Diego coordinated the health care needs of 87 Operation Iraqi Freedom
    wounded and 233 non-operational trauma patients. Among other programs,
    such as at Naval Hospital Guam, nurse case managers have been
    responsible for reducing emergency room visits and inpatient admissions
    for chronically ill patients by responding to hundreds of consults and
    processing catastrophic, complex, high risk, high-cost health care
    requests.

    Nurse-managed Clinics
        The rise in nurse-managed or nurse-run clinics has demonstrated the
    art and science of nursing in facilitating wellness, prevention and
    health maintenance towards self-management for patients. The nature of
    registered nurse practice in collaboration with physician champions
    meets the standards of the American Academy of Ambulatory Nurses
    through the use of research-based clinical practice guidelines,
    spanning across the spectrum from neonates to geriatric patients.
        Using the latest technological advances in wound care, nurses at
    Naval Hospitals Pensacola and Portsmouth enhance the care of complex
    battlefield injuries. Within Family-Centered Care, nurses plan,
    coordinate, and provide direct care and case management through a
    variety of programs, such as Postpartum Care Clinics. Home Action Plans
    for Pediatric Pulmonary patients at three of our facilities reduced
    admission rates by 50 percent. Other innovative nursing initiatives
    include: a nurse call center supporting 24/7 accessibility; post-
    deployment stress briefings; and disease management (diabetes,
    hyperlipidemia, and hypertension), to name a few.
        Successful open access initiatives as a result of the innovative
    leadership of nurses at Naval Hospitals Pensacola and San Diego have
    increased patient satisfaction; decreased emergency room visits and
    unscheduled walk-in appointments; and improved patient/provider
    matching. With the assistance of the Institute for Healthcare
    Improvement at Naval Hospital Great Lakes, demand and patient flow
    processes were reviewed; inefficiencies were identified; new business
    plans were developed; and appointments were adjusted to maximize
    access. Success has migrated these processes to other clinics and
    clinical support areas as well.

                                    RESEARCH

        We value research as an essential component to quality nursing
    care, from utilizing evidence-based practice to conducting research.
    For example, at Naval Medical Center Portsmouth, adult patients with
    bladder problems are now scanned for urinary retention resulting in an
    87 percent reduction in catheterizations. Upper respiratory infection,
    urinary tract infection, diabetes and asthma clinical practice
    guidelines have improved clinical parameters and therefore decreased
    the number of appointments. In support of patient safety, an evidenced-
    based practice initiative for a more comprehensive risk assessment and
    protocol for ``falls'' was implemented at National Naval Medical Center
    Bethesda and has become a model for civilian and military facilities.
    The Sports Medicine and Reconditioning Team at Naval Medical Center San
    Diego includes a nurse researcher to evaluate ``return to duty'' time
    and re-injury rates of our Sailors and Marines to identify areas for
    improvement. Through a multidisciplinary research study, MedTeams
    strive to eliminate errors in the obstetrical area, increase patient
    satisfaction, and enhance collegiality and collaboration among health
    care professionals.
        We continue to focus on advancing the practice of military specific
    nursing and its response to requirements of military readiness and
    deployment. The TriService Nursing Research Program has conducted Grant
    Management Workshops, which provided invaluable mentorship and
    training, resulting in an increased number of higher quality grant
    submissions. Research results are collaboratively shared across the
    services and are further disseminated to other facilities. Many of our
    research grant findings have been presented worldwide in numerous
    nursing conferences and in at least ten professional publications.

                               JOINT INITIATIVES

        There are several examples of joint programs across our Federal
    agencies, which combine the talent of our health care teams to provide
    quality care. Nurses at Naval Hospital Great Lakes are involved in
    coordinating a partnership program for active duty treatment and
    inpatient care with the North Chicago Veterans Affairs Medical Center.
    Nurses at Naval Hospital Corpus Christi are involved in the business
    planning and management of specialty care with their local Department
    of Veterans Affairs Hospital.
        Combined training initiatives and the mutual sharing of clinical
    expertise are beneficial, particularly for our overseas duty stations.
    Noteworthy coordinated efforts include a mental health nursing program
    with Walter Reed Army Medical Center in Washington, DC; an Obstetrics
    Course at Langley Air Force Hospital; Labor and Delivery training at
    Landstuhl Army Medical Center; assisting Madigan Army Medical Center
    with their medic (Licensed Practice Nurse) clinical training; and
    providing Advanced Cardiac Life Support and Pediatric Advanced Life
    Support classes for the Air Force at our Naval Medical Clinic in
    London.

                     PROFESSIONAL NURSING IN NAVAL MEDICINE

        Our goals are to shape the force with the right number of people in
    the right specialties, to meet the mission in all care environments,
    and to become the premiere employer of choice. Accomplishing this
    requires close attention to the national nursing issues; the pursuit of
    available recruitment and retention initiatives; and the alignment of
    our military and civilian nurses to meet Naval Medicine needs.
        The Department of Health and Human Services and other independent
    studies project that the current national nursing shortage of several
    hundred thousand registered nurses may add up to 750,000 by 2020.
    Despite recent increases in the number of nursing school entrants, the
    nation could have a long way to go in making a dent in the overall
    shortfall. We carefully monitor civilian compensation packages to
    maintain the strength of our military and civilian nursing work force
    by offering a variety of incentives.

    Recruitment and Retention
        Through our diversified accession sources, pipeline scholarship
    programs, pay incentives, graduate education programs, specialized
    training opportunities and varied retention initiatives, Naval Medicine
    has historically been able to meet military and civilian recruiting
    goals and specialty nursing requirements to this point. We presently
    have 96.4 percent of our authorized active duty billets filled and 100
    percent fill for our Reserve component. We continue to focus on our
    operationally-related nursing specialties, such as medical-surgical,
    critical care, perioperative and anesthesia, as well as women's health
    nurse practitioner and certified midwives. Although we had a slow start
    in recruiting this year when compared to the past 10 years, we expect
    to meet our active and reserve recruiting goals this fiscal year.
        Our civil service workforce challenges have been identified in
    remote locations stateside and overseas, as well in certain
    specialties, such as labor and delivery. Recruiting and retention
    incentives are utilized and career ladders initiated where possible.

    Graduate Education
        Graduate education program and specialized training have been
    extremely successful in meeting our nursing specialty mission
    requirements and promoting retention. This year, we are sending two
    nurses to the recently established Doctoral Program at the Uniformed
    Services University of Health Sciences (USUHS). In addition, we
    continue to send several of our students to the USUHS anesthesia,
    family nurse practitioner and perioperative nursing programs.

    Nurse Leadership
        Navy nurses continue to function in pivotal executive roles to
    impact legislation, health care policy and medical delivery systems.
    Executive nurse leaders in the Active and Reserve component are in key
    command positions as Commanding Officers and Executive Officers; at the
    Bureau of Medicine and Surgery Headquarters as Deputy Surgeon General
    and Deputy Directors; and other staff positions at Tricare Management
    Activity, Health Affairs.
        As leaders, we value mentorship, which is accomplished via many
    innovative formal programs and informal forums with our enlisted
    personnel, Naval Reserve Officer Training Corps students, Medical
    Enlisted Commissioning Program students, junior nurses, and novice
    researchers.

    Recognition
        Our nurses are recognized for their exceptional talent, outstanding
    leadership and professional nursing community involvement and have
    received clinical practice awards through the American Association of
    Critical Care Nurses, the Sigma Theta Tau Nursing Honor Society; the
    Association of Women's Health, Obstetric and Neonatal Nurses; and the
    American Academy of Ambulatory Care Nurses. Our integral presence has
    also been documented through an extensive list of journal publications.
    For example, the June 2003 Critical Care Nursing Clinics of North
    America was specifically dedicated to military and disaster nursing. In
    addition, our professional achievements have been highlighted in many
    forums at the Academy of Medical-Surgical Nurses Conference, the
    Association of Perioperative Nurses Workshop, the California Nurse
    Leader Workshop, and at the Institute for Health Care Improvement
    Conference.

                                   CONCLUSION

        In closing, I appreciate the opportunity to share the
    accomplishments and issues that face the Navy Nurse Corps. I see our
    nurses as dynamic leaders and innovative change agents in all settings.
        I remain truly proud of our Navy military and civilian nurses as
    they stand ready to promote, protect, and restore the health of all
    entrusted to our care anytime and anywhere.
        I look forward to continuing to work with you during my tenure as
    the Director of the Navy Nurse Corps. Thank you for this honor and
    privilege.

        Senator Stevens. General Brannon, my daughter is taking
    Chinese and she has learned to read from right to left. I have
    not, so although you do have the star, I start from the left.
    Please proceed.

    STATEMENT OF MAJOR GENERAL BARBARA C. BRANNON,
                ASSISTANT AIR FORCE SURGEON GENERAL,
                NURSING SERVICES
        General Brannon. Thank you, Chairman Stevens, Senator
    Inouye. It is a great honor and pleasure to again represent
    your Air Force nursing team. What a dynamic time in the history
    of our Nation. Our soldiers, sailors, airmen, and marines
    continue to valiantly support the global war on terrorism in
    dangerous and unpredictable environments. They can count on the
    support of Air Force nursing, active duty, Guard, and Reserve,
    officer and enlisted. We are one team ready anytime to go
    anywhere at our Nation's call to provide robust medical support
    to combat units, to victims of natural disasters, and to those
    in need of humanitarian or civic assistance.

                                      IRAQ

        To support Operations Enduring Freedom and Iraqi Freedom,
    2,328 nurses and medical technicians deployed as members of 24
    EMEDS units, treating more than 200,000 patients, combat
    casualties and those suffering non-combat injury and disease.
    Six nurses provided outstanding leadership as EMEDS commanders
    in diverse locations around the globe.

                             AEROMEDICAL EVACUATION

        Aeromedical evacuation is a vital link in combat casualty
    care and a key Air Force capability. Since last spring, we have
    flown over 3,200 missions and supported more than 40,000
    patient transports. Our ability to provide critical care in the
    air, using specialized transport teams, has bridged the gap
    between point of trauma and definitive medical treatment.

                                   RECRUITING

        Air Force independent duty medical technicians provide
    vital care in remote and deployed locations. They are jacks of
    all trades, from providing medical and dental services, to
    protecting troops from bioenvironmental hazards.
        On the home front, we continue to aggressively organize,
    train, and equip the nursing forces we need. A robust
    recruiting program is essential to keep our nurse corps strong.
    Fiscal year 2003 was our most successful recruiting year since
    1998, yet we were still 100 nurses below our requirement.
    Thanks to your tremendous support, this year we are offering an
    increased accession bonus or loan repayment to new accessions.
    We are optimistic that this will result in a more successful
    recruiting year.

                                   RETENTION

        Retention is the other dimension of force sustainment. Air
    Force retention remains strong at 93 percent. So despite
    missing our requirement for 5 years, we were only 118 nurses
    below our authorized end strength last year.
        Education and training and research ensure we deliver top
    quality nursing care. Air Force nurse researchers stay on the
    cutting edge of military nursing science, and I am proud to
    report that 21 are actively engaged in Tri-Service nursing
    research program studies with a very strong emphasis on
    operational research.

                             EDUCATION AND TRAINING

        The Uniformed Services University Graduate School of
    Nursing is aggressively developing programs to meet the needs
    of Federal nurses. Their new perioperative clinical nurse
    specialist program is the only one in the Nation and includes
    preparation for practice in deployed environments. Three Air
    Force nurses are in the inaugural class.

                                    RESEARCH

        Their new Ph.D. program will promote nursing research
    relevant to Federal health care and to military operations.
    Although the program is in its first year, the response has
    been overwhelming with 12 nurses currently enrolled.
        We continue to look for opportunities to capitalize on the
    strength of our enlisted force and to provide avenues for
    progression to a bachelor's degree in nursing. There is great
    interest in the programs and growing our own nurses will
    provide a strong nurse corps and ease our recruiting
    requirements.
        This has truly been an extraordinary year for our nurse
    corps and we have reached two major milestones. Colonel Melissa
    Rank's nomination to Brigadier General marks the first nurse
    corps selection at an all-corps promotion board, and as you
    mentioned, I was also promoted to Major General in August and I
    am truly honored by the trust that has been placed in me.

                               PREPARED STATEMENT

        Mr. Chairman, Senator Inouye, I am very proud to lead the
    19,000 men and women of Air Force nursing, active duty, Guard,
    and Reserve. Thank you for your tremendous support and for
    again allowing me to share Air Force nursing accomplishments
    and just a few of our plans for the future.
        [The statement follows:]

             Prepared Statement of Major General Barbara C. Brannon

        Mister Chairman and distinguished members of the committee, it is
    an honor and great pleasure to again represent your Air Force Nursing
    team. What a dynamic time in the history of our nation! Last year, at
    this time, our allied forces had toppled the regime of Saddam Hussein
    and focus had shifted to peacekeeping and humanitarian relief for the
    Iraqi people. Today, the fighting continues and our soldiers, sailors,
    marines and airmen continue to make the ultimate sacrifice for their
    nation. Terrorist organizations continue their campaign of carnage
    throughout the world, and horror is commonplace on front-page news.
    This war is far from over.
        Our nation has expressed pride and grateful appreciation for the
    selfless sacrifice of our soldiers, sailors, airmen and marines. The
    American Soldier is Time magazine's Person of the Year. And the
    American public holds the nursing profession in very high esteem. In a
    recent Gallup poll, Nursing was rated the most honest and ethical
    profession.
        As our military men and women fight far from home, they count on
    great medical support in theater and for their loved ones at home.
    Nursing plays a pivotal role in Air Force healthcare in both arenas.
    Lieutenant General Taylor has highlighted the importance of Preventive
    Health Assessments, Individual Medical Readiness, and post-deployment
    health assessments. All these programs, in which nursing personnel have
    key administrative roles, have been integral to the success of
    deployment health. The disease non-battle injury rate of 4 percent for
    this conflict is the lowest ever achieved. That translates to more
    healthy people ready to execute the mission.
        Active duty, guard and reserve Nurse Corps officers and aerospace
    medical service technicians also serve around the world to provide
    robust medical support to our combat units, victims of natural
    disasters, and those who need humanitarian or civic assistance. It is
    my honor to share some of our activities in support of deployment and
    training and some of the stories of our everyday heroes.
        Our first priority, and our greatest success, is our ability to
    maintain constant mission readiness for any contingency. We deploy
    anytime, anywhere at our nation's call. To support Operations ENDURING
    FREEDOM and IRAQI FREEDOM, 725 nurses and 1,603 medical technicians
    deployed as members of 24 Expeditionary Medical Support units, or
    EMEDS. Five of these deployed units have been equipped with chemical
    and biological protection to counter potential threats. Our EMEDS teams
    have treated more than 171,000 casualties, those injured in combat and
    those with non-combat injuries and disease. I am very proud to report
    that six nurses were deployed as EMEDS commanders during the past year.
    These nurse leaders, in charge of deployed wing medical facilities,
    were absolutely outstanding in meeting healthcare needs of combined and
    coalition forces in such diverse locations as Saudi Arabia, Romania,
    the United Arab Emirates, Bahrain, and Diego Garcia.
        Aeromedical Evacuation has had a starring role in Operation IRAQI
    FREEDOM and continues to be a critical core competency for the Air
    Force. It is battle tested and it works, providing state-of-the-art in-
    flight medical care for transport of U.S. and coalition forces. The
    system has exceeded all expectations in providing life-saving care
    during transport of the sick and injured from battlefields to their
    home units. Since last spring, we have flown over 3,200 missions and
    supported more than 40,000 patient transports without a single in-
    flight combat-related death. We have transformed the aeromedical
    evacuation system from one relying on specific aircraft and dedicated
    missions, to an integrated multiplatform capability, which uses
    available aircraft and prepositioned aeromedical evacuation crews.
    Through the vision and ingenuity of our leadership, we have overcome
    numerous challenges and have continued to move forward, demonstrating
    flexible, timely support to combat operations.
        Our Flight Nurses and Aeromedical Evacuation Technicians are
    seamlessly integrated with Medical Service Corps Officers, front-end
    aircrews, maintenance crews, and ground medical units in areas of
    operations. Combining the capability of the Critical Care Air Transport
    Teams (CCATT) with Aeromedical Evacuation crews has brought definitive
    care closer to the point of injury, faster than ever before. The
    additional capabilities of the CCATT makes it possible to safely
    transport stabilized patients by air, reduces the requirement for in-
    theater beds, and gets injured troops to definitive care in hours
    rather than days.
        Major Dan Berg was a member of the Critical Care Air Transport Team
    that cared for a 19-year old soldier whose convoy had been hit by
    rocket-propelled grenades. Major Berg provided care to the critically
    injured patient throughout the 10\1/2\ hour flight. Only able to
    communicate by writing on a notepad, the young soldier wrote that he
    never expected such care so far from home. Major Berg showed the young
    man his flight suit patch, which bore the promise, ``Committed to the
    Wounded Warrior.''
        Nurses play a vital role in tailoring the aeromedical evacuation
    system to meet needs of our forces. The Andrews AFB team converted the
    base gymnasium into a 100-bed contingency aeromedical staging facility
    (CASF). Eighty-five medical professionals activated from the 459th
    Aeromedical Staging Squadron staffed the facility, working with a
    smaller active duty team from the 89th Medical Group. During peak
    operations, personnel at the CASF managed up to 6 inbound overseas
    missions per week with 50-70 patients per mission. Many of the patients
    were transported directly from the flight line to Walter Reed Army
    Medical Center and the National Naval Medical Center, but up to 92
    patients remained overnight in the CASF for further air transport.
    Within the past 12 months, the CASF team supported over 850 aeromedical
    evacuation flights and coordinated over 15,700 patient movements. Great
    teamwork between our Air Force components and sister services made this
    mission a resounding success.
        Seamless integration with the medical teams of our sister services
    has been critical in many locations during Operation ENDURING FREEDOM
    and IRAQI FREEDOM. Major Kathryn Weiss, a nurse anesthetist from
    Hurlbert Field, deployed with the Army's 10th Special Forces Group to
    Northern Iraq to provide frontline emergency medical capabilities in an
    imminent danger area within the range of enemy artillery. The team
    treated casualties suffering from bullet and shrapnel wounds as well as
    those injured in motor vehicle crashes. The team was recognized by the
    award of the Bronze Star for their meritorious achievements.
        Major Weiss is just one example of the tremendous capability of our
    Certified Registered Nurse Anesthetists. They are frequently part of
    our Mobile Field Surgical Teams, substituting for anesthesiologists.
    Seventeen of the twenty-seven certified registered nurse anesthetists
    who deployed in 2003 were filling anesthesiologist taskings and
    provided top-notch surgical support.
        Our Air Force Independent Duty Medical Technicians are linchpins in
    health care delivery in remote and deployed locations. They are ``jacks
    of all trades'' and masters of health care modalities from routine and
    emergency medical and dental care, to biomedical environmental
    management. IDMTs are invaluable in the full spectrum of military
    missions to include Special Operations, EMEDS, Forward Air Controllers,
    Combat Communications and coalition team activities.
        Recently one of our IDMTs, MSgt James Koss from Tyndall Air Force
    Base, accompanied a coalition force in Iraq and provided support in
    medical intelligence, personnel and field sanitation, force protection,
    medical pre-screening and coordination of medical care. His preventive
    health initiatives were key to a low rate of heat related injuries and
    disease outbreaks.
        In Iraq, Nurse Corps Colonel David Adams, Director of Force Health
    Operations for the Office of the Assistant Secretary of Defense for
    Health Affairs, served as Chief of Strategic Planning for the Coalition
    Provisional Authority in Baghdad. Colonel Adams assisted the Minister
    of Health in identifying healthcare system needs and then coordinating
    support from other nations. Colonel Linda McHale, an Air Force Reserve
    Individual Mobilization Augmentee is mobilized to work with the Iraqi
    Minister of Health in establishing training programs for nurses and
    medical technicians.
        In French Village, Iraq, a three-member team from the 122nd Indiana
    Air National Guard Fighter Wing set up a medical clinic to restore
    health care for the villagers after their civilian clinic had been
    looted and destroyed by insurgents earlier in the year. Captain (Dr.)
    Jeff Skinner, Senior Master Sergeant Tommie Tracey and Senior Airman
    Matt Read collected donations of essential items for the clinic,
    including children's vitamins and a play set for the waiting room. When
    all was ready, they assisted with the grand opening of the new
    facility.
        In addition to providing service in Operation ENDURING FREEDOM and
    IRAQI FREEDOM, Air Force Nursing actively supports Homeland Security
    and humanitarian relief. Air Force Lieutenant Colonel Linda Cashion,
    Chief of Air Force Homeland Security Medical Operations, was the first
    nurse to complete a fellowship with the National Disaster Medical
    System, part of the Federal Emergency Management Agency. She provided
    valuable assistance in planning and implementing the Disaster Relief
    Program and expertly developed the nursing role for Disaster Medical
    Assistance Teams. Colonel Cashion was also instrumental in coordinating
    care for 26 critically burned victims in the Rhode Island nightclub
    fire.
        Air Force nursing support of humanitarian missions reaches around
    the globe. Chief Master Sergeant Virginia Thompson, an Air Force
    aeromedical technician at Randolph Air Force Base, participated in a
    two-week mission to El Salvador last year where the team of eleven
    medical personnel treated 3,000 patients. This humanitarian mission not
    only advanced host-nation health, but also afforded our military
    medical personnel valuable experience applicable to future humanitarian
    missions.
        During another humanitarian effort, First Lieutenant Lynn
    Zuckerman, Master Sergeant Baron Stewart and Staff Sergeant Patricia
    Fernandez from the 375th Medical Group, Scott Air Force Base were part
    of an eight person team that participated in a U.S. Southern Command
    sponsored mission to Guatemala. The team provided medical care to the
    under-served Guatemalan population in the isolated villages of San
    Sebastian, San Jose Caben, Rincon and Chim. During this mission, 5,600
    patients received treatment for a wide range of conditions including
    gastrointestinal illnesses from parasitic infection and chronic
    debilitating disease from arthritis and heart disease.
        Air Force nursing vigorously supports international partnerships.
    Personnel from the 435th Medical Group, Ramstein Air Base, participated
    in EUCOM-directed multinational mass casualty exercise. Nurses and
    medical technicians trained over 100 medical students in Georgia, the
    independent state of the former USSR, on a variety of skills to include
    moulage, self-aid buddy care, and advanced trauma management. The team
    also improved medical support in the community by training 30 local
    civil defense authorities in mass casualty and disaster management. The
    U.S. Ambassador to Georgia praised the team's tremendous support in
    providing much-needed training.

                               SKILLS SUSTAINMENT

        Air Force medics could not succeed in our expeditionary deployments
    without targeted training to ensure clinical currency. The Readiness
    Skills Verification Program (RSVP) continues to ensure that our
    personnel are trained in the wartime skills they need and that they
    stay current in those skills. The training is accomplished at home
    station and at multiple off site locations. As I mentioned last year,
    at our Centers for Sustainment of Trauma and Readiness Skills (C-STARS)
    programs, we partner with civilian academic centers to immerse our
    nurses, medical technicians, and physicians in all phases of trauma
    management to sharpen combat casualty care skills.
        We now offer this terrific program at three locations: The Shock
    Trauma Center in Baltimore, The University of Cincinnati Medical
    Center, and Saint Louis University Hospital. By expanding the program,
    we have been able to train more medics each year. Over the last 2\1/2\
    years, 334 nurses and medical technicians have completed the training;
    almost half of these were trained in 2003.
        First Lieutenant John Cleckner, a critical care nurse preparing to
    deploy on an EMEDS validated the program's importance by saying, ``This
    experience allowed me to significantly update and hone my trauma
    skills. Now I'm confident that I am ready.''
        As part of the C-STARS program, nurses complete an Advanced Trauma
    Life Support Course, and medical technicians complete the Pre-Hospital
    Trauma Life Support course. Both courses teach aggressive trauma care
    techniques and how to adjust standard treatment when projectiles and
    velocity impact the victim. These competencies are essential to care of
    wartime casualties.

                            RECRUITING AND RETENTION

        We have a robust recruiting program, which is essential to keeping
    the Nurse Corps healthy and ready to meet the complex challenges in
    healthcare and national security. Numerous incentive programs have been
    instituted to prevent a nursing shortage in the Air Force, but
    shortfalls continue to be an enormous challenge both nationally and
    internationally. Last year, the Bureau of Labor Statistics reported
    that registered nurses are at the top of ten occupations with the
    largest projected job growth through the year 2012. One positive sign
    is that the number of enrollments in entry-level baccalaureate programs
    increased by 16.6 percent last year, although there were an additional
    11,000 qualified students turned away due to limitations in faculty,
    clinical sites, and classrooms. Employer competition for nurses will
    continue to be fierce and nurses have many options to consider.
        Quality of life and career opportunities, coupled with other
    incentives, are critical recruiting tools for Air Force Nursing. Fiscal
    year 2003 was our most successful recruiting year since 1998. Although
    we have recruited approximately 70 percent of our goal each year since
    fiscal year 1999, we have seen an increase in the number of new
    accessions each year. Last year, we recruited 16 percent more nurses
    than in fiscal year 2002, and I attribute the increase largely to our
    educational loan repayment program. In order to compensate for our
    current shortfall and projected separations, our fiscal year 2004
    recruiting goal is 394 nurses. Funding is available to offer new
    accessions either a $10,000 accession bonus or up to $28,000 for
    educational loan repayment. We have $5.2 million available to fund
    these initiatives in fiscal year 2004 and are hopeful that our
    accession numbers will exceed last year. As of March 31, 2004, we have
    brought 108 new nurses onto Active Duty--on par with last year and
    about 27 percent of goal. We attract some of the best nurses in the job
    market today, although most are very junior with respect to experience
    level.
        This year we continue to recruit nurses up to the age of 47 to
    boost our ranks. We commissioned 25 nurses over age 40 last year, and
    although they are not retirement eligible, they provide tremendous
    support during their time on active duty. They have the critical skills
    and clinical leadership we need to meet our peacetime and wartime
    readiness mission, as well as years of clinical experience to share
    with our novice nurses.
        Our slogan, ``we are all recruiters,'' continues to rally support
    as we tackle the challenge of recruiting. I have fostered more
    effective partnering with recruiting teams to maximize recruiting
    strategies and success. Among other activities, we have increased
    nursing Air Force ROTC quotas from 29 in fiscal year 2003 to 35 in
    fiscal year 2004, and 100 percent of our quotas have been filled.
        I take advantage of every occasion to highlight the tremendous
    personal and professional opportunities in Air Force Nursing. I
    encourage nurses to visit their alma mater and nursing schools near
    their base to market quality of life and professional opportunities as
    an Air Force Nurse. This has proven to be a powerful recruiting tool.
        We have also expanded media exposure of the outstanding
    accomplishments of our people and their support of troops in Operation
    IRAQI FREEDOM. This past fall, Secretary of Defense Rumsfeld's visit
    with our aeromedical evacuation teams in Baghdad was highlighted in
    print media, and Major Keith Fletcher, an Air National Guard Nurse from
    the 379th AES Mobile Aeromedical Staging Facility, was featured in a
    photo with the Secretary. Air Force Reserve nurse Major Tami Rougeau
    was selected as one of the ``Heroes Among Us'' by the National Military
    Family Association, and she rode in the Rose Bowl Parade with other
    honorees. Another Air Force Nurse Corps star, Captain Cynthia Jones
    Weidman of Scott Air Force Base, Illinois, was awarded the American Red
    Cross Florence Nightingale Medal, one of the highest honors in the
    nursing profession. She was the first Air Force Nurse to receive the
    medal, and the first military nurse since 1955. Air Force nurses
    present very positive images in the news.
        Retention is the other key dimension of force sustainment. Our
    retention remains strong at 93 percent and, despite not meeting our
    recruiting goal for five successive years, we were only 143 nurses
    under our authorized end strength of 3,862 at the end of fiscal year
    2003.
        Lieutenant Colonel John Murray, one of our doctorally-prepared
    Nurse Corps officers, developed a standardized, web-based officer
    assessment tool to identify what influences officers to remain on
    active duty or separate from the Air Force. The pilot study began in
    January 2004 with a sample of Nurse Corps officers. The assessment tool
    will help identify targets of opportunity to enhance quality of life
    and professional practice. We continue to recommend Reserve, National
    Guard, and Public Health Service transfers for those who desire more
    stability in their home base but wish to continue military service and
    can meet deployment requirements.

                                    RESEARCH

        Air Force nurse researchers stay on the cutting-edge of advancing
    the science and practice of nursing. I am proud to say that twenty-one
    Air Force nurses are actively engaged in TriService Nursing Research
    Program (TSNRP) funded initiatives.
        Air Force researchers are leaders in the Department of Defense and
    the Nation in operational nursing research. In fiscal year 2003,
    nursing research at Wilford Hall Medical Center continued to focus on
    care of the war fighter in military unique and austere environments. A
    study on the thermal stresses onboard military aircraft led to
    evaluation of products designed to maintain body temperature in
    critically injured patients during aeromedical evacuation. This will
    identify devices that are effective in maintaining temperature control
    to improve support and survivability of casualties.
        The TSNRP-funded Air Force Combat Casualty Aeromedical Nursing
    research study describe the experiences of AE crewmembers in providing
    combat casualty care to gather information that can be used to improve
    AE nursing practice. The study also aims to pilot a research instrument
    to measure characteristics of casualties in different locations and the
    nursing care required. This study will influence AE combat casualty
    care and future training.
        Another study, ``Recruitment Decision Making for Military Nursing
    Careers'' is being conducted collaboratively by military nurse
    researchers at Keesler AFB and nursing researchers at the University of
    South Alabama. The goal of this study is to describe factors that
    influence nursing students in considering military nursing careers.
    This study will help identify the characteristics of individuals
    interested in military service and guide recruiting services in
    deploying recruiting initiatives.

                                   EDUCATION

        The Graduate School of Nursing at the Uniformed Services University
    has demonstrated tremendous flexibility and capability in meeting the
    needs of uniformed nurses. They began a clinical nurse specialist
    master's program at the request of the Federal Nursing Chiefs and also
    inaugurated a Ph.D. nursing program. The Perioperative Clinical Nurse
    Specialist program is the only one in the nation and includes special
    preparation for operating in a field environment so graduates are ready
    for deployment challenges. Three Air Force nurses are in the inaugural
    class.
        The Ph.D. program was established to meet the evolving need for
    nursing research relevant to federal health care and military
    operations. It affords federal nurses the opportunity to study in a
    unique environment and gain exceptional qualifications to lead in
    research, education, and clinical practice. Although the program is in
    its first year, the response has been overwhelming, and twelve nurses
    are enrolled either full or part time.

                           NURSING FORCE DEVELOPMENT

        Nursing has vigorously embraced the Force Development initiative
    launched last summer by Air Force Secretary James G. Roche and our
    Chief of Staff, General John P. Jumper. General Jumper describes the
    construct as making sure ``we place the right technical and leadership
    skills in the right places with the right people who are educated and
    trained for success''.
        Each officer career field has a dedicated Development Team (DT) to
    guide the assignments and educational opportunities for each officer.
    Our Nurse Corps DT has already played a substantial role in selecting
    chief nurses for our facilities, best assignments for our Colonels on
    the move and educational programs and candidates we will sponsor.
        We continue to work on opportunities to capitalize on the knowledge
    and experience of our enlisted force, and provide them more avenues to
    acquire advanced training and credentials. Eight medical technicians
    will graduate from the Army's Licensed Practical Nurse training course
    in April 2004 and we are looking at ways to increase LPN numbers. The
    Air Force Reserve is piloting an initiative to send new enlisted
    nursing personnel to a civilian LPN program. We have reviewed Navy
    enlisted baccalaureate scholarship programs and are reviewing similar
    opportunities for our enlisted personnel to earn a bachelor's degree
    and a commission in the Nurse Corps. This has great potential to reduce
    our recruiting deficit by ``growing our own'' nurse corps officers from
    our enlisted ranks.
        The global war on terrorism and a resource constrained environment
    has driven us to look even harder at efficiencies in nursing force
    utilization. Recent research has shown that a more educated nurse
    force, implementation of higher nurse-to-patient ratios, and better
    nursing work environments contribute to improved patient safety and
    lower patient morbidity and mortality. The Air Force Medical Service
    chartered Product Line Analysis and Transformation Teams to study
    civilian healthcare industry staffing models and best practice
    benchmarks. The new models they identified for nursing are being used
    to adjust staffing requirements.
        The Nurse Corps Top Down Grade Review mentioned in my testimony
    last year is progressing, and we have identified the need to rebalance
    Nurse Corps grade authorizations to better meet readiness and in-
    garrison healthcare requirements, and provide healthy career
    progression and promotion opportunities more in keeping with those of
    line officers and other medical service corps. Another aspect of our
    grade review was to determine the number of active duty nurses required
    for deployment and other military unique requirements. With this
    process, we have identified opportunities to civilianize many nurse
    positions. The methodology employed in the Nurse Corps study is being
    applied to all other career fields in the Air Force Medical Service to
    determine force structures and appropriate civilian/military mix.
        This has been an extraordinary year by all measures, and our Nurse
    Corps also reached two big milestones in our history. The nomination of
    Colonel Melissa Rank to Brigadier General marks the first selection of
    a nurse corps officer by an ``all corps'' promotion board. It is a
    testament not only to her outstanding performance but also reflects the
    magnitude of leadership and talent we have in our Air Force Nurse
    Corps. I was also promoted on the first of August to Major General,
    another Air Force first. It is a great honor and very humbling. I am
    grateful to have the opportunity to continue to serve. For the first
    time in history, we will have two active duty nurses concurrently
    serving the Air Force as general officers.
        Mister Chairman and distinguished members of the Committee, it has
    been a joy and great honor to lead the 19,000 men and women of our
    active, guard and reserve total Air Force Nursing team. Thank you for
    your tremendous advocacy and stalwart support to our great profession
    of nursing and for inviting me to share the accomplishments of Air
    Force Nursing once again.

        Senator Stevens. Thank you all very much.
        I am going to yield to the patron saint of military nurses,
    my co-chairman.
        Senator Inouye. I thank you very much.

                            RECRUITING AND RETENTION

        Nurses are all angels to me. They are very important.
        As all of you have indicated, our major concern is
    recruiting and retaining. I just want to make certain that
    these programs continue.
        For example, the Tri-Service nursing research program is
    not funded. I was told it is number nine on the USUHS priority
    list. Do you believe this committee should override that and
    fund it?
        General Brannon. Well, sir, if I may speak, I think the
    Tri-Service nursing research program initiatives have
    tremendous impact on the progress in military science for
    operationally nursing. I think it is a unique funding stream
    and allows us to do many great studies. I would hate to lose
    that avenue.
        Senator Inouye. If it is not funded, would it have any
    impact or implication on patient care?
        General Brannon. Yes, potentially. At aeromedical
    evacuation, we have a Tri-Service nursing research funded
    program that is looking at the environment of the various
    aircrafts and how we can mitigate some of the heat and cold
    concerns to provide a more stable transport environment for
    patients. That very clearly would adversely impact patients if
    we cannot complete that research. That is just one of many
    examples.
        Admiral Lescavage. Sir, I echo what General Brannon just
    said. I believe research is key to our future. As you queried
    the previous panel of our Surgeons General, you did also
    mention the subject of research. Research is quite competitive.
    There are never enough dollars for any type of research, as you
    well know.
        Should the funding go away, I see our nursing projects
    certainly as very important, but I know all of the good work,
    some 75 ongoing projects right now--some of them would not get
    the attention they need, and we would suffer from not being
    able to do it all. But I am certain we also would keep the
    highly relevant ones going, for instance, in the combat arena.
        We very much appreciate the funding that we get every year
    and frankly do not want to live without it.
        Senator Inouye. We have a graduate school of nursing,
    Colonel, and also a doctoral program. Should they be continued?
        Colonel Gustke. Yes, sir, most definitely. We have had the
    opportunity from the Army's perspective for the last 3 or 4
    years to use the Uniformed Services University (USU) program
    strictly for education of our family nurse practitioners, and
    without that program, we would not have the necessary funding
    to do that.
        Additionally, this past year we had our first inaugural
    year of the perioperative nursing program which, of course, is
    an extremely, go-to-war skill. This year we have educated four
    to six perioperative nurses from the Army and we will continue
    to do so every year. We have been extremely fortunate in
    educating additional certified registered nurse anesthetists
    (CRNAs), which again is another go-to-war mission that is
    important for us. Without this program, it would have a severe
    impact upon our ability to do so.
        Senator Inouye. Do these programs have any impact on
    recruiting and retention?
        Colonel Gustke. Well, sir, I would say the ability for our
    nurses to attend long-term health education is a very big
    retention carrot. Many of our nurses say that once they hit
    that 6th, 7th, 8th year--it is between the 4th and 6th years
    when we lose a number of our nurses. So we probably have our
    biggest retention problems, if we have any, at any particular
    given year. And many of our nurses say the ability to go back
    to graduate school and for the military to pay that bill for
    them to get their advanced education is extremely important to
    them. It is one of the reasons they come in. It certainly is
    not pay. It certainly is not incentive pay of any kind, but it
    is the ability to advance their education. I think to lose that
    capability would have a severe impact upon our retention.

                      LOAN REPAYMENT PROGRAMS AND BONUSES

        Senator Inouye. We have been impressed upon, that in about
    10 or 15 years, we will have a nursing shortage of about
    400,000 nurses in this country. Obviously, that will have an
    impact upon the military nurse corps. Do these loan repayment
    programs and bonuses make a difference?
        Colonel Gustke. Yes, sir. I will tell you from our
    perspective, this is our inaugural year in using the health
    loan repayment plan. We have got three programs in effect
    currently for recruitment. First, if individuals used health
    professions loan repayment program (HPLRP), they come in for 3
    years. Second tier, they can use HPLRP with an accession bonus
    of $5,000 and come in for 6 years, and the third tier is for
    them to just accept a $10,000 bonus and come in for 4 years.
    Under those plans, this past year we have seen anywhere from 12
    to 15 applicants come in the Army Nurse Corps each month. With
    these continued programs, we firmly believe that we will be
    able to meet our mission this year for the first time in 3
    years, our USAREC recruitment mission. So having spoken to the
    folks out in the field and the recruiters, they want to keep
    these initiatives going, and we would also certainly like to
    see an increase in our accession bonus as the years progress to
    see where we are competitively with the civilian market. But it
    has been extremely good to us this past year.
        Senator Inouye. I suppose you all agree.
        General Brannon. Yes. Of the almost 100 nurses that have
    been recruited so far this year, 60 percent have taken a loan
    repayment and 40 percent the increased accession bonus. I just
    came from a recruiting conference yesterday and they applauded
    the efforts, that they are making a tremendous difference
    because we are more competitive with the civilian facilities.
    So thank you.
        Admiral Lescavage. It is my belief nurses anywhere want
    three things: to be appreciated, which we do very well I
    believe in the military; to be compensated, our pay is very
    good; and to be educated. The pipeline programs I mentioned in
    my testimony, the ROTC programs, really help us out with
    bringing nurses into the Navy and then the issue is to retain
    them. We offer about 80 scholarships a year. As I visit our
    facilities, I always ask the question, who has been to duty
    under instruction. A fair amount of hands will go up. And who
    wants to duty under instruction, the scholarships we give while
    on active duty. Many, many hands go up. It is sort of a fever
    that has been created, and it is our best retention tool. I
    myself have had two scholarships from the Navy. It is highly
    valued.
        Senator Inouye. Well, I am certain I speak for the
    committee, and I speak for all of my colleagues in thanking all
    of you for your service to this Nation.
        On a personal note, I spent just about 20 months in
    military hospitals, and if it were not for nurses, I do not
    suppose I would be sitting here. So to you, thank you very
    much.
        Senator Stevens. Well, I did not spend that long, but I
    spent my time in military hospitals too. I think that the
    Senator is right. You have the calling of the angels.

                    SURGE CAPABILITY FROM GUARD AND RESERVE

        My only question would be, is there enough emphasis on a
    surge capability in time of war, as I have talked to my
    previous panel, for doctors and surgeons in particular? Do we
    have a surge capability from the Guard, Reserve? You mentioned
    total force. You mentioned it somewhat too, Colonel. But I
    don't want to be offensive, but I do not sense the commitment
    to the ongoing capability of former members of the service to
    have plans to bring them back in if needed. Can you comment? Do
    we have sufficient plans really to call up additional people
    from Guard and Reserve if they are needed?
        Colonel Gustke. Well, sir, I will tell you from the Army's
    perspective, we have three things in place currently. We have
    not skipped a beat in providing patient care to date, no matter
    what facility you will go to. We have the GWOT dollars to
    supplement with our contract civilian nurses, which has been
    very successful. We have integrated Reserve units as back-fills
    in our medical treatment facilities, both in CONUS and
    overseas, and then we have also used our 91 percent fill rate
    for our civilians which has been very successful, the direct
    hire authority.
        We also have had a number of military nurses call up and
    want to come back on active duty. So there is a program in
    place at our branch right now to look at that plan, should we
    ever need that to come to fruition. But for right now, sir, I
    think what we have in place is working very well, and should
    the need arise, we will look at that and get back in more
    detail on it, sir.
        Senator Stevens. Admiral.
        Admiral Lescavage. Sir, I feel fully confident that we are
    ready. During my tenure, what we have done, actually before we
    ever went into Iraq, was to look at our critical specialties,
    make sure not only do we have the numbers, but that we have
    provided the training that they need. And that is in areas of
    nurse anesthesia, operating room, emergency room, and critical
    care. What happened, once we did go into Iraq, I, as Colonel
    Gustke just described, received many calls from previous active
    duty to come back, our reservists. We are manned at 105
    percent. The key to the Reserves is to get more in the middle
    grades. We have many in the senior grades. So we are now
    tweaking that to try to recruit more middle grade officers into
    the Reserves. But, sir, I feel we are ready.
        Senator Stevens. General.
        General Brannon. Well, we are a total nursing team, and we
    have relied heavily on our Reserve and Guard brethren to
    support the nursing missions, particularly aeromedical
    evacuation. I will say some has been mobilization. Most of the
    positions are really being filled with willing volunteers at
    this point. So I remain always impressed and astonished at the
    commitment from our Reserves and our Guard.
        Senator Stevens. Thank you very much.
        My mind goes back to the time that I introduced an
    amendment to change the draft laws to draft women. It was
    defeated, as we expected, but we also then defeated the draft.
    We have relied on volunteer entrants to all of our services,
    and retention of some of those people who retire or leave
    before retirement for the purpose of surge capability in the
    cases of war and emergencies. So I think we sometimes forget
    the numbers that we were part of, 6 million and 7 million men.
    All-out war requires an enormous capability.
        I am not sure we have that capability today under the
    volunteer service, but I think we have to find some way, as I
    mentioned to the doctors, to try and see if we can provide the
    incentive for some people to be trained and just be literally
    reserved for crisis or all-out war, not for just the temporary
    surges in numbers. We are still in a fairly small war in
    comparison to the time when the two of us were in the service.
    God forbid we will ever have to do it. But I am not sure we
    have plans to do it. That is what bothers me. I would like to
    talk to you about it sometime in the future.

                         ADDITIONAL COMMITTEE QUESTIONS

        But meanwhile, I do appreciate what you have done, and I
    echo what my friend says about the admiration we have for all
    of the people that are in your service. They are not all women,
    as a matter of fact. You are all women, but I have met many
    male nurses in the service, and I commend them and we commend
    all of you. Thank you for your service.
        [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 B. Peake
                Questions Submitted by Senator Patrick J. Leahy

        Question. General Peake, I am pleased to hear of the progress that
    the Army is making in its efforts to develop modern alternatives to the
    deployable medical field systems, or ``DEPMEDs,'' that we've had in
    service for so many years. Is it true that the Army would like to begin
    fielding an alternative to DEPMEDs as early as calendar year 2005 once
    a final design is decided?
        Answer. The Army's Transformation Objective requires a Force that
    is strategically responsive and dominant at every point on the spectrum
    of operations. Heavy forces must be more strategically deployable and
    more agile with a smaller logistical footprint, and light forces must
    be lethal, survivable, and tactical.
        For more than 20 years the Department of Defense has employed
    Deployable Medical System (DEPMEDS) hospitals for any significant
    deployment of combat forces. Whether configured as the Navy's Fleet
    Hospital, the Air Force's Air Transportable Hospital, or the Army's
    Combat Support Hospital, each service uses essentially the same concept
    of moving special purpose medical shelters, both tents and ISO
    shelters, with a very low level of pre-integrated equipment, which
    required a significant number of transport containers. As a result of
    transformation throughout DOD, the need to rapidly deploy a range of
    scaleable, modular medical capabilities, which have the flexibility to
    be tailored and packaged to support a full range of combat operations,
    has become paramount. Accordingly, the concept for the Future Medical
    Shelter System (FMSS) shall respond to the joint requirements of the
    U.S. Army and the U.S. Navy.
        The FMSS shelter concept integrates the majority of medical
    supplies and equipment directly into the ISO containers thus
    eliminating separate packaging for these items and reducing the need
    for additional transport shelters and reducing weight and cube of the
    DEPMEDS hospital by approximately 30 percent. Consequently, the
    strategic deployability (air, ship, and truck transport volume)
    requirements are correspondingly reduced. Additional benefits of
    integration are enhanced tactical mobility as a result of the decreased
    time required to set up and prepare a DEPMEDS hospital for operation,
    conservation of the fighting strength by providing CONUS standards of
    medical care for soldiers deployed in world wide operations, and the
    ability to operate in all climates due to the environmentally
    controlled and chemical-biological overpressure protected environment.
    The fully modular system with integrated plug-and-play capability will
    have the required flexibility to be tailored and packaged to support
    the full range of combat operations.
        The Army is currently managing three separate Congressionally
    funded FMSS initiatives, Oak Ridge National Laboratories (ORNL), Mobile
    Medical International Corporation (MMIC), and EADS-Dornier. Each is
    developing a design for an Operating Room ISO container. ORNL and MMIC
    will deliver prototypes to the Army in May 2004 and July 2004
    respectively. EADS-Dornier is funded to provide engineering drawings of
    the OR ISO by December 2004.
        The FMSS program is in the Concept & Technical Development/Systems
    Development & Demonstration phases of development. Much work remains to
    ensure that these units are suitable for military use. It is unlikely
    that this could be accomplished by 2005 due to the fact that there is
    no funding available for further development or testing. There was no
    fiscal year 2004 Congressional Appropriation for the FMSS and the Army
    has no funding to support development or procurement of these
    initiatives, however, it is desired to begin replacing our aging
    DEPMEDs containers with these new enhanced capabilities as soon as
    possible. With your assistance and additional RDT&E funds, we should be
    able to achieve a procurement decision by the end of fiscal year 2006.
    As a reminder, the original DEPMEDs procurement was funded through
    direct Congressional Appropriation. Due to the projected cost of
    replacing DEPMEDS and current DOD funding priorities, this approach is
    the most likely scenario for a successful procurement of a DEPMEDs
    replacement.
        Question. General Peake, in that the hard-shell mobile hospital
    alternatives you are developing deploy very quickly and feature
    nuclear-biological-chemical protective capability, do you see these
    units having a possible role in disaster or terrorist incident response
    either at overseas U.S. bases or in this country?
        Answer. I believe the hard-shell mobile hospital alternative you
    refer to is the Chemical Biological Protective Shelter (CBPS). The CBPS
    is not exactly a mobile hospital alternative, however, it provides a
    highly mobile, self-contained, contamination free, environmentally
    controlled medical treatment area for forward deployed medical
    treatment units. (Battalion Aid Stations, Division & Corps Med
    Companies and Forward Surgical Teams). The CBPSs are complexed to
    provide these capabilities.
        The CBPS is a 300 square foot, air beam, soft wall shelter rolled
    up and transported on the rear of a Highly Mobile Multipurpose Wheeled
    Vehicle with Light weight Multipurpose Shelter and a trailer mounted
    Tactical Quiet Generator. The system can process 10 Litter/ambulatory
    patients per hour. It is Type Classified Standard with full materiel
    release and is currently in procurement through the Joint NBC Defense
    Program.
        The CBPS could have a role in disaster or terrorist incident
    response as it provides a contamination free environmentally controlled
    environment for treatment and surgery. Its capacity, however, is
    limited.
        Question. Do you and Dr. Winkenwerder anticipate use of this type
    of mobile diagnosis/treatment center in medical diplomacy missions
    where the Pentagon is trying to win the ``hearts and minds'' of
    ambivalent local populations in places like the Philippines, Middle
    East, and the Western Horn of Africa?
        Answer. The Chemical Biological Protective Shelter (CBPS) provides
    a contamination free environmentally controlled environment for the
    provision of sick call, advanced trauma life support and surgery on the
    contaminated battlefield. The CBPS currently is in the initial stages
    of procurement and is in short supply.
        I believe the CBPS can provide a small mobile medical treatment
    facility (clinic like capability) for diagnosis/treatment in medical
    diplomacy missions. This use must be coordinated between the Department
    of Defense and Department of State.
                                     ______

                Questions Submitted by Senator Richard J. Durbin

                               BLOOD SUBSTITUTES

        Question. I have heard of advances the Army and the Navy are making
    in developing blood substitutes for treating combat wounded. I know the
    Army has successfully completed Phases I and II with Northfield
    Laboratories in Illinois and are working with the FDA for approval, as
    well as the lab, to complete Phase III which would provide for clinical
    trials. I believe it is critical that we continue to support these
    efforts as they have significant battlefield applications, as well as
    first responders in a natural disaster or terrorist attack.
        Would you explain what these blood substitutes are, and why they
    are important to the future of combat casualty care and your assessment
    of their prospects for success for all services?
        Answer.

    What are blood substitutes
        The most common approach that has been taken to develop blood
    substitutes is to harvest hemoglobin, the natural molecule that carries
    oxygen to vital tissues, from either human or bovine (cattle) sources.
    The hemoglobin is then subjected to proprietary processes to remove
    unwanted materials and to remove or inactivate potential infectious
    agents. Other proprietary processes are used to build the individual
    hemoglobin molecules into chains of hemoglobin. This process is
    believed to reduce or eliminate toxic effects caused by individual
    molecules of hemoglobin. Once processing is completed the hemoglobin is
    ready for use as a means to provide oxygen-carrying capability to
    subjects who have lost significant amounts of blood. These preparations
    are referred to as hemoglobin-based oxygen carriers (HBOC). Other
    approaches are being pursued but they are much earlier in their
    development and will not be ready, if ever, for many years.
    Potential utility for the military services
        Combat injury on the battlefield typically occurs in the absence of
    ready availability of packed red blood cells (PRBC), the derivative of
    whole blood that is normally required to manage patients who have
    severe bleeding. Most deaths that result from severe bleeding on the
    battlefield occur within the first hour of injury. It has been
    difficult to solve this problem because medics on the battlefield
    cannot carry PRBC. PRBC must essentially remain refrigerated until
    used. HBOC have the advantage that they are much more stable when
    removed from refrigeration and can therefore be carried on the
    battlefield for at least limited periods (days to weeks) and remain
    safe for human use. Thus, more ready availability of HBOC on the
    battlefield may provide a bridge for the casualty with life-threatening
    hemorrhage that will permit survival until evacuation from the
    battlefield can be accomplished.

    Prospects for success of HBOC
        An early HBOC developed by the Baxter Corporation was developed and
    tested in the 90's and subsequently abandoned during advanced clinical
    testing when an excessive (unexpected) number of deaths occurred among
    patients treated with the product in their Phase 3 study.
        Currently, two smaller companies, Northfield Laboratories, Inc.,
    Evanston, IL and Biopure Corporation, Cambridge, MA have developed new
    products incorporating new processes that it is hoped will mitigate the
    toxicity problems seen with the Baxter product. Both Northfield and
    Biopure have conducted animal and human studies of their products that
    have both so far shown promise. However, large, phase 3 clinical
    studies that demonstrate both safety and effectiveness remain to be
    completed. Northfield Laboratories began a Phase 3 study in trauma
    patients outside of the hospital in December 2003 and plans to complete
    this study in 2005. If this study is successful (shows both safety and
    effectiveness), the company anticipates licensure sometime in 2006.
    Biopure Corporation, in collaboration with the Naval Medical Research
    Center, plans to begin a Phase 3 study of their HBOC in trauma patients
    outside the hospital later in 2004. If successful, licensure might be
    anticipated in 2006 or 2007.
        The Army and the Navy have continued to collaborate and remain
    connected with both companies to help shape and ensure that their
    products will have maximal relevance for military as well as civilian
    application. In that regard, the Navy has recently assumed sponsorship
    of the Phase 3 study that will be conducted with the Biopure
    Corporation HBOC. The Army is collaborating with Northfield
    Laboratories to make their HBOC available to Special Operations Forces
    casualties on the battlefield in a controlled, pre-licensure treatment
    protocol.

                                DENTAL RESEARCH

        Question. As I am sure you are all aware, a DOD review panel in
    2000 confirmed the need for the military dental research but found that
    it is hampered by discontinuous funding streams. Last year, the
    Committee included language in its report that ``directed'' the
    Department to sufficiently fund the military dental research program at
    the Great Lakes naval base. Last year Congress added $2 million for
    dental research, which was actually only about half of what was
    requested.
        Could you tell this Committee how much the Army and Navy are each
    putting into this program for fiscal year 2005?
        Answer. The U.S. Army, through U.S. Army Medical Research and
    Materiel Command, Combat Casualty Care and Walter Reed Army Institute
    of Research fund the U.S. Army Dental and Trauma Research Detachment at
    $1.687 million of which some support is provided for infrastructure and
    $1.08 million is available for U.S. Army Dental Research.
        Question. It is my understanding that one of the biggest problems
    for deployed Soldiers is avoiding gum disease--like trench mouth. What
    are the Army dental researchers at Great Lakes doing to address this
    problem to prevent dental emergencies for deployed Soldiers?
        Answer. The U.S. Army Dental Trauma and Research Detachment
    (USADTRD) is approaching reduction of the historically constant 15.6
    percent emergency rate in deployed Soldiers from several different
    avenues. Firstly, (USADTRD) is developing a rapid PCR that will, if
    successful, identify those Soldiers who are most susceptible to
    accelerated deterioration of oral health during deployments. Once
    identified, special measures, including diet and special oral hygiene
    aides, can be prescribed specifically for that Soldier to prevent
    becoming an emergency/evacuation. The single largest focus of USADTRD's
    science program is the development of a safe, efficacious anti-
    microbial peptide that can be added to military rations and control
    dental plaque caused disease. It is anticipated this peptide will be
    delivered via chewing gum, and will be effective in reducing/preventing
    oral diseases even in the face of heightened stress levels and
    decreased oral hygiene due to the optempo experienced during
    deployments. Currently of the 15.6 percent emergency rate, 75 percent
    of those emergencies are related to dental plaque. USADTRD is
    projecting at least a 50 percent decrease in plaque related
    emergencies. This will be a significant force multiplier for the
    warfighter.
        Question. The Navy dental researchers at Great Lakes have developed
    several new products and pieces of equipment that allow corpsmen to
    treat warfighters in the field saving time and money. Can you tell us
    about some of that equipment?
        Answer. In keeping in line with current U.S. Army doctrine, the
    U.S. Army Dental and Trauma Research Detachment (USADTRD) has developed
    and fielded a miniaturized dental field unit and operating system
    (DeFTOS). This dental field unit significantly reduces the weight and
    cube of dental equipment used in deployed environments. This reduction
    allows dental equipment to be closer to the warfighter, permitting much
    more rapid return to duty following evacuation for dental emergencies
    as well as saving very valuable transportation assets for other
    requirements. Currently USADTRD is also working to greatly reduce the
    weight, size and electrical requirements for field sterilizers. By
    accomplishing this, the U.S. Army will not only benefit with a smaller,
    lighter sterilizer, but due to a lessened electrical requirement, a
    great deal more weight and cubes will be saved by a far smaller
    electric generator.
                                     ______

                Questions Submitted by Senator Dianne Feinstein

        Question. The antimalarial drug mefloquine has been identified as
    causing severe side effects such as psychosis, aggression, paranoia,
    depression and thoughts of suicide, even after use of the drug has
    stopped. Could you please tell me why another quinolone, ciprofloxacin,
    is being given to soldiers to self administer when consuming suspicious
    foods in Iraq when the side effects from one quinolone have the
    potential to be compounded by the second?
        Answer. Mefloquine is a 4-quinolinemethanol derivative.
    Ciprofloxacin is a fluoroquinolone that is an antimicrobial agent, used
    to kill bacteria. The two drugs are not related. There are no known
    drug interactions between mefloquine and ciprofloxacin. Furthermore, it
    is not Army policy to give ciprofloxacin for self-administration when
    consuming suspicious foods. In fact, Soldiers are cautioned against
    consuming foods on the local economy. Soldiers have a variety of foods
    provided for them, including Meals-Ready-To-Eat, T-rations, which
    consist of containers of pre-packaged foods and fresh rations, which
    are thoroughly inspected for quality.
        Question. DOD has begun an investigation into psychiatric adverse
    events in soldiers and plans a study of mefloquine. DOD has stated that
    it has not included in its assessments several incidents in soldiers
    who have taken mefloquine or soldiers who do not demonstrate blood
    levels of the drug. FDA's News Release of July 9, 2003 states that
    ``Sometimes these psychiatric adverse events may persist even after
    stopping the medication.'' What is being done by DOD to investigate the
    incidents of suicides in soldiers while on or returning from
    deployment? Any investigations should include soldiers who consumed
    mefloquine and committed suicide or committed other acts of violence
    whether there were residues identified in their blood or not. What is
    DOD's timeframe for conducting a review of these cases and conducting
    other studies of the effects of mefloquine?
        Answer. The DOD uses all of the currently recommended antimalarial
    medications, basing their choice on medical and operational
    considerations for each mission. All of these medications have
    potential side effects, and, the risks and benefits of each are
    considered by our operational surgeons, when recommending a medication
    for malaria prophylaxis. Recently, the antimalarial drug mefloquine has
    been highlighted in news reports, alleging severe adverse side effects
    potentially related to this medication. DOD is committed to finding
    answers to the questions raised by these reports.
        Dr. Winkenwerder, Assistant Secretary of Defense for Health
    Affairs, has asked an expert panel of independent physicians,
    scientists, epidemiologists, and ethicists from highly respected
    civilian institutions and academia to recommend study designs that are
    best suited to answering questions surrounding antimalarial
    medications. Based on these recommendations, Health Affairs has
    commissioned two studies. The first, to be led by the Deployment Health
    Research Center at the Naval Health Research Center (NHRC) in San
    Diego, will look at the (comparative rates of adverse events (including
    neuropsychiatric)) associated with antimalarial use. A preliminary
    descriptive study is underway and preliminary results should be
    completed within one to two months. Based on the recommendations of the
    expert panel, the NHRC will then partner with a civilian academic
    institution to perform a retrospective cohort analysis of the data to
    determine the comparative rates of adverse outcomes associated with
    each of the antimalarial medicines. The details of this thorough
    analysis are being developed now. We anticipate that this study will
    take 12-18 months to complete.
        A second study will address the questions raised about suicides in
    our deployed and recently deployed service members. The Armed Forces
    Institute of Pathology is leading this study. The first step will be a
    comprehensive review to characterize all suicides in DOD. They will
    then partner with a civilian academic institution to perform a case
    control analysis in order to better understand the myriad of potential
    attributable risk factors with these deaths. Use of the antimalarial
    medication mefloquine will be one factor assessed in this study.
    Planning for this study is underway, and we anticipate this extremely
    thorough analysis to take 18 to 24 months to complete.
        The creditability of this work will hinge on the fact that it will
    be comprehensive and validated by the medical community. A non-federal
    oversight board will oversee both of these study efforts--DOD will be
    working with the American Institute of biological Sciences.
        Question. What are you doing to specifically recognize and report
    adverse events that are potentially associated with mefloquine
    consumption in deployment situations? What kind of reporting systems
    are available to deployed physicians, medics and or soldiers for
    reporting adverse events?
        Answer. Once a health care provider has determined that an adverse
    event is likely due to mefloquine or any drug, they first document it
    in the patient's health record. Then, they would ensure that the
    information is reported. If they were in a deployed medical treatment
    facility that has Internet connectivity, they would access the web site
    for the Joint Medical Workstation (JMeWS) system, and code the patient
    encounter as an adverse drug event. In more remote combat areas, mobile
    Army medical personnel use laptops to input patient encounter
    information through Composite Health Care System II--Theater (CHCS-II-
    T).
        Question. What support is provided for soldiers reporting adverse
    events who are taking mefloquine? What is the Standard Operating
    Procedure for a managing a soldier with side effects from mefloquine
    consumption, knowing that stopping the drug is insufficient as the
    effects can persist after stopping the product, while on deployment or
    here is the United States?
        Answer. If a Soldier experiences severe side effects with
    mefloquine, then the medication will be stopped and the medical needs
    of the Soldier will be taken care of. It is important to understand
    that treatment is individualized according to the type of reaction and
    what treatment is indicated for that particular adverse event. When
    Soldiers have any health concerns that may be related to deployment, no
    matter which deployment nor how long ago the deployment occurred, we
    use an evidenced-based clinical practice guideline called the post-
    deployment evaluation and management guideline. Service subject matter
    experts from the Department of Defense and Veterans Health Affairs
    developed this guideline. It is used in the primary care setting in
    screening, evaluating and managing the post-deployment health concerns
    of service members. It provides an algorithm to systematically and
    comprehensively address health concerns by reinforcing a partnership
    with the Soldier patient. A detailed medical history is taken; followed
    by a medical exam, appropriate laboratory tests and consultative
    services, if indicated. It also serves to enhance the continuity of
    care and foster the establishment of therapeutic relationships.
                                     ______

              Questions Submitted to Vice Admiral Michael L. Cowan
                Questions Submitted by Senator Richard J. Durbin

                                DENTAL RESEARCH

        Question. As I am sure you are all aware, a DOD review panel in
    2000 confirmed the need for the military dental research but found that
    it is hampered by discontinuous funding streams. Last year, the
    Committee included language in its report that ``directed'' the
    Department to sufficiently fund the military dental research program at
    the Great Lakes naval base. Last year Congress added $2 million for
    dental research, which was actually only about half of what was
    requested. Could you tell this Committee how much the Army and Navy are
    each putting into this program for fiscal year 2005?
        Answer. The Navy's Military Dental Research Program is primarily
    conducted by the Naval Institute for Dental and Biomedical Research
    (NIDBR) located at the Great Lakes Naval Station. NIDBR's total funding
    for fiscal year 2004 and the requested budget for fiscal year 2005 is
    summarized in the following table.

                                                          NIDBR
                                                 [Dollars in thousands]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                        Fiscal Year
                    Funding Source                                   Research Area                         2004
    ----------------------------------------------------------------------------------------------------------------
    DHP, Navy....................................  Mercury Abatement................................            $910
    RDT&E, Navy..................................  Science and Technology Projects..................          $1,130
    RDT&E, Navy..................................  Transition/Advanced Development..................            $761
    RDT&E, Navy..................................  Congressional Add................................          $1,154
    RDT&E, Navy..................................  General Purpose Test Equipment and Maintenance...            $236
    DHP, Navy....................................  Longitudinal Risk Assessment.....................            $162
    US-EPA.......................................  Mercury Hygiene Training.........................             $30
    Commercial Research and Development Agreement  Creighton University.............................             $85
                                                                                                     ---------------
          Total Program..........................  .................................................          $4,468
                                                                                                     ===============
    Various......................................  NIDBRI Fiscal Year 2005 Request..................          $4,863
    ----------------------------------------------------------------------------------------------------------------

        The NIDBR request in fiscal year 2005 assumes that research funding
    is available in fiscal year 2005 in the same amounts as in fiscal year
    2004. In fiscal year 2005 NIDBR has additional requirements for
    supplies and equipment and maintenance. Science and Technology projects
    have not been awarded for fiscal year 2005.
        Question. It is my understanding that one of the biggest problems
    for deployed Soldiers is avoiding gum disease--like trench mouth. What
    are the Army dental researchers at Great Lakes doing to address this
    problem to prevent dental emergencies for deployed Soldiers?
        Answer. We would respectfully defer comment on Army dental research
    to the Army Surgeon General.
        Question. The Navy dental researchers at Great Lakes have developed
    several new products and pieces of equipment that allow corpsmen to
    treat warfighters in the field saving time and money. Can you tell us
    about some of that equipment?
        Answer. Recent achievements/products/equipment developed by the
    Naval Institute for Dental and Biomedical Research (NIDBR) in support
    of the Warfighter in all deployed venues include:
        Treatment of Dental Emergencies CD-ROM.--NIDBR has developed and
    deployed a dental treatment CD-ROM that aids Independent Duty Corpsmen
    in the diagnosis and treatment of common dental emergencies. This tool
    assists corpsmen in providing necessary emergency treatment to deployed
    personnel in venues where there is no immediate access to dental
    officer.
        Rapid Salivary Diagnostics.--NIDBR continues the development of
    rapid, simple, non-invasive salivary diagnostic tests to assess
    militarily relevant diseases such as tuberculosis and Dengue Fever, and
    anthrax immunization status of military personnel at risk or preparing
    for deployment. Currently, assays for clinic and battlefield-use using
    two methods: lateral flow and fluorescence polarization are being
    developed to provide corpsman and non-medical personnel a means for
    early diagnosis of personnel in the field who have contracted these
    diseases. This rapid diagnostic capability will allow for appropriate
    treatment and quicker return to duty or necessary evacuation to a
    higher echelon of medical care.
        Far-forward Interim Dental Restorative Material/Dressing.--NIDBR
    continues to develop and test a new novel dental material and delivery
    system that can be used to treat dental emergencies in the deployed
    environment, thereby reducing MEDEVACs and keeping Warfighters on
    station. The far-forward dental dressing has been designed for use by
    first responders as a method to treat a wide variety of urgent dental
    problems encountered by the deployed Warfighter.
        Authorized Dental Allowance List (ADAL) Field Dental Operatory Test
    and Evaluation.--NIDBR continues to test, evaluate, and validate new
    and existing components of the Marine Corps ADAL to ensure the deployed
    dental delivery systems will withstand the rigors of field use during
    an operational deployment.
                                     ______

                Questions Submitted by Senator Dianne Feinstein

        Question. The antimalarial drug mefloquine has been identified as
    causing severe side effects such as psychosis, aggression, paranoia,
    depression and thoughts of suicide, even after use of the drug has
    stopped. Could you please tell me why another quinolone, ciprofloxacin,
    is being given to soldiers to self administer when consuming suspicious
    foods in Iraq when the side effects from one quinolone have the
    potential to be compounded by the second?
        Answer. A three-day supply of ciprofloxacin is commonly supplied to
    travelers (both civilian and military) for the emergency treatment of
    diarrhea, in the event that they are incapacitated and not able to
    receive immediate medical attention. Ciprofloxacin is usually
    prescribed for this type of treatment because it should either
    significantly improve or cure about 70 percent of bacterial
    gastroenteritis episodes. While it is theoretically possible for one
    quinolone to potentiate the side effects of another, this has not been
    shown to be a problem with mefloquine and ciprofloxacin. The possible
    association between mefloquine and ciprofloxacin with adverse events
    has been speculated upon, however, there have been no well-documented
    cases of problems due to this drug combination. Whenever mefloquine and
    ciprofloxacin are prescribed together, the theoretical risk of
    interaction must be weighed against their proven life saving benefits.
        Question. DOD has begun an investigation into psychiatric adverse
    events in soldiers and plans a study of mefloquine. DOD has stated that
    it has not included in its assessments several incidents in soldiers
    who have taken mefloquine or soldiers who do not demonstrate blood
    levels of the drug. FDA's News Release of July 9, 2003 states that
    ``Sometimes these psychiatric adverse events may persist even after
    stopping the medication.'' What is being done by DOD to investigate the
    incidents of suicides in soldiers while on or returning from
    deployment? Any investigations should include soldiers who consumed
    mefloquine and committed suicide or committed other acts of violence
    whether there were residues identified in their blood or not. What is
    DOD's timeframe for conducting a review of these cases and conducting
    other studies of the effects of mefloquine?
        Answer. The Office of the Assistant Secretary of Defense for Health
    Affairs (ASD (HA)) is coordinating a DOD study of adverse events
    associated with mefloquine, including any possible connection with
    suicide. Recommendations for the proposed study have been developed by
    a select sub-committee of the Armed Forces Epidemiological Board (AFEB)
    and will be presented to ASD (HA) and the AFEB. Questions regarding
    whether the anticipated study will include soldiers involved in
    specific incidents or how blood levels of mefloquine will be approached
    should be referred to ASD (HA).
        Question. What are you doing to specifically recognize and report
    adverse events that are potentially associated with mefloquine
    consumption in deployment situations? What kind of reporting systems
    are available to deployed physicians, medics and/or soldiers for
    reporting adverse events?
        Answer. Reporting of adverse events associated with mefloquine, or
    any other medication, is addressed by Naval Medicine's Risk Management,
    Patient Safety and Operational Health Care Quality Assurance programs.
    Operational units are required by the Chief of Naval Operations to
    track adverse drug reactions as a part of the Operational Health Care
    Quality Assurance program. These units use U.S. Food and Drug
    Administration guidelines for the reporting of adverse drug reactions.
        Any provider, civilian or military, may submit adverse drug
    reactions to the U.S. Food and Drug Administration (FDA). The FDA
    accepts adverse drug reaction reports via website, telephone or mail.
    In addition, these drug reactions must be monitored at the local level
    through the Operational Health Care Quality Assurance Program.
        Question. What support is provided for soldiers reporting adverse
    events who are taking mefloquine? What is the Standard Operating
    Procedure for a managing a soldier with side effects from mefloquine
    consumption, knowing that stopping the drug is insufficient as the
    effects can persist after stopping the product, while on deployment or
    here is the United States?
        Answer. Individuals experiencing possible side effects from
    mefloquine are provided support through their local primary care
    provider. Management of adverse side effects from medication involves
    prevention through proper screening, choice of medication, appropriate
    monitoring, and above all, stopping the suspected medication. U.S. Food
    and Drug Administration guidelines advise discontinuing mefloquine if
    side effects occur. Due to the long half-life of mefloquine, adverse
    reactions to mefloquine may occur or persist up to several weeks after
    the last dose.
        Standard of care for managing a patient with an adverse reaction to
    Mefloquine is to change the patient's medication, monitor the patient
    for resolution of side effects and refer the patient to appropriate
    clinical specialists for persistence of any psychiatric or neurological
    side effects.
                                     ______

       Questions Submitted to Lieutenant General George Peach Taylor, Jr.
                Questions Submitted by Senator Dianne Feinstein

                                   MEFLOQUINE

        Question. The antimalarial drug mefloquine has been identified as
    causing severe side effects such as psychosis, aggression, paranoia,
    depression and thoughts of suicide, even after use of the drug has
    stopped. Could you please tell me why another quinolone, ciprofloxacin,
    is being given to soldiers to self administer when consuming suspicious
    foods in Iraq when the side effects from one quinolone have the
    potential to be compounded by the second?
        Answer. Ciprofloxacin (an antibiotic) is used for the prevention or
    treatment of certain type of traveler's diarrhea, often caused by
    consuming poorly prepared or inappropriately stored food. During
    deployments, our public health officials work very hard to ensure that
    the food that our airmen consume is safe.
        Our healthcare providers prescribe prophylactic medications in
    accordance with the Centers for Disease Control and Prevention (CDC)
    recommendations, Food and Drug Administration license, and the
    manufacturers' prescribing information. While the concomitant
    administration of mefloquine and quinine or chloroquine (another
    antimalarial) may produce electrocardiographic (heart conduction)
    abnormalities, there is no scientific evidence to suggest that the use
    of ciprofloxacin would compound the adverse reactions that may be
    associated with mefloquine use. It is within the standard of care to
    prescribe both mefloquine and ciprofloxacin. Both are excellent
    pharmaceutical agents for force health protection.
        Question. DOD has begun an investigation into psychiatric adverse
    events in soldiers and plans a study of mefloquine. DOD has stated that
    it has not included in its assessments several incidents in soldiers
    who have taken mefloquine or soldiers who do not demonstrate blood
    levels of the drug. FDA's News Release of July 9, 2003 states that
    ``Sometimes these psychiatric adverse events may persist even after
    stopping the medication.'' What is being done by DOD to investigate the
    incidents of suicides in soldiers while on or returning from
    deployment? Any investigations should include soldiers who consumed
    mefloquine and committed suicide or committed other acts of violence
    whether there were residues identified in their blood or not. What is
    DOD's timeframe for conducting a review of these cases and conducting
    other studies of the effects of mefloquine?
        Answer. A loss of any airmen to suicide is tragic. For many years,
    Air Force leaders have been very committed to preventing suicides. Our
    nationally recognized suicide prevention program educates leaders as
    well as individual airmen on how to identify at-risk individuals and
    intervene when necessary to prevent suicides. Since the program's
    inception, our suicide rates have continued to decline.
        We, along with our Sister Services and the Assistant Secretary of
    Defense for Health Affairs, are very concerned about the number of
    suicides among deployed troops and potential adverse outcomes of
    mefloquine. At the May 12, 2004 meeting of the Armed Forces
    Epidemiological Board (AFEB), the ASD/HA accepted the Board's
    recommendations to formally study the factors associated with suicide
    and to study outcomes potentially related to mefloquine. His staff is
    currently determining the exact details, such as time frame.
        Question. What are you doing to specifically recognize and report
    adverse events that are potentially associated with mefloquine
    consumption in deployment situations? What kind of reporting systems
    are available to deployed physicians, medics and/or soldiers for
    reporting adverse events?
        Answer. All our deployed military treatment facilities have
    capabilities to report reportable medical events. Reportable medical
    events include adverse events associated with vaccinations and certain
    medical conditions. If an airman sees a healthcare provider for an
    adverse event associated with medication use, it is documented in the
    airman's medical record and the DD Form 2766 (Adult Prevention and
    Chronic Care Flowsheet). The DD Form 2766 accompanies deployed
    personnel to the field and is returned to the individual's medical
    record upon re-deployment. While providers are not required to report
    adverse events that are not out of the ordinary (i.e., adverse events
    that have been reported in the package inserts for the individual
    pharmaceutical agent), they are required to report unusual adverse
    events associated with a medication directly to the Food and Drug
    Administration. In the 10 years that the Air Force has used mefloquine,
    it has not had a significant reportable event associated with
    mefloquine administration.
        Question. What support is provided for soldiers reporting adverse
    events who are taking mefloquine? What is the Standard Operating
    Procedure for a managing a soldier with side effects from mefloquine
    consumption, knowing that stopping the drug is insufficient as the
    effects can persist after stopping the product, while on deployment or
    here is the United States?
        Answer. If an Airman experiences symptoms while on mefloquine, a
    healthcare provider evaluates him or her. If necessary, the medication
    is discontinued and an alternative medication is substituted. Airmen
    are instructed to seek care for any medical concerns, including those
    associated with any medication use. All Airmen receive a post-
    deployment briefing and a face-to-face medical visit with a healthcare
    provider prior to returning home. Airmen are also provided with
    information on how to seek medical care, either through our medical
    treatment facilities or the VA system.

                              SUBCOMMITTEE RECESS

        Senator Stevens. We are going to conclude the testimony
    here today. We will reconvene on May 5 at 9:30 a.m., when we
    hear from nondepartmental witnesses on the total budget for
    defense. Thank you very much.
        [Whereupon, at 11:50 a.m., Wednesday, April 28, the
    subcommittee was recessed, to reconvene at 9:30 a.m.,
    Wednesday, May 5.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                             WEDNESDAY, MAY 5, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:30 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens and Inouye.

                           NONDEPARTMENTAL WITNESSES

    STATEMENT OF SUE SCHWARTZ, R.N., CHAIRPERSON, HEALTH
                CARE COMMITTEE, THE MILITARY COALITION

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning. We do welcome all of you to
    our public witness hearing. There are 24 witnesses today who
    have indicated each of them wishes to testify or submit a
    statement for the record. To keep us on schedule,
    unfortunately, I must ask that you limit your testimony to not
    more than 4 minutes. We are in session. We are going into
    session now, and we will have votes today.
        We appreciate your interest and want you to know that we do
    carefully review each item that you do present to us. Your
    prepared statements are included in the record already. We ask
    that you summarize those statements.
        As soon as my good friend, Senator Inouye, arrives, we will
    see if he has an opening statement. I do not think he does. But
    why do we not proceed with our first witness and allow my
    friend to make such statements he wants to make.
        The first witness is Sue Schwartz, a registered nurse, and
    Chairperson of the Coalition's Health Care Committee of the
    Military Coalition. Welcome, Ms. Schwartz.
        Ms. Schwartz. Good morning, Mr. Chairman.
        Mr. Chairman and distinguished members of the subcommittee,
    thank you for the opportunity to address you today concerning
    the Military Coalition's views on funding for the defense
    personnel programs. I want to reiterate our deep appreciation
    to the entire subcommittee for the role you played in the
    development of a wide range of landmark health care initiatives
    over the past few years, particularly for Medicare eligibles
    and active duty families. On behalf of our grateful members, we
    say thank you for the leadership your subcommittee gave last
    year directing the Department of Defense (DOD) to take specific
    action to address chronic access problems for TRICARE Standard
    and to begin to address health care needs for the selected
    Reserve.
        We ask the subcommittee's continued emphasis to ensure that
    these enhancements are not only successfully implemented, but
    adequately funded as well.
        DOD officials speak of funding shortfalls in the out-years,
    but there are current problems as well. Bases are turning
    retirees away from their pharmacies, saying this is due to
    budget cuts. In many instances, a retiree or any beneficiary
    may only get a 30-day supply of medication from the military
    pharmacy instead of the usual 90-day supply.
        To control costs, some military pharmacies cut back on
    expensive drugs not on the basic core formulary. Beneficiaries
    then turn to the retail pharmacy to get those medications where
    funds come out of a different pot of money. When funds get
    tighter, it becomes harder to get an appointment. Pharmacy and
    clinic hours get cut. Prime access standards are not met.
    Sometimes beneficiaries are told the schedule is not ready,
    call back in a week, and the queue starts to build.
        Last year the Office of Management and Budget (OMB)
    considered increasing retiree pharmacy cost share
    significantly, even going so far as to propose charging
    retirees for medications obtained in military pharmacies. In a
    memo dated March 26, the United States (U.S.) Army Command
    states there is a significant funding shortfall in their annual
    funding of $250 million to support the war. Many command
    activities have budget execution rates that cannot be sustained
    within current funded levels.
        We ask the subcommittee's continued support in
    appropriating sufficient amounts for the direct and purchased
    care systems so that the defense health program (DHP) budget
    does not have to be balanced on the back of beneficiaries.
        In the last session of Congress, you took the first steps
    to extend to the Guard and Reserve additional TRICARE coverage
    before and after mobilization and to provide TRICARE on a cost-
    share basis for members without access to employer-sponsored
    health care.
        Mr. Chairman, some disturbing news is 6 months have passed
    and DOD has not implemented all these provisions. The Defense
    Department cannot tell us if or when it will be able to
    implement access to TRICARE on a cost-share basis for those
    reservists without health insurance. These programs are
    temporary and the clock is ticking. The authority and funding
    for this legislation expires at the end of the year, but the
    call-ups will not. How can we expect to have a valid test when
    time is running out?
        The coalition urges you to send a strong message that
    health care for the Guard and Reserve and their family members
    is a priority. We ask you to take steps to fully fund the
    permanent expansion of these TRICARE benefits for the Guard and
    Reserve components pre-and post-mobilization. The coalition
    believes we need to enhance health care for the Guard and
    Reserve families because it is a readiness issue. It is a
    quality of life issue to provide affordable health care to
    Reserve families. It will stimulate recruiting and retention
    efforts, and it gives employers of mobilized members financial
    incentives. Dependence on Guard and Reserve personnel will not
    decrease and most likely will grow. Making these health care
    enhancements permanent and fully funded demonstrates that we
    appreciate the service and sacrifice of our citizen soldiers
    and their families.
        We deeply appreciate the subcommittee's ongoing leadership
    and commitment to those who are in uniform today and those who
    have served our Nation in the past.
        I look forward to answering your questions. Thank you.
    Senator Stevens: Is it your position they have not yet covered
    those who have actually been mobilized or those who are being
    demobilized?
        Ms. Schwartz. Sir, the section 702, 703, and 704 of last
    year's National Defense Authorization Act--only section 704 has
    been fully implemented which is the extension of the
    transitional assistance medical program (TAMP), which is the
    temporary extension of benefits post-mobilization. The other
    two sections have not been implemented.
        Senator Stevens. As I understand, it is a very difficult
    thing to do. We will look into it, though, but I did look into
    it a little bit, and it is extremely difficult to do without
    providing a disincentive to employers to maintain health
    insurance for their people who are also members of the Guard
    and Reserve. I thank you for your statement. We are continuing
    to look at that.
        Ms. Schwartz. Thank you, Mr. Chairman. There are no simple
    answers. I appreciate your support.
        Senator Stevens. Thank you.
        [The statement follows:]

                       Prepared Statement of Sue Schwartz

                               EXECUTIVE SUMMARY

    Active Force Issues
        Personnel Strengths and Operations Tempo.--The Military Coalition
    strongly recommends restoration of Service end strengths to sustain the
    long-term global war on terrorism and fulfill national military
    strategy. The Coalition supports increases in 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.
        Commissaries.--The Military Coalition opposes all privatization and
    variable-pricing initiatives and strongly supports full or even
    enhanced funding of the commissary subsidy to sustain the current level
    of service for all patrons, including Guard and Reserve personnel and
    their families.
        Family Readiness and Support.--The Military Coalition urges funding
    for improved family readiness through education and outreach programs
    and increased childcare availability for servicemembers and their
    families and associated support structure to assist families left
    behind during deployments of active duty, Guard and Reserve members.

    Retirement Issues
        Combat Related Special Compensation Claims Processing.--The
    Military Coalition urges Subcommittee leaders and members to ensure
    that DOD has sufficient funding to provide adequate resources for the
    timely processing of combat related special compensation claims.

    Guard And Reserve Issues
        Selected Reserve Montgomery GI Bill Improvements.--The Military
    Coalition recommends funding to raise SR-MGIB benefit levels to 47
    percent of the active duty MGIB rate and support to allow reservists
    who serve non-consecutive tours of 24 months or more active duty within
    a five-year period to enroll in the active duty MGIB.

    Health Care Issues
        Full Funding For The Defense Health Budget.--The Military Coalition
    strongly recommends the Subcommittee continue its watchfulness to
    ensure full funding of the Defense Health Program, including military
    medical readiness, needed TRICARE Standard improvements, and the DOD
    peacetime health care mission. It is critical that the Defense Health
    Budget be sufficient to secure increased numbers of providers needed to
    ensure access for TRICARE beneficiaries in all parts of the country.
        Pharmacy Cost Shares for Retirees.--The Military Coalition urges
    the Subcommittee to continue to reject imposition of cost shares in
    military pharmacies, oppose increasing other pharmacy cost shares that
    were only recently established, and to provide full funding for the
    Defense Health Pharmacy Program. We urge the Subcommittee to ensure
    that Beneficiary Advisory Groups' inputs are included in any studies of
    pharmacy services or copay adjustments.
        Healthcare for Members of the National Guard and Reserve.--The
    Military Coalition urges the Subcommittee to take action to appropriate
    sufficient funds and support permanent authorization of the Temporary
    Reserve Health Care Program (Sec. 702, 703, and 704 Public Law 108-136)
    to support readiness, family morale, and deployment health preparedness
    for Guard and Reserve servicemembers.
        The Military Coalition urges the Subcommittee to appropriate
    sufficient funds to provide for federal payment of civilian health care
    premiums (up to the TRICARE limit) as an option for mobilized service
    members.
        The Military Coalition recommends the Subcommittee provide
    sufficient funding to permit expansion of the TRICARE Dental Plan
    benefits for Guard and Reserve servicemembers. This would allow all
    National Guard and Reserve members to maintain dental readiness and
    alleviate the need for dental care during training or mobilization.

                                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

        Personnel Strengths and Operations Tempo.--The Coalition is
    dismayed at the Department of Defense's reluctance to accept Congress'
    repeated offers to increase Service end strength to relieve the stress
    on today's armed forces, who are clearly now sustaining an increased
    operations tempo to meet today's global war on terror. While we are
    encouraged by the Army's announcement to temporarily increase their end
    strength by 30,000, we are deeply concerned that Administration-
    proposed plans for selected temporary manpower increases rely too
    heavily on continuation of stop-loss policies, unrealistic retention
    assumptions, overuse of the Guard and Reserves, optimistic scenarios in
    Southwest Asia, and the absence of any new contingency needs.
        Administration and military leaders warn of a long-term mission
    against terrorism that requires sustained, large deployments to Central
    Asia and other foreign countries. The Services simply do not have
    sufficient numbers to sustain the global war on terrorism, deployments,
    training exercises and other commitments, so we have had to recall
    significant numbers of Guard and Reserve personnel. For too many years,
    there has always been another major contingency coming, on top of all
    the existing ones. If the Administration does not recognize when extra
    missions exceed the capacity to perform them, the Congress must assume
    that obligation.
        The Coalition strongly believes that earlier force reductions went
    too far and that the size of the force should have been increased
    several years ago to sustain today's pace of operations. Deferral of
    meaningful action to address this problem cannot continue without
    risking serious consequences. Real relief is needed now. There is no
    certainty that missions will decline, which means that the only prudent
    way to assure we relieve the pressure on servicemembers and families is
    to increase the size of the force.
        Some argue that it will do little good to increase end strengths,
    questioning whether the Services will be able to meet higher recruiting
    goals. The Coalition believes strongly that this severe problem can and
    must be addressed as an urgent national priority, with increases in
    recruiting budgets if that proves necessary.
        Others point to high reenlistment rates in deployed units as
    evidence that high operations tempo actually improves morale. But much
    of the reenlistment rate anomaly is attributable to tax incentives that
    encourage members to accelerate or defer reenlistment to ensure this
    occurs in a combat zone, so that any reenlistment bonus will be tax-
    free. Retention statistics are also skewed by stop-loss policies. Over
    the long run, past experience has shown that time and again smaller but
    more heavily deployed forces will experience family-driven retention
    declines.
        Action is needed now. Failing to do so will only deepen the burden
    of already over-stressed troops and make future challenges to retention
    and recruiting worse.
        The Military Coalition strongly recommends restoration of Service
    end strengths to sustain the long-term global war on terrorism and
    fulfill national military strategy. The Coalition supports increases in
    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.
        Commissaries.--The Coalition continues to be very concerned about
    preserving the value of the commissary benefit--which is widely
    recognized as the cornerstone of quality of life benefits and a valued
    part of the servicemembers' total compensation package.
        During the past year, the Department of Defense announced plans to
    close a number of commissaries, replace the traditional three-star
    officer serving as chairman of the Commissary Operating Board (COB)
    with a political appointee, and require a study on instituting variable
    pricing for commissary products. These proposals are apparently
    intended to save money by reducing the annual appropriation supporting
    the Defense Commissary Agency (DeCA), which operates 275 commissaries
    worldwide. The COB recommendation is also viewed as another indicator
    of DOD's ongoing interest in eventually privatizing the benefit.
        The Coalition supports cost savings and effective oversight and
    management. However, we are concerned about the unrelenting pressure on
    DeCA to cut spending and squeeze additional efficiencies from its
    operations--despite years of effective reform initiatives and
    recognition of the agency for instituting improved business practices.
        The Coalition is particularly opposed to the concept of variable
    pricing, which the Administration acknowledges is aimed at reducing
    appropriated funding. This can only come at the expense of reducing
    benefits for patrons.
        The commissary is a highly valued quality of life benefit not
    quantifiable solely on a dollars appropriated basis. As it has in the
    past, The Military Coalition opposes any efforts to privatize
    commissaries or reduce benefits to members, and strongly supports full
    funding of the benefit in fiscal year 2005 and beyond.
        The Military Coalition opposes all privatization and variable-
    pricing initiatives and strongly supports full or even enhanced funding
    of the commissary benefit to sustain the current level of service for
    all patrons, including Guard and Reserve personnel and their families.
        Family Readiness and Support.--Family readiness is a key concern
    for the approximately 60 percent of servicemembers with families.
    Allocating adequate resources for the establishment and maintenance of
    family readiness and support programs is part of the cost of
    effectively fulfilling the military mission.
        Servicemembers and their families must understand and be aware of
    benefits and programs available to them and who to contact with
    questions and concerns--both at the command level and through the
    respective Service or Department of Defense--in order to effectively
    cope with the challenges of deployment. It is also important to meet
    childcare needs of the military community including Guard and Reserve
    members who are being called to active duty in ever-increasing numbers.
        The Military Coalition urges funding for improved family readiness
    through education and outreach programs and increased childcare
    availability for servicemembers and their families and associated
    support structure to assist families left behind during deployments of
    active duty, Guard and Reserve members.

                               RETIREMENT ISSUES

        Combat Related Special Compensation Claims Processing.--The
    Military Coalition applauds Congress for the landmark provisions in the
    fiscal year 2004 National Defense Authorization Act that expand combat
    related special compensation to all retirees with combat-related
    disabilities and authorizes--for the first time ever--the unconditional
    concurrent receipt of retired pay and veterans' disability compensation
    for retirees with disabilities of at least 50 percent. Disabled
    retirees everywhere are extremely grateful for this Subcommittee's
    action to reverse an unfair practice that has disadvantaged disabled
    retirees for over a century.
        However, we are becoming increasingly aware of growing problems
    with combat related special compensation claims processing. Large
    numbers of applicants are waiting six months or more for decisions. The
    Services have acknowledged that the expanded authority will increase
    backlogs even more. The Coalition believes DOD must have sufficient
    funding to meet staffing and other support requirements to ensure
    claims are processed in a reasonable period of time.
        The Military Coalition urges Subcommittee leaders and members to
    ensure DOD has sufficient funding to provide adequate resources for the
    timely processing of combat related special compensation claims.

                            GUARD AND RESERVE ISSUES

        Selected Reserve Montgomery GI Bill Improvements.--Individuals who
    first become members of the National Guard or Reserve are eligible for
    the Selected Reserve Montgomery GI Bill (SR-MGIB) under Chapter 1606 of
    Title 10 U.S. Code. But SR-MGIB benefits have declined sharply compared
    to active duty benefits and need to be restored.
        During the first fifteen years of the SR-MGIB program (1985-1999),
    benefits maintained 47 percent comparability with the active duty MGIB
    authorized under Title 38. But in the last few years, the SR-MGIB has
    slipped to a 29 percent ratio with the basic program due to benefit
    increases that were enacted only for the active duty program. The drop
    in reserve benefits happened at a time when the Guard and Reserve have
    been mobilized and deployed unlike any other time since World War II.
    In addition, many reservists have been mobilized for more than one
    extended tour of active duty. If the tours add up to 24 months of
    active duty but are served non-consecutively, the reservists are not
    eligible for the active duty MGIB.
        The Military Coalition recommends funding to raise SR-MGIB benefit
    levels to 47 percent of the active duty MGIB rate and support to allow
    reservists who serve non-consecutive tours of 24 months or more active
    duty within a five-year period to enroll in the active duty MGIB.
        Guard/Reserve Family Readiness and Support.--All military families
    experience high stress levels when their military spouses are deployed
    in harms way. National Guard and Reserve families are no exception. In
    their case, however, military base support networks are rarely
    available to them due to their geographic dispersion across the nation.
    The Services and the Defense Department have initiated new programs to
    support the growing needs of reserve component families but more needs
    to be done.
        The Guard and Reserve have increased the number of paid family
    readiness coordinators and established more Family Assistance Centers
    to help volunteers and provide basic information. The challenge is
    providing consistent and reliable information on benefits and services
    across all of the reserve components. For example, the Air National
    Guard employs professional family coordinators but the Army National
    Guard does not. Another concern is the lack of childcare services for
    mobilized Guard and Reserve families.
        The Military Coalition urges adequate funding for family readiness
    services through education and outreach programs, increased childcare
    availability for servicemembers and their families, and associated
    support services to assist families left behind during deployments of
    active duty, Guard and Reserve members.

                               HEALTH CARE ISSUES

        The Military Coalition is most appreciative of the Subcommittee's
    exceptional efforts over several years to honor the government's health
    care commitments to all uniformed services beneficiaries. These
    Subcommittee-sponsored enhancements represent great advancements that
    should significantly improve health care access while saving all
    uniformed services beneficiaries thousands of dollars a year. The
    Coalition particularly thanks the Subcommittee for last year's
    outstanding measures to address the needs of TRICARE Standard
    beneficiaries as well as to provide increased access for members of the
    Guard and Reserves.
        While much has been accomplished, we are equally concerned about
    making sure that subcommittee-directed changes are implemented and the
    desired positive effects actually achieved. We also believe some
    additional initiatives will be essential to providing an equitable and
    consistent health benefit for all categories of TRICARE beneficiaries,
    regardless of age or geography. The Coalition looks forward to
    continuing our cooperative efforts with the Subcommittee's members and
    staff in pursuit of this common objective.
        Full 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--including
    graduate medical education and continuing education, full funding of
    both direct care and purchased care sectors, providing access to the
    military health care system for all uniformed services beneficiaries,
    regardless of age, status or location. A fully funded health care
    benefit is critical 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.
        We are grateful that last year, Congress provided supplemental
    appropriations to meet growing requirements in support of the
    deployment of forces to Southwest Asia and Afghanistan in the global
    war against terrorism.
        But we are concerned by reports from the Services that the current
    funding level falls short of that required to meet current obligations
    and that additional supplemental funding will once again be required.
    For example, we have encountered several instances in which local
    hospital commanders have terminated service for retired beneficiaries
    at military pharmacies, citing budget shortfalls as the reason. Health
    care requirements for members returning from Iraq are also expected to
    strain the military delivery system in ways that we do not believe were
    anticipated in the budgeting process.
        Similarly, implementation of the TRICARE Standard requirements in
    last year's Authorization Act--particularly those requiring actions to
    attract more TRICARE providers--will almost certainly require
    additional resources that we do not believe are included in the budget.
    Addrerssing these increased readiness requirements, TRICARE provider
    shortfalls and other needs will most likely require additional funding.
        The Military Coalition strongly recommends the Subcommittee
    continue its watchfulness to ensure full funding of the Defense Health
    Program, including military medical readiness, needed TRICARE Standard
    improvements, and the DOD peacetime health care mission. It is critical
    that the Defense Health Budget be sufficient to secure the increased
    numbers of providers needed to ensure access for TRICARE beneficiaries
    in all parts of the country.
        Pharmacy Cost Shares for Retirees.--Late last year, the Office of
    Management and Budget (OMB) and the Defense Department considered a
    budget proposal that envisioned significantly increasing retiree cost
    shares for the TRICARE pharmacy benefit, and initiating retiree copays
    for drugs obtained in the direct care system. While the proposal was
    put on hold for this year, the Coalition is very concerned that DOD is
    undertaking a review that almost certainly will recommend retiree copay
    increases in fiscal year 2006.
        It was less than three years ago that Congress authorized and
    appropriated adequate funding for the TRICARE Senior Pharmacy Program
    (TSRx) and DOD established $3 and $9 copays for all beneficiaries.
    Defense leaders highlighted this at the time as ``delivering the health
    benefits military beneficiaries earned and deserve.'' But the Pentagon
    already has changed the rules, with plans to remove many drugs from the
    uniform formulary and raise the copay on such drugs to $22.
        Now, there are new proposals to double and triple the copays for
    drugs remaining in the formulary--to $10 and $20, respectively. One can
    only surmise that this would generate another substantial increase in
    the non-formulary copay--perhaps even before the $22 increase can be
    implemented.
        Budget documents supporting the change rationalized that raising
    copays to $10/$20 would align DOD cost shares with those of the VA
    system. This indicates a serious misunderstanding of the VA cost
    structure, unless the Administration also plans to triple VA cost
    shares. At the present time, the VA system requires no copayments at
    all for medications covering service-connected conditions, and the cost
    share for others is $7.
        The Coalition believes this Subcommittee will appropriate the funds
    needed to meet uniformed services retiree health care commitments if
    only the Administration will budget for it. The Coalition is concerned
    that DOD does not seem to recognize that it has a unique responsibility
    as an employer to those who served careers covering decades of arduous
    service and sacrifice in uniform. Multiple administrations have tried
    to impose copays in military medical facilities, and Congress has
    rejected that every time. We hope and trust that will continue.
        The Coalition vigorously opposes increasing retiree cost shares
    that were only recently established. Congress' recent restoration of
    retiree pharmacy benefits helped restore active duty and retired
    members' faith that their government's health care promises would be
    kept. If implemented, this proposal would undermine that trust, which
    in the long term can only hurt retention and readiness.
        The Military Coalition urges the Subcommittee to continue to reject
    imposition of cost shares in military pharmacies, oppose increasing
    other pharmacy cost shares that were only recently established and to
    provide full funding for the Defense Health Pharmacy Program. We urge
    the Subcommittee to ensure that Beneficiary Advisory Groups' inputs are
    included in any studies of pharmacy services or copay adjustments.
        Healthcare for Members of the National Guard and Reserve.--The
    Military Coalition is most appreciative to Congress for ensuring that
    the Temporary Reserve Health Care Program was included in the fiscal
    year 2004 National Defense Authorization Act. This program will provide
    temporary coverage, until December 2004, for National Guard and Reserve
    members who are uninsured or do not have employer-sponsored health care
    coverage. TRICARE officials plan to build on existing TRICARE
    mechanisms to expedite implementation; however, no one is certain how
    long this will take. Immediate implementation and full funding is
    required.
        The Coalition is grateful to the Congress for their efforts to
    enact Sec. 703 and 704 of the fiscal year 2004 NDAA. Sec. 703--Earlier
    Eligibility Date for TRICARE Benefits for Members of Reserve Components
    provides TRICARE health care coverage for reservists and their family
    members starting on the date a ``delayed-effective-date order for
    activation'' is issued. Sec. 704--Temporary Extension of Transitional
    Health Care Benefits changes the period for receipt of transitional
    health care benefits from 60 or 120 days to 180 days for eligible
    beneficiaries.
        Congress recognized the extraordinary sacrifices of our citizen-
    soldiers, by enacting extending this pre- and post-mobilization
    coverage. Now it's time to recognize the changed nature of 21st century
    service in our nation's reserve forces by making these pilot programs
    permanent and provide full funding.
        The Military Coalition urges the Subcommittee to take action to
    appropriate sufficient funding and support permanent authorization of
    the Temporary Reserve Health Care Program (Sec. 702, 703, and 704
    Public Law 108-136) to support readiness, family morale, and deployment
    health preparedness for Guard and Reserve servicemembers.
        Health insurance coverage varies widely for members of the Guard
    and Reserve: 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.
    Guard and Reserve family members are eligible for TRICARE if the
    member's orders to active duty are for more than thirty days; but, many
    of these families would prefer to preserve the continuity of their
    health insurance. Being dropped from private sector coverage as a
    consequence of extended activation adversely affects family morale and
    military readiness and discourages some from reenlisting. Many Guard
    and Reserve families live in locations where it is difficult or
    impossible to find providers who will accept new TRICARE patients.
    Recognizing these challenges for its own reservist-employees, the
    Department of Defense routinely pays the premiums for the Federal
    Employee Health Benefit Program (FEHBP) when activation occurs. This
    benefit, however, only affects about ten percent of the Selected
    Reserve.
        The Military Coalition urges the Subcommittee to appropriate
    sufficient funds to provide for federal payment of civilian health care
    premiums (up to the TRICARE limit) as an option for mobilized service
    members.
        Dental readiness is another key aspect of readiness for Guard and
    Reserve personnel. Currently, DOD offers a dental program to Selected
    Reserve members and their families. The program provides diagnostic and
    preventive care for a monthly premium, and other services including
    restorative, endodontic, periodontic and oral surgery services on a
    cost-share basis, with an annual maximum payment of $1,200 per enrollee
    per year. However, only five percent of eligible members are enrolled.
        During this mobilization, soldiers with repairable dental problems
    were having teeth pulled at mobilization stations in the interests of
    time and money instead of having the proper dental care administered.
    Congress responded by passing legislation that allows DOD to provide
    medical and dental screening for Selected Reserve members who are
    assigned to a unit that has been alerted for mobilization in support of
    an operational mission, contingency operation, national emergency, or
    war. Unfortunately, waiting for an alert to begin screening is too
    late. During the initial mobilization for Operation Iraqi Freedom, the
    average time from alert to mobilization was less than 14 days,
    insufficient to address deployment dental standards. In some cases,
    units were mobilized before receiving their alert orders. This lack of
    notice for mobilization continues, with many reservists receiving only
    days of notice before mobilizing.
        The Military Coalition recommends the Subcommittee provide
    sufficient funding to permit expansion of the TRICARE Dental Plan
    benefits for Guard and Reserve servicemembers. This would allow all
    National Guard and Reserve members to maintain dental readiness and
    alleviate the need for dental care during training or mobilization.

                                   CONCLUSION

        The Military Coalition reiterates its profound gratitude for the
    extraordinary progress this Subcommittee has made in advancing 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.

    STATEMENT OF JANET RUBIN, M.D., ON BEHALF OF THE
                NATIONAL COALITION FOR OSTEOPOROSIS AND
                RELATED BONE DISEASES
        Senator Stevens. Dr. Janet Rubin. Good morning, Doctor.
        Dr. Rubin. Mr. Chairman, I am Janet Rubin. I am a professor
    in the Department of Medicine at Emory University and a staff
    physician at the Atlanta Veterans Medical Center. I am
    representing the National Coalition for Osteoporosis and
    Related Bone Diseases and I seek your continued support for
    Department of Defense funding of the bone health and military
    medical readiness research program.
        Bone health is an essential element of military readiness.
    Our troops must be ready and able to endure vigorous activity
    during combat training and force operations. Musculoskeletal
    injury is, however, an unfortunate result of training. In
    particular stress fracture accounts for more loss duty days in
    the active duty population than any other injury. Stress
    fractures compromise our military's operational readiness,
    drive up health care costs, and increase personnel attrition.
    The stress fracture takes a soldier out of combat as quickly as
    an entry wound and requires weeks for healing.
        Consider those young people entering basic training. As
    many as 5 percent of male recruits sustain stress fractures. In
    the case of females, the number may rise to as much as 20
    percent, and even trained soldiers who switch from light to
    heavy physical duty are at risk for stress fracture.
        The current bone health and military medical research
    program was developed and funded with the goal of eliminating
    stress fractures in all recruits. The program's successes to
    date are many. I am going to give you a sampling of what we
    have learned and what DOD-funded scientists are pursuing and
    have published in more than 100 publications.
        Recruits are frequently deficient in vitamin D and calcium.
    The optimal level of supplementation of these and other
    vitamins and minerals for active young people is under
    investigation.
        Recruits with family histories of osteoporosis are at
    higher risk for stress fracture. DOD-supported scientists have
    modeled osteoporosis genes in mice, revealing genes that can
    predict bone quality and bone structure. Indeed, bone structure
    plays a critical role in stress fracture. We are only just
    starting to understand how skeletal structure of women differs
    from men. DOD-funded research suggests that the smaller bones
    of women may be underpowered for the weight they bear during
    training, increasing the risk of stress fracture. The training
    of female recruits may, thus, require added bone protective
    strategies.
        Scientists in this program are also trying to understand
    how biomechanical signals cause bone formation and improved
    bone strength during exercise. One DOD-funded study suggests
    that bone fluid flow stimulates bone cells to make stronger
    bones.
        Of course, improving diagnosis of stress fracture is a
    topic of this program, including improvement and
    standardization of noninvasive measurements of bone. We would
    like to be able to better predict incipient fractures. An
    increase in the porosity of bone appears to precede the
    fracture. We hope that detection of this porosity with new
    instrumentation will improve prevention.
        Last, we need to design better treatment algorithms to get
    our soldiers back on their feet and prevent chronic disability
    such as pain and degenerative joint disease. DOD-funded
    scientists are studying both pulsed ultrasound and dynamic
    electrical fields as novel adjuncts to standard rest therapy.
        Mr. Chairman, we are all aware that stress fractures and
    other bone-related injuries erode the physical capability and
    effectiveness of our combat training units. Military readiness
    suffers. A small investment in bone health research can make a
    large contribution to our combat readiness. Therefore, it is
    imperative that the Department of Defense build on these recent
    findings and maintain an aggressive and sustained bone health
    research program at a level of $6 million in fiscal year 2005.
        Thank you.
        Senator Stevens. I understand there are some new techniques
    for inquiring about the osteoporosis and other such bone
    defects. Do you advocate that women recruits be given those
    tests before they enter the service?
        Dr. Rubin. I think it would help to know if their bone
    density was very low. One of the problems that we have in the
    osteoporosis field that, although, for instance, dual x-ray
    absorptiometry (DXA) is the gold standard for measuring bone
    density, it really does not predict bone structure. So it is a
    poor measure of young women in terms of what they can bear. So
    I think it would probably be worthwhile to measure bone density
    in young women, yes.
        Senator Stevens. Thank you very much, Doctor. We appreciate
    your coming.
        [The statement follows:]

                    Prepared Statement of Janet Rubin, M.D.

        Mr. Chairman and Members of the Committee, I am Janet Rubin, M.D.,
    Professor, Department of Medicine, Emory University and Staff Physician
    at the Atlanta Veterans Affairs Medical Center. I am here today on
    behalf of the National Coalition for Osteoporosis and Related Bone
    Diseases to urge your support in maintaining the Bone Health and
    Military Medical Readiness research program within the Department of
    Defense and providing necessary funding to preserve the program. The
    members of the Bone Coalition are the American Society for Bone and
    Mineral Research, the National Osteoporosis Foundation, the Paget
    Foundation for Paget's Disease of Bone and Related Disorders, and the
    Osteogenesis Imperfecta Foundation.
        Bone health is an essential element of military readiness. The goal
    of the Department of Defense (DOD) is to guarantee military readiness
    by keeping our forces trained, equipped and ready to adapt to emerging
    threats. Our troops must be ready and able to endure vigorous activity
    during combat training as well as during force operations. Soldiers are
    always at risk of injury, incapacitation, and degraded performance
    resulting from injuries such as stress fractures--all of which
    compromise the mission, readiness, and budget of the Armed Forces.
        Although the benefits of strenuous physical activity are well
    documented, these activities are also known to incur certain risks.
    Musculoskeletal injury, for example, is the most common morbidity in
    civilian and military populations who participate in physical activity.
    In fact, fractures account for the highest number of lost duty days in
    the active duty population of any injury. These injuries incur a high
    cost to the DOD not only in lost duty days, but in health care, lost
    training time, and attrition of personnel. Ultimately, the operational
    readiness of U.S. military forces is severely compromised.
        Stress fractures are one of the most common and potentially
    debilitating overuse injuries experienced in the military recruit
    population. Stress fractures occur in 0.8 to 5.2 percent of male
    recruits, and from 3 to 21 percent of female recruits. Recent research
    suggests that several factors may contribute to the increased risk for
    stress fracture suffered by women, including the density, shape, and
    size of their bones (which affect bone quality), and their nutritional,
    hormonal and physical conditioning status.
        Lack of physical conditioning affects the United States as a whole,
    along with the military population in particular. An Institute of
    Medicine report published in 1998 by the Subcommittee on Body
    Composition, Nutrition and Health of Military Women concluded that the
    low initial fitness of recruits, both cardiorespiratory and
    musculoskeletal, appeared to be the principal factor in the development
    of stress fractures during basic training. The Committee also concluded
    that muscle mass, strength, and endurance played a critical role in the
    development of stress fracture. Now we know from DOD-funded research
    that bone structure adds to the risk of fracture, along with a history
    of poor diet, lack of exercise, hormonal imbalances and genetic
    factors. Ethnicity also plays a part.
        Isn't basic training good for recruits' health, you may wonder. The
    answer is yes and no. Exercise is important to building bone health,
    but the type of exercise and the transition to new exercise regiments
    play a role in bone strength. Many new recruits, upon arrival for basic
    training, are unaccustomed to intense exercise, particularly strenuous
    running and marching activities. Under normal circumstances, the
    increased demand placed on bone tissue causes the bone to remodel to
    adapt to the new loads, and become stronger in the areas of higher
    stress. However, if the remodeling response of the bone cannot keep
    pace with the repetitive demands placed on a service member during the
    8 to 12 week training period, a stress fracture may result. Without
    proper rest and time to heal, the stress fracture may lead to chronic
    pain and disability.
        Different types of stress fractures require different treatment.
    For example, femoral neck or hip stress fractures can sometimes
    progress to full fractures and interrupt the blood supply to the thigh
    bone portion of the hip joint. This in turn can cause early
    degenerative changes in the hip joint. Physicians consider the femoral
    neck stress fracture to be a medical emergency requiring immediate
    treatment. Researchers have raised concerns regarding the possible
    relationship between increased risk for stress fracture and long-term
    risk of osteoporosis, osteoarthritis, and other bone diseases.
        Like hip stress fractures, stress fractures of the navicular (foot
    bone), anterior cortex of the tibia (front portion of the mid-
    shinbone), and proximal fifth metatarsal (a bone in the foot) are also
    slow to heal. Many of these diagnoses require an affected service
    member cease training for a lengthy period of medical care and
    rehabilitation until the fracture has healed. At one basic training
    location, over 70 percent of the injured soldiers pulled from training
    were diagnosed with overuse bone injuries.
        While stress fracture injury is seen primarily in new recruits,
    anyone who suddenly increases his or her frequency, intensity, or
    duration of physical activity, such as a recently called-up reservist
    is potentially at risk for developing lower body stress fractures.
        The study of bone health is not a simple task, as bone health
    requires a complex interaction between exercise and other factors that
    affect bone remodeling, such as nutrition, hormonal status, genetics,
    and biomechanics. Currently, there is a distinct gap in understanding
    the effects of exercise and other factors on normal bone remodeling in
    a young adult population; more research is needed to determine the best
    types of exercise regimens to build and maintain healthy bone.
    Moreover, an understanding of all factors affecting bone health,
    particularly in young, healthy men and women, is necessary to fully
    describe the physiological response of bone and muscle to the physical
    demands placed on our service members, and to maintain the health and
    military readiness of our service members.
        At this point, Mr. Chairman I would like to identify some of the
    promising studies currently being funded by the DOD:

    Current Studies
        Identifying key mineral and other nutritional levels needed in
    military rations to ensure optimal bone health of recruits:
      --Vitamin D, for example, is known to be deficient in the population
            at large, particularly in sunlight-deprived individuals, and
            yet it, like calcium, is key to bone health. Researchers are
            working to determine the proper level of vitamin D required in
            the military population. A related question is: What levels of
            vitamin D supplementation are necessary to maintain bone
            health?
      --The effect of calcium and calorie intake on the incidence of stress
            fractures in the short term, and osteoporosis in the long term,
            is another subject of investigation.
      --How do caloric restriction and disordered eating patterns--and/or
            related amenorrhea or menstrual period cessation--affect
            hormonal balance and the accrual and maintenance of peak bone
            mineral content is a question also under investigation.
        Researching the association between stress fractures and physical
    training methods, including an examination of past injuries and the
    effects of poor nutrition, lack of exercise, smoking, use of anti-
    inflammatory medications, alcohol and oral contraceptives, all of which
    may negatively affect bone.
        Examining the mechanisms of bone cell stimulation from the flow of
    surrounding fluids during compression (loading) of the bone. As the
    bone is repeatedly compressed due to physical activity, fluid flows in
    a network of spaces; this oscillating fluid flow is a potent stimulator
    of bone cells.
        Comparing recovery times from tibial stress fracture in subjects
    treated with active or placebo-controlled electric field stimulation,
    including evaluation of male and female responses.
        Assessing the fracture healing impact of pulsed ultrasound.
        Attempting to accelerate stress fracture healing time using
    conservative but generally favored treatments of rest from weight
    bearing activity (this averages three months).
        With DOD's critical investment support, the findings are already
    impressive:
      --Poor physical fitness when recruit training is initiated has been
            identified as a strong predictor of injury. This has led to the
            development of a scientifically based intervention to reduce
            injuries at the Marine Corp Recruit Depot. An evaluation of
            this intervention demonstrated an overall reduction in overuse
            injuries and a 50 percent reduction in stress fractures, with
            no decrement in physical fitness at graduation.
      --Muscle elasticity--as measured by ultrasound--has been shown to
            undergo physiological alterations with an abrupt transition to
            a running training program similar to that employed for
            military recruit training. MRI allows for imaging of soft
            tissue and can detect these alterations in muscle structure
            during running. Combining ultrasound characterization with MRI
            scanning of the muscle recruitment during running will
            ultimately enable physicians to pinpoint the relationship of
            muscle elasticity to the level of tibial stress, and,
            ultimately, fracture risk.
      --Being able to assess metabolism and bone growth in humans will
            advance our understanding of bone remodeling: key to building
            and maintaining strong bone. DOD-funded scientists have
            developed a prototype of the highest resolution positron
            emission tomography (PET) devise existing to focus on meeting
            this need for improved assessment.
      --Data suggests that increased bone remodeling precedes the
            occurrence of bone microdamage and stress fractures.
            Researchers found that increases in cortical bone porosity
            precede the accumulation of bone microdamage, suggesting an
            important role of increased intracortical remodeling in the
            development of stress fractures. If we can detect this porosity
            before microdamage occurs, we could prevent stress fractures.

    Areas of Need
        Improved and more sensitive methods are needed for the noninvasive
    assessment of bone metabolism along with standard measurements of bone
    density and other parameters of bone strength to assess normal bone
    remodeling, impending risk of bone injury, and bone responses to
    treatment interventions.
        Structural and biomechanical factors that contribute to tibial
    stress fracture risk need to be explored using recent advances in
    technology to detect microscopic damage to tibial bone structure non-
    invasively, before occurrence of stress fracture injuries.
        We need to determine the relationship between whole bone geometry
    and tissue fragility in the human tibia, testing the linkage between
    geometry, gender, and the occurrence of low-impact bone fractures
    (those that occur with minimum force).
        DOD scientists' research in genetic determinants of bone quality
    may ultimately help protect women and men against musculoskeletal
    injuries. Bone mineral density, while a major determinant of bone
    strength, is just one parameter of bone quality. Both geometric
    characteristics and density of bone are related to bone strength, and
    muscle strength and endurance have been linked to the ability of bone
    to withstand repetitive loading. Thus, susceptibility to stress
    fracture clearly has both bone and muscle components. Research on the
    effects of genetics, diet and nutrition, mechanical load, and other
    factors that might affect bone quality can now be studied using new
    technologies, such as magnetic resonance imaging, peripheral
    quantitative computed tomography, regional DXA, and tibial ultrasound,
    and has the potential to provide great insight into the bone remodeling
    and adaptation process. In addition, new techniques such as virtual
    bone biopsies are under development to provide more critical data.
        Mr. Chairman, stress fractures and other bone related injuries
    erode the physical capabilities and reduce the effectiveness of our
    combat training units, compromising military readiness. A small
    investment in bone health research can make a large contribution to
    combat readiness. Therefore, it is imperative that the Department of
    Defense build on recent findings and maintain an aggressive and
    sustained bone health research program at a level of $6 million in
    fiscal year 2005.

        Senator Stevens. My good friend, the co-chairman, is here.
    Do you have any opening statement, Senator?
        Senator Inouye. No, thank you.
        Senator Stevens. Very well.
        Vice President Howard R. Hall of the Joslin Diabetes Center
    please. Good morning.

    STATEMENT OF HOWARD R. HALL, VICE PRESIDENT, JOSLIN
                DIABETES CENTER
        Mr. Hall. Good morning. Mr. Chairman and Senator Inouye,
    thank you for this opportunity to report on the progress of the
    Joslin Diabetes Center cooperative telemedicine project with
    the DOD and the Veterans Administration (VA) for the diagnosis,
    management, and treatment of diabetes and diabetic retinopathy,
    Army Research, Development, Test and Evaluation (RDT&E) medical
    advanced technology PE0603002A.
        I am Howard Hall of the Joslin Diabetes Center. I am also
    here to request continued level funding at $5 million for this
    collaborative project in fiscal year 2005.
        As both of you know I believe, the Joslin Vision Network
    (JVN) Eye Care and Comprehensive Diabetes Management Program is
    a telemedicine initiative designed to access all people with
    diabetes into cost effective, quality diabetes and eye programs
    across cultural and geographic boundaries with reduced costs.
        I am pleased to report that these innovative JVN eye care
    and diabetes management programs are being deployed not only in
    the DOD but also throughout the Indian Health Service (IHS) and
    VA health care systems. Already we have 52 sites in 18 States
    and the District of Columbia.
        Currently the JVN telemedicine eye care system is the only
    non-mydriatic system available that has been rigorously
    validated, equivalent to the current gold standard for
    retinopathy diagnosis.
        Version 3 of the Joslin eye care is ready for deployment
    this summer and will be simpler and less expensive to operate.
    A new prototype JVN retinal imaging system that is portable and
    50 percent less costly has been developed and is being to
    undergo initial clinical validation.
        Joslin has completed the first phase in the use of
    automated detection of diabetic retinopathy which can increase
    the cost efficiency of the JVN system by 42 percent.
    Recognizing the need to manage total care of diabetic patients
    and to empower better self-management so as to realize a
    prevention of vision loss, the DOD/VA/Joslin collaborative has
    developed the JVN comprehensive diabetes management program
    (CDMP) using web-based interactive technologies.
        By the end of this May 2004, CDMP will be integrated into
    the DOD Healtheforces website for daily use. In addition, CDMP
    is expected to be fully operational for both the VA VISN system
    and in the Indian Health Services in July 2004.
        The CDMP, the comprehensive diabetes management program,
    can result in a three- to seven-fold reduction in health care
    expenses.
        The requested continuation of the current level of funding
    for 2005, $5 million, will provide support for the existing JVN
    eye care system for deployment of the JVN comprehensive
    diabetes management program to participating sites, for
    continued JVN refinements, and quite important, to perform
    critical prospective clinical studies.
        Mr. Chairman, Joslin is pleased to be a part of this
    project for the Department of Defense and we are most
    appreciative of the support that you and your colleagues have
    provided to us. Please know that we would be grateful for
    continued support again this year.
        At this time, I would be pleased to answer any questions
    that you or Senator Inouye may have. Thank you.
        Senator Stevens. Thank you very much, Mr. Hall. I think I
    commented to you before my father was blind because of juvenile
    diabetes. We are pleased to try to work with you.
        Mr. Hall. Try to prevent it so others do not have to have
    that. Thank you.
        [The statement follows:]

                      Prepared Statement of Howard R. Hall

    Introduction
        Mr. Chairman and Members of the Committee, thank you for this
    opportunity to appear before you. I am Howard Hall of the Joslin
    Diabetes Center. I am pleased to present an update on the collaborative
    Joslin Diabetes Project with the Departments of Defense and Veteran's
    Affairs on the health concerns related to diabetes.
        Joslin is extremely appreciative of the funds provided for this
    valuable project in the fiscal year 2004 Defense Appropriations Act.
    Our proposal for fiscal year 2005 funding will allow for the DOD/VA/
    Joslin collaborative to continue to enhance research refinements and
    extend clinical developments of Joslin Vision Network (JVN) Eye Care
    and the Comprehensive Diabetes Management Program (CDMP).
        The Joslin Vision Network (JVN) Eye Care and Comprehensive Diabetes
    Management Program (CDMP) is a telemedicine initiative designed to
    access all diabetes patients into cost-effective, quality diabetes and
    eye care programs across geographic and cultural boundaries at reduced
    costs.
        This DOD/VA/Joslin collaborative is the core foundation for these
    innovative eye care and diabetes management programs that are being
    deployed not only in the DOD but also throughout the IHS and VA health
    care systems.
        Collectively, the JVN is deployed at 52 sites in the District of
    Columbia and the following 18 states: Alaska, Arizona, Florida, Hawaii,
    Idaho, Kansas, Maine, Maryland, Massachusetts, Minnesota, Montana, New
    Mexico, Oklahoma, Pennsylvania, South Dakota, Texas, Virginia, and
    Washington.
    Summary
        This request of $5,000,000 represents the collective costs of
    Joslin and associated expenses of the Department of the Army, RDT&E.
    Fiscal Year 2004 Status Report
                JVN Deployment
        As of January 2004 we have deployed in:
      --The Department of Defense infrastructure: 11 independent remote JVN
            imaging sites, 5 centralized JVN reading center sites. and 2
            coordinating independent JVN servers.
      --The VA system: 8 independent remote JVN imaging sites, 4
            centralized JVN reading center sites, and 2 coordinating
            independent JVN servers.
      --The Joslin Diabetes Center system: 7 JVN imaging sites, and 4 JVN
            reading center sites.
                JVN Validation
        Currently the JVN telemedicine's eye care system is the only non-
    mydriatic (no pupil dilation needed) system available that has been
    rigorously validated and shown to be equivalent to the current gold
    standard for retinopathy diagnosis. The JVN validation study results
    were published in the March 2001 issue of Ophthalmology.
                JVN Application Enhancement
        The JVN application has been refined to use totally non-proprietary
    hardware and software and is fully DICOM and HL7 compliant as well as
    being compliant with HIPAA security standards. Workstations are now
    standard PCs with Microsoft 2000 operating systems interfaced with Agfa
    PACS environment which facilitates direct interfaces to DOD CHS and VA
    VISTA medical record systems.
        Preparing for evolving PC functions, JVN Eye Care Version 3 is
    ready for release this summer. With applications written in
    Microsoft.Net operating system-platform, JVN software becomes modular.
    This software enhancement will facilitate addition of new modules to
    expand JVN value and will make JVN simpler and significantly less
    expensive to operate.
                New JVN Retinal Imaging System
        During the initial Cooperative Agreement Joslin undertook the
    development of a retinal imaging system that overcame the limitations
    identified in current commercially available non-mydriatic retrieval
    funders camera imaging systems. A prototype imaging system that is
    portable and 50 percent less costly has been developed and is being
    readied to undergo initial clinical validation.
                JVN Computer-based Detection of Micro-aneurysms for
                        Screening Digital Retinal Images
        This development effort represents the first phase in the use of
    image analysis to automate identification of retinal lesions in
    diabetic retinopathy. This ability will dramatically improve the
    efficiency of the reading center and based on results from the
    retrospective cost efficiency study will have a significant impact on
    cost savings for the use of the JVN system. This effort has been
    completed and results indicate that automated detection can be achieved
    with a sensitivity and specificity of 70 percent. At this level we can
    expect to increase the cost efficiency of the JVN system by 42 percent.
                JVN Comprehensive Diabetes Management Program (CDMP)
        A focus during the first 5 years of the DOD/VA/Joslin collaborative
    was the recognition of the need to develop the JVN Comprehensive
    Diabetes Management Program (CDMP). This development process was
    focused on care management for the diabetic patient using web-based
    interactive technologies. The driver for this application was the need
    to manage the total care of diabetic patients and to empower better
    self-management so as to realize a prevention of vision loss. The
    development of the CDMP was started in year 3 of the funding cycle. The
    JVN eye care component now becomes a module of the larger CDMP
    application. The CDMP application is now ready to be deployed to
    participating sites.
        By the end of May 2004 CDMP will be integrated into DOD
    HealtheForces website for daily use. In addition CDMP is expected to be
    fully operational in both the VA VISN system and in the Indian Health
    Services in July 2004.
                CDMP Phase Two--Prospective Clinical Studies
        Following upon comprehensive Broad Area Announcement (BAA) DOD
    review process the second major phase of the Cooperative Agreement was
    initiated in October 2003: performing the appropriate prospective
    studies aimed at demonstrating the cost effectiveness and clinical
    efficacy of the combined JVN eye care and diabetes management system.
    This is the critical component of the work as the application will not
    be adopted widely without data demonstrating value in terms of cost
    reduction, increased efficiency in usage and increased clinical
    effectiveness.
        Equally important, this program provides a platform for propagating
    the concept of a shared private medical intranet that assembles a
    ``virtual'' medical record that draws on sources of heterogeneous
    information. The ultimate vision with development of the CDMP within
    the DOD, the VA and Joslin is the ability to facilitate implementation
    of a unified medical record that addresses the security and
    confidentiality implications of web-connecting the nation's clinical
    data.
        The major goals of this continuing project are the establishment of
    a telemedicine system for comprehensive diabetes management and the
    assessment of diabetic retinopathy that provides increased access for
    diabetic patients to appropriate care, that centralizes the patients in
    the care process, that empowers the patient to better manage his
    disease, that can be performed in a cost-effective manner, and that
    maintains the high standard of care required for the appropriate
    management of diabetic patients.
        The DOD/VA/Joslin collaborators have designed prospective clinical
    studies to cover a five year period to enable the appropriate
    collection of data and to allow the expected changes to be measured as
    significant clinical outcomes. The collaborators have written manuals
    of operation for these studies, and submitted protocols for review at
    organization IRBs.
        This next phase of the DOD/VA/Joslin research program will assess
    the usability of the JVN CDMP applications, assess diabetic patients'
    current behaviors, undertake a multi-center CDMP clinical outcomes
    efficacy and cost efficiency study, pursue a prospective study of JVN
    Eye Care cost efficiency and conduct a Multi-center JVN Risk Benefit
    Study.
        First studies are slated to begin in June 2004 with the last study
    to start in December 2004. The 3 year-long studies will be completed by
    January 2008. Data analysis will be done from January 2008 to July
    2008.
        The expectation is that these studies will demonstrate that use of
    JVN eye care and CDMP will result in improvements in care of diabetes
    patients, improvements in patient control of diabetes, reduction of
    risks such as blindness, increased productivity of people with diabetes
    in the workplace and a reduction in utilization of expensive hospital
    care resources such as ER visits and length of stay in hospital.
        It is anticipated the studies will also show that CDMP can result
    in a 3 to 7 fold reduction in health care expenses.
                Fiscal Year 2005 Objectives
        The current level of funding for 2005 ($5,000,000) will provide
    support for existing JVN Eye Care systems; for deployment of the JVN
    Comprehensive Diabetes Management Program (CDMP) to participating
    sites; for continued refinements to the JVN platform; to bring on line
    a new, refined JVN Imaging System; and to perform appropriate and
    critical prospective clinical studies that will allow the DOD/VA to
    further refine and increase their clinical effectiveness and cost
    effectiveness of the combined JVN Eye Care and Comprehensive Diabetes
    Management Program (CDMP).
    Joslin Diabetes Project Requested Fiscal Year 2005 Budget
                Administrative and Management Fees
        Administrative and management fees were addressed on page 231 of
    your Conference Report on H.R. 2658 Department of Defense
    Appropriations Act, 2004. Administrative and management fees assessed
    by DOD at 20 percent take $1,000,000 off the top of project
    appropriations thereby reducing the project's reach and delaying full
    implementation of the endeavor.

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    DOD Costs:
        DOD Administrative and Management Costs (@20              $1,000,000
         percent)...........................................
        DOD/VA Participating Sites..........................       1,757,000
                                                             ---------------
          TOTAL DOD/VA Costs................................       2,757,000
                                                             ===============
    Joslin Costs:
        Joslin Vision Network (JVN).........................       1,228,000
        Comprehensive Diabetes Management Program (CDMP)....       1,015,000
                                                             ---------------
          TOTAL Joslin Costs................................       2,243,000
                                                             ===============
          TOTAL Requested Budget............................       5,000,000
    ------------------------------------------------------------------------

        Mr. Chairman, Joslin is please to be a part of this project with
    the Department of Defense and we are most appreciative of the support
    that you and your colleagues have provided to us. Please know that we
    would be grateful for your continued support again this year. At this
    time, I would be pleased to answer any questions from you or any other
    Member of the Committee.

        Senator Stevens. Senator Inouye.
        Senator Inouye. Do you have any estimate as to the number
    of men and women in the military who might be afflicted?
        Mr. Hall. Yes. I think the main thrust for the military--
    there is a chance of people becoming diabetic but most of the
    concern with this was military dependents for the DOD. At the
    same time, the telemedicine comprehensive diabetes management
    program is also being evolved with the Telemedicine and
    Advanced Technology Research Center (TATRIC) into a disease
    management. We are at the stage where this can actually go to
    the front lines.
        That is why we are interested in basically--eye care other
    than diabetes is handled by the portable JVN system, and I am
    just reporting on the diabetes component to you today. I do not
    want to carry it on because with the limited budget we have, as
    indicated in the written testimony, we cannot move out in other
    fields, but we are working on that and I am also looking for
    private funding in that regard.
        Senator Inouye. Thank you, sir.
        Mr. Hall. Thank you.
        Senator Stevens. Thank you very much, Mr. Hall.
        Our next witness is Dr. Christopher Sager, American
    Psychological Association. Good morning, Doctor.
    STATEMENT OF CHRISTOPHER SAGER, Ph.D., ON BEHALF OF THE
                AMERICAN PSYCHOLOGICAL ASSOCIATION
        Dr. Sager. Good morning. Mr. Chairman and Senator Inouye, I
    am Dr. Christopher Sager, Principal Staff Scientist at the
    Human Resources Research Organization. I am submitting
    testimony on behalf of the American Psychological Association,
    APA, a scientific and professional organization of more than
    150,000 psychologists.
        Although I am sure you are aware that a large number of
    psychologists are providing clinical services to our military
    members here and abroad, you may be less familiar with the wide
    range of research conducted by psychological scientists in the
    Department of Defense. Our behavioral researchers work on
    issues critical to national defense with support of the Army
    Research Institute, the Army Research Laboratory, and the
    Office of Naval Research, and the Air Force Research
    Laboratory.
        I would like to address the proposed cuts to the fiscal
    year 2005 human-centered research budgets for these military
    laboratories within the context of the larger Department of
    Defense science and technology (S&T) budget.
        The President's budget request for basic and applied
    research for S&T at DOD in fiscal year 2005 is $10.55 billion,
    a 12.7 percent decrease from the enacted fiscal year 2004
    level. APA joins the Coalition for National Security Research,
    a group of over 40 scientific associations and universities, in
    urging the subcommittee to provide DOD with $12.05 billion for
    S&T in fiscal year 2005. This figure is in line with the
    recommendations of the independent Science Board and the
    Quadrennial Defense Review.
        A portion of this overall defense S&T budget funds critical
    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. Some of my current work, for example,
    focuses on developing measures of characteristics required of
    first-term soldiers and non-commissioned officers in the future
    Army. These efforts will be used to help Army selection and
    promotion systems meet the demands of the 21st century.
        In a congressionally mandated report to this committee, DOD
    reported on the continuing erosion of its own support for
    research on individual and group performance, leadership,
    communication, human-machine interfaces, and decision-making.
    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 operational
    impact.
        Despite the critical need for strong research in this area,
    the administration has proposed an fiscal year 2005 defense
    budget that would slash funding for human-centered research by
    12 percent. Army, Navy, and Air Force basic behavioral research
    would remain essentially flat for fiscal year 2005 and both the
    Air Force and the Army would sustain deep, detrimental cuts to
    applied behavioral research programs, cuts in the range of 35
    percent. APA urges the committee to, at a minimum, restore
    funding for human-centered research at the fiscal year 2004
    level of $477.89 million.
        In closing, I would like to quote again from the DOD's 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.''
        Mr. Chairman, our servicemembers deserve the very best that
    we can give them, and I hope that this subcommittee will
    restore cuts to defense S&T funding and, in particular, the
    human-centered research budget. Thank you. I would be happy to
    answer any questions.
        [The statement follows:]

                 Prepared Statement of Christopher Sager, Ph.D.

        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. Christopher
    Sager from the Human Resources Research Organization. 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 the fiscal year
    2005 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
        The President's budget request for basic and applied research at
    DOD in fiscal year 2005 is $10.55 billion, a 12.7 percent decrease from
    the enacted fiscal year 2004 level. 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 $12.05 billion for 6.1, 6.2 and 6.3 level research in fiscal
    year 2005. 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 Iraq and Afghanistan 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 $12.05 billion in fiscal year 2005 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.''
        Despite the critical need for strong research in this area, the
    Administration has proposed an fiscal year 2005 defense budget that
    would slash funding for human-centered research by 12 percent. Army,
    Navy and Air Force basic behavioral research would remain essentially
    flat in fiscal year 2005, and both the Air Force and Army would sustain
    deep, detrimental cuts to their applied behavioral research programs.
    APA urges the Committee to, at a minimum, restore funding for human-
    centered research at the fiscal year 2004 level of $477.89 million.
        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 would decrease from $477.89 million
    appropriated in fiscal year 2004 to $421.29 million in the
    Administration's fiscal year 2005 budget, a 12 percent cut. 6.2 level
    applied behavioral research in particular would suffer dramatically
    under the Administration plan. The Air Force's 6.2 program would be cut
    by 19.7 percent, the Army's would be cut by 35 percent, and the Office
    of the Secretary Defense (OSD) program would be cut by 31.3 percent
    (the Navy's program would see a small decrease). In terms of 6.3 level
    research, the Air Force would suffer a 23.4 percent cut and OSD would
    see a 20 percent cut in fiscal year 2005. Basic, 6.1 level human-
    centered research would remain essentially flat as it has for several
    years now.
        Behavioral and cognitive research programs eliminated from the
    mission labs due to cuts or flat funding 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 dramatic, detrimental 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 Stevens. Well, we will look into that cut. It is
    sort of a different type of reduction. We do not have any
    support for it yet, but we will inquire into it.
        Senator Inouye.
        Senator Inouye. Mr. Chairman, recently our attention has
    been focused on prisoner abuse. Would your studies have been
    able to detect flaws in one's character?
        Dr. Sager. Senator Inouye, that is an excellent question. A
    lot of the research I am personally involved with has to do
    with the personal characteristics required of enlisted soldiers
    in the Army. Among those are measures of conscientiousness and
    other psychological constructs that are very important to that.
    Yes, I think they would contribute to predicting problems and
    preventing problems in that area. However, research in that
    domain is very difficult and the Army is setting the standards
    in a lot of ways in that domain.
        Senator Inouye. Thank you. Thank you, Mr. Chairman.
        Senator Stevens. Thank you very much. We appreciate your
    testimony.
        Our next witness is Kenneth Galloway, the Dean of
    Vanderbilt University, appearing for the Association of
    American Universities (AAU). Good morning, Dean.

    STATEMENT OF KENNETH F. GALLOWAY, DEAN, SCHOOL OF
                ENGINEERING, AND PROFESSOR OF ELECTRICAL
                ENGINEERING, VANDERBILT UNIVERSITY ON
                BEHALF OF THE ASSOCIATION OF AMERICAN
                UNIVERSITIES
        Dr. Galloway. Good morning. Mr. Chairman, Senator Inouye, I
    am Kenneth F. Galloway, Dean of the School of Engineering and
    Professor of Electrical Engineering at Vanderbilt University. I
    appear before you today on behalf of the Association of
    American Universities which represents 60 of America's most
    prominent public and private research universities. I have
    submitted a statement for the record and will briefly summarize
    the key points.
        I greatly appreciate this opportunity to testify in support
    of basic research and applied research funded in the research,
    development, testing, and evaluation section of the defense
    appropriations bill. I would like to thank Chairman Stevens,
    Ranking Member Inouye, and the members of the subcommittee for
    your past support of defense science and technology programs
    and specifically for basic and applied research sponsored by
    DOD and conducted at our Nation's universities. Your ongoing
    support of these programs is greatly appreciated.
        As the subcommittee begins work on the 2005 defense
    appropriations bill, the AAU offers the subcommittee two major
    recommendations.
        The first recommendation is that the committee support
    defense S&T at a level equal to 3 percent of the total defense
    budget. This has been recommended by both the Defense Science
    Board and the Quadrennial Defense Review. The core S&T programs
    include basic, applied, and advanced technology development,
    the 6.1 and 6.2 and 6.3 items. These investments are important
    to ensuring the technological superiority of America's military
    forces.
        The second recommendation addresses strengthening support
    of basic research. Today that support has declined to less than
    12 percent of DOD S&T funding. This has occurred as DOD has
    shifted some of its focus from support of fundamental, long-
    range research to meeting more immediate, short-term defense
    objectives.
        In the early 1980's the basic research portion was nearly
    20 percent of total defense S&T. The AAU supports increasing
    the competitively awarded defense research sciences and
    university research initiative program elements in 2005 by $95
    million. The association also endorses continued growth and
    applied research at the 4.6 percent rate approved by Congress
    last year.
        Now, why do we think these recommendations are important?
    DOD-funded research at universities is concentrated in fields
    where advances are most likely to contribute to national
    defense. DOD accounts for 68 percent of Federal funding for
    university research in electrical engineering, 32 percent for
    computer sciences, 50 percent for material science and
    engineering, more than 50 percent for mechanical engineering,
    and 29 percent for ocean sciences. Additionally, DOD provides a
    significant amount of support for graduate students in critical
    defense fields.
        Examples of technologies in use today that have benefitted
    from university-based research include the global positioning
    system, GPS; the thermobaric bomb, or bunker buster; laser
    targeting systems that give us precision weapons; lightweight
    body armor; radar-evading materials, the internet; night vision
    and thermal imaging; unmanned aerial vehicle control; bio and
    chemical sensors. DOD investments in basic and applied research
    made these technologies available to the warfighter today.
        Many research efforts underway at universities and national
    laboratories around the country will lead to development of new
    technologies that will ensure our Nation's military superiority
    tomorrow.
        To conclude, the Nation must not sell short tomorrow's
    warfighters by undercutting research today. The AAU urges the
    subcommittee to strongly support the basic and applied science
    behind the best fighting force in the world.
        Again, I would like to thank the subcommittee for continued
    support of the Department of Defense research and urge members
    to sustain and grow the S&T programs that make such an
    important contribution to our national security. Thank you very
    much.
        [The statement follows:]

                   Prepared Statement of Kenneth F. Galloway

        Mr. Chairman and members of the subcommittee: I am Kenneth F.
    Galloway, Dean of the School of Engineering and Professor of Electrical
    Engineering at Vanderbilt University. I appear before you today on
    behalf of the Association of American Universities, which represents 60
    of America's most prominent public and private research universities in
    the United States.
        I greatly appreciate this opportunity to testify today in support
    of basic research (6.1) and applied research (6.2) funded in the
    Research, Development, Testing and Evaluation (RDT&E) section of the
    Department of Defense (DOD) appropriations bill. I would also like to
    thank Chairman Stevens, Ranking Member Inouye, and the members of the
    subcommittee for past support of Defense Science and Technology (S&T)
    programs and specifically for basic and applied research sponsored by
    DOD and conducted at our nation's universities. Your ongoing support of
    these programs is recognized and greatly appreciated.
        As the subcommittee begins its work on the fiscal year 2005 defense
    appropriations bill, the AAU offers the subcommittee two major
    recommendations.
        Support Defense S&T at 3 percent of the total defense budget.--AAU
    supports recommendations by the Defense Science Board (1998) and the
    Quadrennial Defense Review (2001) to devote 3 percent of the DOD budget
    to core S&T programs. The core S&T programs include basic (6.1) and
    applied (6.2) research and advanced technology development (6.3) in the
    Army, Navy, Air Force, and Defense-Wide accounts. These investments are
    key to ensuring the future safety and technological superiority of
    America's military forces.
        Strengthen support of basic research.--In the early 1980's, basic
    research accounted for nearly 20 percent of total defense S&T funding.
    Today, that support has declined to less than 12 percent, as DOD has
    shifted some of its focus from support of fundamental, long-term
    research to meeting more immediate and short-term defense objectives.
        To begin to restore basic research funding to its effective
    historic levels, AAU supports increasing the competitively awarded
    Defense Research Sciences and University Research Initiative program
    elements in fiscal year 2005 by $95 million. The association also
    endorses continued growth in applied research at the 4.6 percent rate
    approved by Congress last year, which would be an increase of
    approximately $205 million.

    Why defense research is important to universities (and universities are
            important to defense research)
        DOD is the third largest federal sponsor of university-based
    research after the National Institutes of Health and the National
    Science Foundation. More than 300 universities and colleges conduct
    DOD-funded research and development. Universities receive more than 54
    percent of defense basic research funding and a substantial portion of
    defense applied research support.
        DOD funded research to universities is concentrated in fields where
    advances are most likely to contribute to national defense. DOD
    accounts for 68 percent of federal funding for university electrical
    engineering, 32 percent for computer sciences, 50 percent for
    metallurgy and materials engineering, and 29 percent for ocean
    sciences. 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.

    Why investing in DOD research is important to the nation
        If we do not invest adequately in DOD research, we will delay or
    even prevent the development of technologies that would provide
    critical protection to our future warfighters and make them more
    effective in the field. We need only look at how past knowledge and
    discoveries generated at U.S. universities have made major
    contributions to the nation's defense efforts. Examples of technologies
    used by troops today include the following.
      --The Global Positioning System (GPS) is one of the greatest assets
            to the modern warfighter. GPS provides a precision of location
            that was unimaginable decades ago, enabling military leaders to
            pinpoint targets in a way that increases lethality and
            minimizes collateral damage. The system also enables commanders
            to know the precise location in the field of their human and
            material assets. This crucial battlefield resource was
            developed from fundamental physics research in atomic clocks.
      --The Thermobaric Bomb, or the ``bunker buster,'' has been used in
            recent military campaigns in Afghanistan and Iraq. The new
            technology was transformed from a laboratory concept to an
            operational battlefield technology in less than three months.
            As Rear Admiral Jay Cohen of the Office of Naval Research noted
            in his statement for a hearing of the Senate Emerging Threats
            and Capabilities Subcommittee in April, 2002: ``Such speed was
            possible because the science was done before the need became
            urgent.''
      --The ability of today's soldiers to fight in urban environments has
            been profoundly increased by the use of lightweight and easily
            deployed laser targeting systems. Troops today can discreetly
            and precisely target a location, providing a critical
            capability for increasingly frequent urban conflicts. Decades
            ago, military research offices supported the fundamental
            research that led to the development of the laser.
      --Lightweight Body Armor, a new technology developed for the
            Department of Defense, can stop 30-caliber armor piercing
            bullets yet has an aerial density of only 3.5 pounds per square
            foot. To make the new self-adjusting reinforced helmets and
            body armor, which can be tailored to fit the mission,
            researchers used a new boron-carbide ceramic plate that weighs
            10 to 30 percent less than conventional armor and delivers
            equal or greater protection.
        There are many other examples of discoveries and technologies made
    possible through university-based defense basic research:
      --THE INTERNET started as ARPANET, which connected major universities
            through the world's first packet-switched network. This
            technology translated into a robust communications network
            designed to protect the nation in the event of full attack.
      --NIGHT VISION and thermal imaging technology make it possible for
            the U.S. Army to use forward-looking infrared detectors to spot
            enemy forces and roll into combat in pitch-blackness.
      --UNMANNED AERIAL VEHICLES enable the warfighter to effectively and
            affordably suppress enemy air defenses and conduct surveillance
            missions without placing pilots at risk. University researchers
            recently executed the most complex maneuver ever performed by
            an unpiloted helicopter. This breakthrough could provide a new
            tool for military reconnaissance and weapons delivery in
            challenging terrains such as mountainous and urban areas.
      --BIO-SENSORS detect the presence of a biological or chemical agent.
            University researchers helped design a sensor that can
            determine the presence of anthrax spores, enabling officials to
            differentiate quickly between hoaxes and real threats.
        Many research projects underway at universities and national labs
    around the country will lead to development of new technologies to
    ensure the nation's military superiority in the future. For example, at
    Vanderbilt University, our AFOSR-supported research on Survivable
    Electronics for Space and Defense Systems is leading to more resilient
    microelectronic devices to be used in defense systems. These devices
    are susceptible to damage and mission failure from radiation emanating
    from a variety of sources. Vanderbilt research will enable electronics
    designers to develop more reliable systems for defense applications and
    to deploy more advanced technologies in challenging radiation
    environments.
        Another example of Vanderbilt research, sponsored by DARPA funding,
    is the Monopropellant-Powered Actuation for a Powered Exoskeleton
    Project. Vanderbilt researchers are developing a lightweight system to
    power and control a wearable structure that will enable warfighters to
    carry up to 300 pounds for 12 hours. This power system uses high-
    intensity hydrogen peroxide to deliver many times more power than
    batteries, at manageable temperatures, with completely benign emissions
    of water and oxygen.
        Other examples of DOD sponsored research occurring at other
    universities around the county include:
      --Semiconductors--The United States has been able to capitalize on
            increased computing capacity to provide an economic and
            military edge over other countries. But the U.S. computer-chip
            industry is quickly approaching the physical limits of the
            chip-making process. Without major research advances, the
            semiconductor industry's ability to sustain the pace of
            innovation could come to a halt in 10-15 years.
      --Nanotechnology research promises both miniaturization of existing
            equipment and the potential for new materials, properties, and
            devices. Much of the current research is focused on improving
            the survival and comfort of soldiers. The 140-pound pack and
            cotton fatigues worn by infantry today could be transformed
            into a lightweight battlesuit able to protect the warfighter
            from enemy and environmental threats. At the same time, these
            suits could monitor health, help treat injuries, enable
            communications, and enhance performance.
      --Explosives Detection Devices are an example of basic research
            efforts where additional investments are still needed. Nuclear
            quadropole resonance (NQR) technology detects and identifies
            specific molecules, such as nitrogen, in explosives. The
            technology has been adapted to detect landmines, roadside
            explosives, and terrorist bombs in such places as Bosnia and
            Iraq. But more research is needed to further transform and
            refine the military's traditional explosive detection systems.
      --Self-Healing Technology research addresses medical limitations on
            the battlefield, including a lack of supplies, diagnostic and
            life-support equipment, and time for treatment. Research
            efforts underway will accelerate healing time and reduce
            casualties.

                                   CONCLUSION

        The nation must not sell short tomorrow's warfighters by
    undercutting research today. AAU urges the subcommittee to strongly
    support the basic and applied science behind the best fighting force in
    the world.
        Again, I would like to thank the subcommittee for its continued
    support of Department of Defense research and urge members to sustain
    and grow the S&T programs that make such an important contribution to
    our national security.

        Senator Stevens. Well, Dean, you raise an interesting
    conundrum because very clearly we have some systems coming on
    that we will have to postpone if we do not cut other places. We
    have the F-22, the V-22, Stryker, the Joint Strike Fighter. I
    think you make a good point, but on the other hand, none of the
    research you are talking about will be available by the time we
    either win or lose completely the war on terrorism in the
    Middle East. So I think you have requested a very difficult
    thing from us. The decision to defer basic research and instead
    apply the funding to moving new equipment like the armored high
    mobility multi-purpose wheeled vehicle (HMMWV), et cetera is a
    very clear decision Congress has already made. But we will look
    at your request.
        Dr. Galloway. I understand it is a very difficult time.
        Senator Stevens. It is difficult.
        Senator Inouye.
        Senator Inouye. The military has done well in developing
    body armor technology, and as a result, comparatively there are
    very few thoracic injuries. But we have an overabundance of
    amputations of all limbs, plus head injuries. Are you
    researching anything that would cover arms, legs, heads?
        Dr. Galloway. Senator, I am not aware of that work, but I
    will look into that and find you a reply.
        Senator Inouye. Thank you, sir.
        Senator Stevens. The Senator is correct. We noticed just an
    overwhelming change in the type of injuries that our people are
    coming home with. They are coming home, but they are coming
    home minus a lot of limbs and real serious head injuries, eye
    injuries. We have got to develop a better protection overall
    for our people. That type of basic research certainly would
    support.
        Thank you very much, Dean.
        Dr. Galloway. Thank you.
        Senator Stevens. We will now turn to Master Chief Joseph
    Barnes, United States Navy. He appears as the National
    Executive Secretary for the Fleet Reserve Association. Good
    morning, Chief.

    STATEMENT OF MASTER CHIEF JOSEPH L. BARNES, USN (RET.),
                NATIONAL EXECUTIVE SECRETARY, FLEET RESERVE
                ASSOCIATION
        Mr. Barnes. Good morning, Mr. Chairman. Mr. Chairman,
    Senator Inouye, and other distinguished members of the
    subcommittee, the Fleet Reserve Association (FRA) appreciates
    the opportunity to present its views on the 2005 defense
    budget. My name is Joe Barnes. I am the National Executive
    Secretary for the Fleet Reserve Association and also co-chair
    of the Military Coalition's Personnel Committee.
        Before I address several priority issues, I want to thank
    this distinguished subcommittee for its leadership, support,
    and strong commitment to important quality of life programs
    benefitting servicemembers, reservists, military retirees and
    their families.
        FRA strongly recommends full funding for the defense health
    program and adequate appropriations to continue revitalizing
    the TRICARE Standard program. The association also believes
    TRICARE should be available for all reservists and their
    families on a cost-sharing basis. When finally implemented, the
    temporary Reserve health care program will provide coverage
    only through December 2004 for reservists who are unemployed or
    do not have employer-sponsored health care. FRA urges
    appropriations to make this program permanent and that it
    become the basis for a broader program for all reservists.
        FRA also supports appropriations necessary to implement the
    3.5 percent across-the-board increase on January 1, 2005.
        The association also strongly supports continued progress
    toward closing the military pay gap. Unfortunately, DOD's
    proposal for targeted pay increases for senior enlisted
    personnel and certain officer grades were not included in the
    administration's budget request. At a minimum, FRA supports
    funding pay increases at least comparable to the annual
    employment cost index.
        Adequate service end strengths are important to maintaining
    readiness. If force size is inadequate and OPTEMPO too heavy,
    the performance of individual servicemembers is affected. FRA
    believes that there are inadequate numbers of uniformed
    personnel to sustain the war effort and other operational
    commitments. This situation also creates considerable stress on
    the families of service personnel. It appears that DOD is very
    concerned with the cost of personnel, to the extent that it is
    reluctant to increase service end strengths.
        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 was instrumental in the
    enactment of this program in the early 1970's and strongly
    supports reform legislation to increase the annuity and funding
    the program at the intended 40 percent level rather than the
    current level of approximately 19 percent.
        When authorized, FRA supports funding for full concurrent
    receipt of military retired pay and VA disability compensation,
    increased Reserve Montgomery G.I. Bill (MGIB) education
    benefits which are currently funded well below the authorized
    level, funding for family awareness and support and spouse
    employment opportunities, which are integral to the well-being
    and retention of the active and Reserve servicemembers, 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 continuing
    opposition to privatization.
        Finally, FRA advocates retention of the full, final months
    retired pay by the retiree's surviving spouse and the extension
    of the dislocation allowance to retiring servicemembers.
        If authorized, the association asks for your support for
    these proposals which have also been endorsed by the Military
    Coalition. Thank you again, Mr. Chairman, for the opportunity
    to present the association's recommendations for fiscal year
    2005.
        Senator Stevens. Thank you very much, Chief. That is a long
    list. Some of us who have been around for a while understand
    continuing to pay into a retirement fund, but that has been
    tried before. It has really not been accepted by Congress so
    far.
        Senator Inouye.
        Senator Inouye. Well, Mr. Chairman, we all recognize the
    heavy reliance upon Reserves and Guards in this war, so I can
    assure you that we are looking at this very carefully.
        Mr. Barnes. Thank you, Senator.
        Senator Stevens. Thank you very much, Chief.
        [The statement follows:]

              Prepared Statement of Master Chief Joseph L. Barnes

                                  INTRODUCTION

        Mr. Chairman and other distinguished Members of the Subcommittee:
    The Fleet Reserve Association (FRA) is grateful for the opportunity to
    present its military personnel goals for fiscal year 2005. Before
    continuing, I want to express deep appreciation on behalf of the
    Association's membership for the quality of life improvements
    implemented over the past few years for our Nation's men and women in
    the Uniformed Services. What this august group has done for our active
    duty, reserve, and retired service members is not only superlative but
    unusually generous for Congress in comparison with the previous two to
    three decades.
        In the active force, the plea is for increased funding to
    compensate for the arduous operational and personal tempos thrust upon
    the members of the uniformed services. Others prefer better housing,
    perhaps increased child-care programs, or any of the many programs and
    benefits available to them and their families. Reservists support
    enhanced retirement benefits, special pays, and increased MGIB
    proceeds. The retired community seeks funding for the Uniformed
    Services Survivor Benefit Plan (USSBP), full concurrent receipt of
    military retirement pay and VA service connected payments, and a
    reasonable access to health care services.

                             ACTIVE DUTY COMPONENT

        Pay.--Always number one in most surveys completed by FRA and the
    active forces is pay. This distinguished Subcommittee, alerted to this
    fact for the past six years, has improved compensation that, in turn,
    enhanced the recruitment and retention of uniformed personnel in an
    all-volunteer environment. Adequate and targeted pay increases for
    middle grade and senior petty and noncommissioned officers have
    contributed to improved morale and readiness. With a uniformed
    community that is more than 50 percent married, satisfactory
    compensation relieves much, if not all the tension brought on by
    operational and personal tempos.
        For fiscal year 2005, the Administration has recommended a 3.5
    percent across the board basic pay increase for members of the Armed
    Forces. This is commensurate with the 1999 formula to provide increases
    of 0.5 percentage points greater than that of the previous year for the
    private sector. With the addition of targeted raises, the formula has
    reduced the pay gap with the private sector from 13.5 percent to 5.2
    percent following the pay increase programmed for January 1, 2005.
        FRA, however, is disappointed that the Office of Management and
    Budget (OMB) is opposed to targeted pay increases for certain enlisted
    and officer pay grades. This in the face of the Defense Department's
    projected recommendation to affect targeted pays along the line of
    those authorized for fiscal year 2004. Targeting pay hikes for fiscal
    year 2005 and fiscal year 2006 will aide the Department's quest to
    increase basic pay for career personnel to equal those in the private
    sector earned by workers having similar education and experience
    levels.
        FRA urges the Subcommittee to fund the authorized pay increase for
    fiscal year 2005, and ensure that uniformed members of the Public
    Health Service (USPHS) are included in the pay increase.

                               RETIRED COMPONENT

        Survivor Benefit Plan.--FRA has experienced a greater concern for
    improving the Uniformed Services Survivor Benefit Program (USSBP) than
    any issue on its website (www.fra.org). With an average age of 68 on
    the Association's membership roll, the concern is justified. Most
    convincing is the need to revise the language in the current Plan to
    reduce the ``social security offset'' that penalizes annuitants at a
    time when the need is the greatest. Then there are the many members,
    age 70 and older, who have been paying into the Plan for more than 30
    years with the only relief more than four years into the future.
        Although Congress has adopted a time for USSBP participants to halt
    payments of premiums (when payments of premiums equal 30 years and the
    military retiree is 70 years of age) the date is more than four years
    away. Military retirees enrolling on the initial enrollment date (1972)
    will this September be paying premiums for 32 years, by 2008, thirty-
    six years.
        FRA recommends and urges the Subcommittee to provide funding for
    the restoration of the value of service members participating in the
    Uniformed Services Survivor Benefit Plan (USSBP) by increasing the
    survivor annuity over a ten-year period to 55 percent, and the date
    2008 to October 31, 2004 when certain participants attaining the age of
    70 and having made payment to the Plan for at least 30 years are no
    longer required to make such payments.
        Basic Allowance for Housing (BAH).--In concert with The Military
    Coalition, FRA supports revised housing standards that are more
    realistic and appropriate for each pay grade. Many enlisted personnel
    are unaware of the standards for their respective pay grade and assume
    they are entitled to a higher standard than authorized.
        FRA extends appreciation to the Subcommittee for acting a few years
    ago to reduce out-of-pocket housing expenses for service members.
    Responding to the Subcommittee's leadership on this issue, the
    Department of Defense proposed a similar 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 service members
    and families who are strapped in meeting rising housing and utility
    costs.
        The Association applauds the Subcommittee's action, and is in hope
    that this plan is funded for fiscal year 2005. Unfortunately, housing
    and utility costs will become more expensive, and the pay comparability
    gap, while diminished over recent years--thanks to the Subcommittee's
    leadership--continues to widen. Members residing off base face higher
    housing costs, along with significant transportation costs, and relief
    is especially important for junior enlisted personnel who do not
    qualify for other supplemental assistance.
        FRA urges the Subcommittee to provide the necessary appropriations
    to eliminate out-of-pocket housing expenses in fiscal year 2005.
        Basic Allowance for Subsistence (BAS).--FRA is grateful for the
    establishment of a food-cost-based standard for BAS and repealing the
    one percent cap on BAS increases. There is more to be done to permit
    single career enlisted members greater individual responsibility in
    their personal living arrangements. In this regard, the Association
    believes it is inconsistent to demand significant supervisory,
    leadership and management responsibilities of noncommissioned and petty
    officers, but still dictate to them where and when they must eat their
    meals while at their home duty station.
        FRA urges the Subcommittee to fund the necessary appropriations to
    repeal the statutory provision limiting BAS eligibility to 12 percent
    of single members residing in government quarters.
        Force Size/Readiness/OPTEMPO/PERSTEMPO.--Force size, readiness,
    OPTEMPO, and PERSTEMPO should be addressed simultaneously. Readiness
    cannot be achieved at the high level demanded if force size is
    inadequate in numbers, OPTEMPO is too heavy and PERSTEMPO is affecting
    the performance of individual service members. FRA believes that all
    are suffering due to a shortage of uniformed members. Once again, DOD
    apparently is so concerned with the cost of personnel that it is
    reluctant to increase manpower strengths when it's obvious to FRA and
    others there is a need for more troops. If DOD says there is no
    requirement for more troops than authorized, then why did three of the
    military services recently issued stop-loss orders to many of their
    uniformed personnel? ``It reflects the fact that the military is too
    small,'' says Charles Moskos, a leading military sociologist, ``which
    nobody wants to admit.''
        The Department played an integral role in having Congress give
    birth to the All-Volunteer Force. As such, it must stay the course
    realizing that people who volunteer to lay down their lives and limbs
    will not do so at the same level of compensation offered their
    predecessors of the WWII-Vietnam era. Today 50 percent or more of our
    military personnel are married and have families. It costs money to
    enfold these families under the military's social umbrella. If the
    United States desires an all-volunteer armed force, it will have to pay
    the price. Paying the price will allow the Department to increase the
    size of its uniformed force in order to relieve the pressure of lengthy
    deployments, long hours on duty, and family concerns, each having its
    own negative effect on readiness. One service chief stated that he
    would spend every dollar available to ``modernize'' his service (how
    many years now?), but not one cent more for people. Such a statement
    seems incredible when one knows historically that final victory is in
    the hands of the people.
        FRA recommends that the military services be afforded the
    opportunity to determine the size of its forces and the number of
    personnel necessary to perform the mission. However, when it appears
    that an increase is captive to the choice of more weapons systems over
    manpower, Congress should appropriate adequate funds to add more
    uniformed numbers to the strength of the armed forces.
        Impact Aid.--FRA is most appreciative for the Impact Aid authorized
    in previous Defense measures but must urge this Subcommittee and its
    full Committee to support a substantial increase in the funding for
    schools bearing the responsibility of educating the children of
    military personnel and federal employees. Current funds are not
    adequate to ably support the education of federally sponsored children
    attending civilian community elementary schools. Over the years,
    beginning with the Nixon Administration, funding for Impact Aid has
    decreased dramatically. For example, in the current fiscal year the
    Military Impacted Schools Association (MISA) estimates Impact Aid is
    funded at only 60 percent of need according to law. Our children should
    not be denied the best in educational opportunities. Impact Aid
    provides a quality education to the children of our Sailors, Marines,
    Coast Guardsmen, Soldiers, and Airmen.
        FRA implores Congress to accept the responsibility of fully funding
    the military Impact Aid program. It is more important now to ensure our
    service members, many serving in harm's way, they have little to
    concern with their children's future but more to do with the job at
    hand.
        Dislocation Allowance (DLA).--Moving households on government
    orders can be costly. Throughout a military career, service members
    endure a number of permanent changes of station (PCS). Too often each
    move requires additional expenses for relocating to a new area far
    removed from the service members' current location.
        Odd as it may appear, service members preparing to retire from the
    Armed Forces 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. Retiring military personnel after completing 20
    years of service is advantageous to the Armed Forces. It opens the
    ranks to much younger and healthier accessions.
        FRA recommends appropriating funds for 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 of 50 or more
    miles.
        MGIB-SR.--The Selected 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 past October 1,
    the rate fell to 27 percent of the Chapter 30 benefits. While the
    allowance has inched up by only 7 percent since its inception, the cost
    of education has climbed significantly.
        FRA stands four square in support of the Nation's Reservists. To
    provide an incentive for young citizens to enlist and remain in the
    Reserves, FRA recommends to Congress the pressing need to enhance the
    MGIB-SR rates for those who choose to participate in the program.
        Concurrent Receipt.--The fiscal year 2003 National Defense
    Authorization Act (NDAA) authorizes a special compensation that
    establishes a beachhead to authorizing full concurrent receipt, a term
    for the payment of both military non-disability retired pay and any VA
    compensation for service-connected disabilities without a reduction in
    one or the other payment. The fiscal year 2004 NDAA expanded the
    beneficiary list to include those retired service members with at least
    a 50 percent compensatory service-connected disability. Although FRA is
    appreciative of the effort of Congress to address the issue, it fails
    to meet the resolution adopted by the Association's membership to seek
    full compensation for both length-in-service military retirement and VA
    compensation. Currently, the receipt of VA compensation causes a like
    reduction to a retired service member's military retired pay. This
    leads to the belief, and well-deserved, that retired service members,
    earning retired pay as a result of 20 years or more of service, are
    forced to pay for their own disablement.
        Most disabilities are recognized after the service member retires.
    Some are discovered while the member is still performing active duty or
    as the result of a retirement physical. However, it is to the benefit
    of the Department of Defense to retire the member without compensation
    for any disability. Instead, the member is directed to the Department
    of Veterans' Affairs for compensatory relief for the damages incurred
    by the member while serving the Nation in uniform.
        FRA encourages Congress to take the helm and fully fund concurrent
    receipt of military non-disabled retirement pay and veterans'
    compensation program as currently offered in S. 392 introduced by
    Senator Harry Reid (Nev.). Congress should remember that U.S. service
    members, more so than any collective group, not only had a major hand
    in the creation of this Nation, but have contributed for more than 227
    years to the military and economic power of the United States.
        Cost of Living Adjustments (COLA).--Recent threats to curtail or
    halt cost of living adjustments (COLAs) have been lobbed in the
    direction of military retired pay and related payments such as survivor
    benefit annuities. Once again, Congress is urged to keep its promise
    that military retired pay will maintain its purchasing power based on
    increases in the Consumer Price Index (CPI).
        One must recall that the wisdom of Congress initiated the COLA
    program in lieu of the ``re-computation'' system. Re-computation was a
    term used to describe adjustments to military retired pay prior to the
    1970s. Military retirees received retirement pay adjustments each time
    active duty pay was increased. This system guaranteed the service
    member if he/she retired at a certain percentage of active duty pay,
    that pay would maintain the same percentage factor to active duty pay
    throughout retirement. In 1963, Congress--concerned with a heightened
    number of retired WWII members on the retired roll--decided to switch
    to the CPI method.
        Conversely, COLA protection is the paramount reason military
    retirees make an irrevocable decision to elect significant reductions
    in retired pay to provide surviving spouses and children with an
    annuity following the retiree's death. The most compelling reason for
    the decision is that the guaranteed inflation protection made the
    Uniformed Services Survivor Benefit Plan (USSBP) a superior alternative
    to life insurance policies. The sequestration of COLA funds violate
    that guarantee and greatly diminishes the value of the USSBP.
        FRA recommends that Congress--if it reduces the fiscal year 2005
    budget--not target military and federal retirees' retirement pay. Such
    action is discriminating and contrary to the promise made by Congress
    to maintain the purchasing power of military retirement pay. Full
    funding for the Defense Health Budget: Once again, a top FRA priority
    is to work with Congress and DOD to ensure full funding of the Defense
    Health Budget to meet readiness needs--including Graduate Medical
    Education (GME) and continuing education, full funding of both direct
    care and purchased care sectors, providing access to the military
    health care system for all uniformed services beneficiaries, regardless
    of age, status or location. A fully funded health care benefit is
    critical to readiness and the retention of qualified uniformed service
    personnel.
        FRA is concerned with reports from the Services that the current
    funding level falls short of what is required to meet current
    obligations and that additional supplemental funding will once again be
    required. For example, the association has encountered several
    instances in which local hospital commanders at Malcom Grove Medical
    Center, Andrew Air Force Base, Md. Dewitt Army Medical Center,
    Arlington, Va., Bethesda Naval Medical Center, Bethesda, Md., have
    terminated service for retired beneficiaries, citing budget shortfalls
    as the reason. Health care requirements for members returning from Iraq
    are also expected to strain the military delivery system in ways that
    are not anticipated in the budgeting process.
        Similarly, implementation of the TRICARE Standard requirements in
    fiscal year 2003 Defense Authorization Act--particularly those
    requiring actions to attract more TRICARE providers will certainly
    require additional resources that appear not to be in the current
    budget request.
        The FRA strongly recommends the Subcommittee continue to ensure
    full funding of the Defense Health Program, to include military medical
    readiness, needed TRICARE Standard improvements, and the DOD peacetime
    health care mission. It is critical that the Defense Health Budget be
    sufficient to secure increased numbers of providers needed to ensure
    access for TRICARE beneficiaries in all parts of the country.
        Pharmacy Cost Shares for Retirees.--In 2003, the Office of
    Management and Budget (OMB) and the Defense Department considered a
    budget proposal that envisioned significant increases in retiree cost
    shares for the TRICARE pharmacy benefit, and initiating retiree copays
    for drugs obtained in the direct care system. While the proposal was
    put on hold for this fiscal year, FRA is concerned that DOD is
    undertaking a review that almost certainly will recommend retiree copay
    increases in fiscal year 2006.
        Thanks to the efforts of this Subcommittee, it was less than three
    years ago that Congress authorized the TRICARE Senior Pharmacy Program
    (TSRx). DOD established $3 and $9 copays for all beneficiaries. Defense
    leaders highlighted this at the time as ``delivering the health
    benefits military beneficiaries earned and deserve.'' But the Pentagon
    already has changed the rules and will remove many drugs from the
    uniform formulary and raise the copay on such drugs to $22.
        The FRA vigorously opposes increasing retiree cost shares that were
    only recently established. Congress' recent restoration of retiree
    pharmacy benefits helped restore active duty and retired members' faith
    that their government's health care promises would be kept. If
    implemented, this proposal would undermine that trust, which in the
    long term, can only have adverse affects on retention and readiness.
        The FRA urges the Subcommittee to continue to reject imposition of
    cost shares in military pharmacies and oppose increasing other pharmacy
    cost shares that were recently established.
        Healthcare for Members of the National Guard and Reserve.--The FRA
    is grateful to this Subcommittee for ensuring that the Temporary
    Reserve Health Care Program was included in the fiscal year 2004
    National Defense Authorization Act. This program will provide coverage,
    through December 2004, for National Guard and Reserve members who are
    unemployed or do not have employer-sponsored health care coverage.
    TRICARE officials plan to build on existing TRICARE mechanisms to
    expedite implementation; however, no one is certain how long this will
    take. Immediate implementation is required, and a permanent program
    must be established.
        Health insurance coverage varies widely for members of the Guard
    and Reserve: 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 ``kicks in'' at 30 days activation, many Guard and
    Reserve families would prefer continuity of care through doctors and
    their own health insurance. Being dropped from private sector coverage
    as a consequence of extended activation adversely affects family morale
    and military readiness and discourages some from reenlisting. Many
    Guard and Reserve families live in locations where it is difficult or
    impossible to find providers who will accept new TRICARE patients. The
    FRA urges the authority for federal payment of civilian health care
    premiums (up to the TRICARE limit) for dependents of mobilized service
    members.
        Dental readiness is another important aspect of readiness for Guard
    and Reserve personnel. Currently, DOD offers a dental program to
    Selected Reserve members and their families. During the recent
    mobilization, soldiers with repairable dental problems were having
    teeth extracted at mobilization stations in the interests of time and
    money instead of having the proper dental care administered earlier.
    Congress responded by passing legislation that allows DOD to provide
    medical and dental screening for Selected Reserve members who are
    assigned to a unit that has been alerted for mobilization in support of
    an operational mission, contingency operation, national emergency, or
    war. During the initial mobilization for Operation Iraqi Freedom, the
    average time from alert to mobilization was less than 14 days, not
    sufficient time to improve dental readiness. In some cases, units were
    mobilized before receiving their alert orders. This lack of notice for
    mobilization continues, with many reservists receiving only days of
    notice before mobilizing.
        The TRICARE Dental Plan benefits should be expanded for Guard and
    Reserve service member. This would allow all National Guard and Reserve
    members to maintain dental readiness and alleviate the need for dental
    care during training or mobilization.
        The FRA urges: making the Temporary Reserve Health Care Program
    permanent and expanding coverage to all members of the National Guard
    and Reserve Component and their families on a cost-sharing basis;
    allowing federal payment of civilian health care premiums for the
    families of deployed reservists who choose to keep their civilian
    healthcare; and expansion of the TRICARE Dental Plan for National Guard
    and Reserve service members in order to ensure medical readiness and
    provide continuity of coverage to members of the Selected Reserve.
                                   conclusion
        FRA is grateful for the opportunity to present its goals for fiscal
    year 2005. If there are questions or a need for further information,
    please call Bob Washington, FRA Director of Legislative Programs, at
    703-683-1400.

    STATEMENT OF ARTHUR B. BAGGEROER, MASSACHUSETTS
                INSTITUTE OF TECHNOLOGY ON BEHALF OF THE
                CONSORTIUM FOR OCEANOGRAPHIC RESEARCH AND
                EDUCATION
        Senator Stevens. Our next witness is Arthur Baggeroer. Is
    that right? Is that close enough? He is from the Massachusetts
    Institute of Technology (MIT) and the Consortium for
    Oceanographic Research and Education. Good morning, sir.
        Dr. Baggeroer. Thank you, Senator. Chairman Stevens,
    Senator Inouye, 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
    Navy. My name is Arthur Baggeroer, and I appear on behalf of
    the 76 members of the Consortium on Oceanographic Research,
    which does include the University of Alaska and Hawaii and is
    commonly called CORE.
        I am Ford Professor of Engineering at MIT and one of the
    Secretary of the Navy (SECNAV) Chief of Naval Operations (CNO)
    Chairs for Ocean Science in the Departments of Ocean and
    Electrical Engineering at MIT.
        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. America's oceanographers were and
    continue to be active partners with the Office of Naval
    Research in providing today and tomorrow's sailors and marines
    with the tools necessary to continue to be the finest
    warfighters in the world. However, when we look to the coming
    decades, we are deeply concerned that the Navy's robust support
    for high-risk basic research is deteriorating.
        Bold, high-risk, cutting-edge basic research has been a
    crucial component of the Navy's battlespace superiority for
    many decades. It is easy to enumerate a very long list. Much of
    the research conducted decades ago deployed in the fleet today
    was once high-risk and cutting-edge. None of the researchers
    could have imagined its application in Iraq or Afghanistan. It
    was not focused on specific applications. But without it and
    without the support that made it possible, our soldiers,
    sailors, airmen, and marines would not have had the
    technological edge they enjoy on the battlefield.
        I am sure that you are aware of the global war on terrorism
    is presenting the Navy with new and challenging threats. The
    threats must be addressed by robust support for science and
    technology.
        There are a number of scientific challenges I outlined in
    my written testimony, but I want to take a few moments to
    discuss the threats posed by a couple, the proliferation of
    quiet diesel and electric air independent propulsion submarines
    in littoral operations.
        These vessels or submarines are being purchased by many
    states, the most prevalent being the Russian Kilo 4 class of
    acquired by China and Iran and the German 200 series. These
    boats are as quiet as a modern nuclear class submarine. While
    limited in endurance and speed, they are clearly useful near
    the coastal waters of a country for anti-surface warfare and
    ASW and present a significant threat and challenge. The input
    of basic oceanography, unmanned undersea vehicles and novel
    communications are part of the paradigm for detecting,
    tracking, and localizing these boats. While some of these
    components may emerge as incremental improvements to existing
    ones, the Navy now needs bold technologies to survey in near
    real time the ocean environment, as well as fixed acoustic
    systems to maintain persistent monitoring of important
    operational regions. Enabling these innovations for use by
    future officers are now part of the Office of Naval Research
    (ONR) charter. Reduced commitments to this basic research now
    just mortgages the future for combatting this threat.
        I would also like to note that it is crucial for the Navy
    to maintain a vigorous scientific research program to enhance
    its mine countermeasures in littoral operations.
        Finally, as operations increase in the littorals and the
    adjacent shelves, it is vital that the Navy support the science
    necessary to effectively characterize this region so the fleet
    can effectively operate.
        While basic research has served the warfighter, its
    prominence in the defense S&T portfolio has declined
    dramatically. It is no longer enjoying the robust support it
    did in decades past. In the early 1980's, basic research stood
    at over 17 percent of S&T funding. As we discussed earlier,
    significant payoffs were seen. Unfortunately, now basic
    research stands below 12 percent of the S&T funding. It is
    crucial that we ensure robust support of DOD S&T so that we
    have the capabilities to confront the challenges and threats of
    the future battlefield. It is toward this goal that the basic
    research should be and is directed but also with this goal in
    mind that all funding decisions should be made.
        Specifically, CORE recommends returning the basic research,
    or 6.1, to the end of cold war levels, 16 percent of S&T, by
    fiscal year 2009.
        The new resources associated with these increases should be
    directed to two basic research accounts where the majority of
    the competitively awarded funds are accessible: the university
    research initiative, URI, and the defense research science,
    DRS.
        Since the end of the cold war, basic research has paid its
    part of the peace dividend. As we enter another era of
    prolonged conflict, we strongly urge you to reenergize the
    Department's support for basic research.
        Thank you again for the opportunity to bring these
    important issues to your attention. I welcome the opportunity
    for any questions.
        [The statement follows:]

                   Prepared Statement of Arthur B. Baggeroer

        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 Navy.
        My name is Arthur B. Baggeroer and I appear of behalf of the 76
    member institutions of the Consortium for Oceanographic Research and
    Education, commonly referred to as CORE. I am the Ford Professor of
    Engineering and Secretary of the Navy/Chief of Naval Operations Chair
    for Ocean Science in the Departments of Ocean and Electrical
    Engineering at the Massachusetts Institute of Technology. Some of
    CORE's other members include Woods Hole Oceanographic Institution, 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. Our membership
    represents the nucleus of American academic oceanographic research.
        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 and tomorrow's
    sailors and marines with the tools necessary to continue 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 to the end of the Cold War and have provided the
    technology base for today's fleet. However, when we look to the coming
    decades, we are deeply concerned that the Navy's robust support is
    deteriorating.
        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 as the Internet and is the fundamental science behind the
    technology underlying net-centric warfare, an increasingly important
    asset to the Navy and Marine Corps.
        As you may know, basic research supported by the Navy led to the
    development of the laser. These discoveries led directly to the advent
    of small, easily handled lasers that allow soldiers, sailors, airmen
    and marines to precisely locate targets and provide coordinates for
    sailors and airmen to deliver munitions to targets.
        All of the underlying research for these systems was high-risk and
    cutting edge when it was conducted decades ago and none of the
    researchers could have imagined its application in Iraq or Afghanistan.
    It was not focused on specific applications. But without it and without
    the support that made it possible, our soldiers, sailors, airmen and
    marines would not have had the technological edge they enjoy on the
    battlefield.
        While the Cold War is thankfully an artifact of history, and many
    of the threats it posed to the Navy have receded, the Global War on
    Terrorism presents the Navy with a new and equally challenging suite of
    threats: threats that must be addressed by robust support for science
    and technology.
        Of particular concern to the Navy are the challenges of littoral
    warfare, the threats posed by submerged mines, and the proliferation of
    quiet diesel submarines. Academic oceanographers are working to help
    the Navy meet all these challenges.
        As you may be aware, sonar system performance in the littoral is
    extremely complex. Presently we cannot reliably predict transmission
    losses, a key component of the sonar equation, in these regions. The
    seabed dominates this problem leading to a ``range curtain''
    attenuating acoustic energy of threat submarines and limiting the
    Navy's detection and tracking capability.
        Better understanding of the geology and geoacoustics of the seabed
    are critical to the successful deployment of ships and sensors. Also
    complicating operations in the littoral is wave phenomena, more
    pronounced in the littoral, which limit sonar performance. Finally,
    ambient noise produced by high density fishing fleets and commerce lead
    to very cluttered displays of the local acoustic environment--
    complicating everything from ASW to the safe surfacing of a submarine.
    Clearly this is a complicated environment for the Navy to operate in.
    Addressing the uncertainties and challenges in this crucial environment
    will require a reinvigorated regime of academic oceanographic research.
        In addition to the challenges posed by littoral combat are the
    threats posed to the fleet by submerged mines. Mine countermeasures and
    clearance is a similarly complicated problem. Currently the Navy faces
    a situation where cheap mines, costing less than $1,000, can impede the
    operation of a battle group or access to a port. Currently, countries
    make mines that appear to be an ``acoustic rock,'' i.e. they have
    virtually all the physical attributes of a natural rock. Nevertheless,
    dolphins can identify the threats but no current technology can. The
    basic science of what are the distinguishing acoustical features of an
    actual rock and ``acoustic one'' are vital for routine mine
    countermeasures and clearance and prompt execution of Naval operations.
        Finally, the availability of modern diesel electric submarines is
    one of the greatest threats to Naval operations. These vessels are
    being purchased by many states, the most prevalent being the Russian
    Kilo 4 class acquired by China and Iran and the German 2xx classes.
    These boats are as quiet as a modern nuclear class submarine. While
    limited in endurance and speed, they are clearly useful near the
    coastal waters of a country. The ASW threat is a significant challenge
    and the input of basic oceanography, unmanned undersea vehicles (UUV's)
    and novel communications, are part of paradigm for detecting, tracking
    and localizing these boats. While some of these components may emerge
    as incremental improvements to existing ones, the Navy needs bold new
    technologies to survey in near real time in the ocean environment as
    well as fixed acoustic systems to maintain persistent monitoring of
    important operational regions. Enabling these innovations for use by
    future officers are part of ONR's charter. Reduced commitments to the
    basic research now needed just mortgages the future for combating this
    threat.
        These are all hard basic research issues, issues that will take
    time to solve, but issues that are essential to the safe and effective
    operation of the fleet.
        While basic research played a critical role in winning the Cold
    War, faithfully served the warfighter in Iraq and Afghanistan and
    unquestionably will play a critical role in the global war on
    terrorism, its prominence in the Defense S&T portfolio has declined
    dramatically with the end of the Cold War. It no longer enjoys the
    robust support it did in decades past.
        In the early 1980's basic research stood at over seventeen percent
    of S&T funding. As we discussed earlier, significant payoffs were seen.
    This era of robust support for basic research paid off in technologies
    such as UAVs (sea, air, land), thermobaric bombs, communications
    systems, materials used in protection vests and battlefield medicine
    advances.
        Unfortunately, basic research now stands at below 12 percent of S&T
    funding. Equally important funding levels have slipped below levels
    required to maintain the stability and the readiness of the future
    defense technical workforce and innovative military discoveries. It is
    crucial that we ensure robust support for DOD S&T so that we have the
    capabilities to confront the challenges and threats of the future
    battlefield. It is toward this goal that basic research should be, and
    is, directed. It is also with this goal in mind that all funding
    decisions should be made.
        Specifically, CORE recommends returning 6.1 (basic) research to end
    of Cold War levels (16 percent of S&T) by fiscal year 2009 and
    recommends establishment of measurements to link the research
    enterprise with the acquisition and requirements communities to ensure
    that additional resources are directed toward identified capability
    gaps.
        The new resources associated with these increases should be
    directed to two basic research accounts where the majority of the
    competitively-awarded funds are accessible: the University Research
    Initiative (URI) and Defense Research Sciences (DRS). Sixteen percent
    is not the high water mark for basic research in the S&T total, but a
    practical place to start in putting these programs on the path to
    recovery.
        Since the end of the Cold War, basic research has paid its part of
    the peace dividend. As we enter another era of prolonged conflict, we
    strongly urge you to reenergize the department's support for basic
    research.
        In addition to our concerns about the funding levels for basic
    research and S&T generally is the focus of research at the Office of
    Naval Research. We are concerned that pressures outside of ONR may be
    leading the office in a direction that departs from its traditional
    aggressive support for high-risk basic research. We are distressed that
    the 6.1 account, which is supposed to be discovery oriented basic
    research, is increasingly becoming short-term product-driven applied
    research. 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 discoveries, if we
    expect to have the scientific underpinnings for the pioneering
    innovations in the 6.2 and beyond programs.
        The essential contribution of basic science to the capabilities of
    the Navy After Next, is jeopardized by statements that the Navy's basic
    research program will be ``integrated with more applied S&T to promote
    transitions of discoveries.'' ``Integrat[ion] with more applied S&T''
    is could send the message that program managers and scientist should
    not focus on long term high-risk projects.
        RADM Jay Cohen, Chief of Naval Research, recently clearly outlined
    the importance of basic science to the warfighter. When asked how
    science serves the Navy he responded:

        In the 1970s, a researcher proposed an effort to measure time more
    accurately . . . by a couple of orders of magnitude. At the time, the
    Navy was skeptical about investing in measuring time; after all, the
    Navy has been the timekeeper of the nation with the atomic clock at the
    Naval Observatory in Washington, D.C. Well, when you can measure time
    more accurately, you know position more accurately. That is the basis
    for precision navigation. The debate went on for weeks, and the Navy
    anguished over whether it should make the investment. Well, from having
    made the decision to invest, today we enjoy the Global Positioning
    System (GPS). Think about how that one idea has changed warfare. Think
    about the other uses of that technology, war-winning capability for the
    military and enhancements for commercial navigation. Think about the
    difference in capability from the 1970s, when the idea was first
    proposed, to Operation Iraqi Freedom.

        Our fear is that because of the direction ONR has been given to
    focus on shorter term projects, a proposal like the one RADM Cohen
    mentioned most likely would be rejected today.
        The focus on integration of discovery-oriented basic research with
    more application driven research is having a negative impact on the
    quality of naval basic research by creating a risk-averse atmosphere in
    both the universities and with program management and officers within
    the Navy. The avowed focus on integration with development, is
    discouraging researchers from pursuing bold and innovative ideas, lines
    of research that often take years to complete and whose practical
    application, while profound, is often decades out; and is forcing them
    instead to focus on pursuing research that they know will result in
    products. While it will surely be high quality research, it will not be
    type research that will result in breakthroughs in understanding.
        High-risk research that shows the promise of transformational
    discoveries is prone to failure before it yields a pioneering
    discovery. It is only by pushing the boundaries, constantly taking
    risks, and looking for the bold idea, not the slight innovation, that
    scientists will make the discoveries that will lead to the next laser,
    tomorrow's global positioning system, or the net-centric warfare of
    2030.
        Additionally, the research community and Congress need to impress
    upon Navy and Marine Corps leadership that while the basic research ONR
    supports today will not deliver combat commanders a product they can
    deploy in the next few years, it will afford the Lieutenants and
    Captains under their command profoundly more robust weapons systems
    when they are Admirals and Generals. It is because of an aggressive
    regime of basic research thirty years ago, when today's military
    leaders were junior officers, that they have such an effective and
    diverse suite of combat systems available to them to prosecute their
    mission. Working together, Congress and the research community must
    communicate to the Secretary, the CNO and the Commandant, that basic
    research is essential to the fleet and is a Congressional priority, and
    that if they do not give ONR the ability and direction to pursue an
    aggressive regime of high-risk cutting edge basic research now, the
    nation will be shortchanging our sons and daughters, the sailors and
    marines of tomorrow.
        Again, thank you for the opportunity to bring these important
    issues to your attention. I welcome the opportunity to answer any
    questions.

        Senator Stevens. We appreciate your testimony, but you are
    referring to the 1980's and the strategic defense initiative
    (SDI) period, and after the Soviet downfall, what the public
    demanded was a peace dividend. That dividend was in the form of
    a reduction of a lot of the expenditures that were associated
    in being prepared to counter the activities of the Soviet
    Union. So I think you are requesting something we just cannot
    do.
        Senator.
        Senator Inouye. At this moment, our ground forces are
    benefitting from unmanned air vehicles and unmanned ground
    vehicles. Do we have anything close to being operational
    underwater?
        Dr. Baggeroer. Senator, we do have unmanned underwater
    vehicles and they are currently part of the research agenda as
    to how to use them effectively in regions where you would not
    want to put a very valuable asset.
        In response to Senator Stevens, we certainly do understand
    the peace dividend. Our goal is to maintain the technological
    edge for the next generation, and we certainly well understand
    the constraints on the country while it is now fighting a war
    both in Iraq and on terrorism.
        Senator Inouye. Thank you, sir.
        Senator Stevens. Thank you very much. I appreciate your
    comments, but the Joint Strike Fighter came out of the research
    of the 1980's, and it will not be fielded until about 2017 if
    we keep it on schedule. We cannot keep it on schedule and go
    back to your research budgets.
        Dr. Baggeroer. The cycle time on an acquisition is a
    frustration to us too.
        Senator Stevens. Thank you very much.
        Next, Major General Robert McIntosh, Executive Director,
    Reserve Officers Association of the United States. Good
    morning, sir.

    STATEMENT OF MAJOR GENERAL ROBERT A. McINTOSH, UNITED
                STATES AIR FORCE RESERVE (RET.), EXECUTIVE
                DIRECTOR, RESERVE OFFICERS ASSOCIATION OF
                THE UNITED STATES
        Mr. McIntosh. Good morning, Senator. Mr. Chairman, Senator
    Inouye, the 75,000 members of the Reserve Officers Association
    (ROA) from all five branches of the armed forces thank you for
    this opportunity to speak today.
        Many of America's citizen warriors are continually being
    asked to repair their disrupted civilian lives after
    mobilization and then return to military duty on a repetitive
    basis.
        We believe that legislative changes should be targeted
    toward retaining and recruiting the best citizen soldiers,
    sailors, airmen, marines, and coast guardsmen.
        Despite the work to date by the Congress and the Department
    of Defense, much remains to be done to ensure Reserve and
    National Guard recruiting and retention remain healthy in the
    future. We must preserve one of America's greatest resources:
    its skilled and dedicated citizen military.
        Several important initiatives would enable our Nation's
    Reserve components to optimize their support of national
    defense and of national security. For your consideration, ROA's
    formal written testimony includes a detailed description of
    several needed changes and improvements. The following is a
    partial list of these initiatives.
        Full health care options for the selected Reserve and their
    families.
        Tax credit for employers.
        A formal National Guard and Reserve equipment appropriation
    process.
        Reducing the antiquated age 60 Reserve retirement
    eligibility criteria.
        Improving Montgomery GI Bill provisions.
        Repairing the one-thirtieth rule for special incentive and
    skill pay by making the compensation qualification-based.
        Increasing reenlistment bonuses.
        And repairing the unfair degradation of survivor benefits
    at age 62.
        Many of these initiatives not only affect Reserve readiness
    and the individual reservists but also impact employers,
    spouses, and families. For example, offering TRICARE for
    Reserve component members acts as an incentive for employers to
    continue to hire reservists. Family and civilian employment
    considerations are having a remarkable influence on whether
    citizen soldiers choose to remain in the military.
        Some in the Pentagon have been quoted in the media as
    stating that the Reserve components are becoming unaffordable.
    Even after factoring into the budget the cost of TRICARE
    eligibility for all selected reservists and their families, the
    cost of better incentive and retirement programs, citizen
    soldiers remain a highly cost effective national asset. The
    question should not be whether we can afford to bring pay and
    benefits for the Reserve and Guard to a more equitable
    standard, to a standard that reflects how we use our Reserve
    components. Rather, the proper question is can we afford not to
    take the necessary actions that will ensure the preservation of
    our citizen military, a force composed of some of the most
    skilled and talented men and women in America.
        Time permitting, I look forward to taking your questions,
    and thank you again for the opportunity to testify.
        [The statement follows:]

             Prepared Statement of Major General Robert A. McIntosh

        ROA believes that Congress, the Department of Defense and most
    military support associations have common interests and commitments
    when it comes to supporting the troops who are engaged in this war, and
    we are certainly showing proper solidarity and avoiding partisan
    politics that might question certain decisions relative to the war.
    ROA, like our sister associations, will stay firm in our commitment to
    back the civilian and military leaders as they operationally execute
    the war on terrorism and actions in Iraq. ROA will continue to support
    the troops in the field in any way we can.
        In recent years there have been several improvements in health
    care, pay system, family support, mobilization and demobilization
    problems. Even with recent improvements there remains a great deal yet
    to be done. ROA's mantra is and will continue to be as follows: the
    application of TRICARE for the selected Reserve, reduce retirement age
    eligibility; the elimination of the 1/30th rule; the updating of
    Montgomery GI Bill provisions, tax credit for employers; increased
    bonuses for reenlistments, the repair of the age 62 survivor benefit
    degradation, and an official acknowledgement of the National Guard and
    Reserve equipment account (NGREA).
        Recently a debate has begun. The debate is about whether the
    Reserve Components are becoming too expensive and pricing themselves
    ``out-of-the-market.'' From a historical perspective it is interesting
    to note that the argument about cost of Reserve and National Guard
    incentives, benefits, and readiness postures also became quite intense
    at the end of WW II. To quote from a 1948 ROA Headquarters Bulletin,
    the subject of non-disability retirement for civilian officers: ``The
    National Guard Association and the Reserve Officers Association are
    working very closely together in connection with this legislation as it
    is essential that the proper type bill be presented for consideration
    by Congress.'' Another quote from a late 1940s ROA news letter, ``We
    civilian soldiers, have a real task ahead of us. There are battles to
    be won on the home front, not only now but for many years to come. This
    can only be done by means of organization.'' That ``retirement bill,''
    as it became to be called, was the genesis of the current age 60
    retirement benefit for all members of the National Guard and Reserve.
    At that time, just as now, there were those who said that Reserve
    Component retirement benefit additions would be unaffordable and would
    necessitate long-term costs. Also similar to today's discussion, the
    leadership on Capitol Hill, immediately after WW II, was keenly aware
    of the importance of a viable Reserve Component. Congress clearly
    understood the important value of the bond between America's citizen
    and its military that results from using citizen soldiers in most
    phases of military actions. More recently the Abrams' Doctrine was a
    force build philosophy after Vietnam--a philosophy that matured into a
    policy and became a fundamental planning factor in creating today's
    Total Force.
        In 2004, we find ourselves again confronted with protecting one of
    America's greatest assets--the Reserve Components. It should be no
    surprise that recruiting and retaining an all-volunteer force require a
    different approach than was required for yesteryear's drafted force.
    Maintaining medical readiness, family medical considerations, and
    updating retired pay eligibility criteria are now important to our
    citizen warriors. Reservists fully understand their duty and are proud
    to be serving. However, many in the National Guard and Reserve are
    weighing the factors that affect remaining in the military. They want
    change and they deserve change. And, yes, some of these needed changes
    do cost money. If we wait until recruiting and retention numbers drop,
    then we will immediately be faced with a crisis beyond just scrambling
    to bring in the right numbers of people. It takes a minimum of two
    years to train and equip a person to the point that they can do their
    job without direct supervision. Experience has and should remain a core
    strength of the Reserve Components.
        Regarding the transformation and force structure rebalancing
    initiatives by the Services and DOD, the Reserve Officers Association
    acknowledges that continuous force structure change is appropriate, and
    we support these efforts in concept, but at the same time, we have
    significant concerns. We urge careful consideration and understanding
    of the attributes of a properly balanced Total Force. ROA is concerned
    that the rush to control personnel costs and to reduce the demand for
    Reservists to be in early deployment units could lead to flawed force
    structure planning. ROA acknowledges that some changes in structure and
    mission assignment are appropriate, however, the overall cost
    effectiveness of having a robust and experienced Reserve Component
    force to compliment a more expensive regular force must be considered
    carefully before eliminating or shifting significant numbers of Reserve
    Component billets.
        ROA fully understands that when citizen soldiers are used for an
    extended period there is a substantial personnel cost--a cost of war.
    The statement that ``while mobilized a Reservist or Guardsmen costs as
    much as an active component member'' is not in dispute. On the other
    hand, the citizen soldier cost over a life cycle (mobilized when needed
    and placed into a trained and ready to go posture when not recalled) is
    far less than the cost of an active component soldier. Additional cost
    savings are found when prior service training, developed skills, and
    experience are retained by having adequate numbers of Reserve billets
    across the spectrum of military missions.
        Even after factoring into the budget the cost of TRICARE
    eligibility for all selected Reservists and their families and the cost
    of better incentive and retirement programs, citizen soldiers remain a
    highly cost effective national asset.
        The starting point of any discussion about affordability should be
    that the Reserve Components provide large portions of our total
    military capability in many mission areas for a small fraction of the
    Service and DOD total budget. When the nation needs surge capability
    incrementally, the National Guard and Reserve cost single digit
    percentages and return double-digit mission accomplishment. Also,
    civilian skills that are needed by today's military and are resident in
    citizen warriors are often not adequately considered in force structure
    planning. If the wrong force transformation decisions are made in a
    rush to reduce personnel costs, and if the balance between Reserve
    Component forces and the more expensive active force is inefficient,
    the results will be a less capable and a smaller Total Force. The high
    costs of personnel turnover and of retraining should also be fully
    considered when judging the affordability of solving compensation
    issues for both the Active and the Reserve Components.
        There will be a residual impact on retention of stop loss personnel
    and the continued robust use of National Guard and Reserve personnel in
    the war on terrorism. We are months, if not years, away from knowing
    the true consequences to Reserve Component recruiting and retention.
    ROA believes that absent the improvements we have outlined, there will
    be substantial difficulty in sustaining the high caliber citizen
    warrior force we enjoy today--a force comprised of some of our nation's
    ``brightest and best.''
        TRICARE for Reserve Components.--The fiscal year 2004 NDAA
    authorized TRICARE for Reservists to provide health coverage for
    unemployed Reservist or those unable to get insurance. This legislation
    will address previously identified mobilization and retention issues
    within the services.
        ROA urges Congress to permanently establish the current TRICARE
    program for Selected Reserve and certain Individual Ready Reserve
    categories that are unemployed or not eligible for healthcare.
        Reduce Retirement Age Eligibility for Reservists.--Currently the
    Reserve Components are the only Federal entity that does not receive
    their earned retirement annuity at the time they have completed their
    service. Reducing the retirement eligibility age would close the gap
    between completion of service and collection of annuity.
        ROA urges Congress to reduce the age when a Reserve Component
    member is eligible for retirement pay to age 55 and make retirement
    below age 60 optional.
        Authorize Tax Credits for Employers of Reservist.--Reservist
    employers often shoulder the burden of extra costs to support National
    Defense through the participation of their employees in the military.
    Support by employers of members in the Reserve Component enables the
    Total Force. Today's increased OPTEMPO makes employer support more
    important than ever. Employer pressure is listed as one of the top
    reasons for Reservists to quit.
        ROA urges Congress to support employer tax credits as a way to help
    offset costs associated with employees' Reserve activities and
    reinforce employer support.
        Pay Differential.--While there was once a clear and distinct line
    between Active and Reserve forces, as the two components merge into a
    continuum of forces, the argument for greater parity of benefits
    becomes increasingly compelling. The following areas of pay still are
    governed without parity between Active Duty and Reserve Components:
    Aviation Career Incentive Pay, Hazardous Duty Incentive Pay, Career
    Enlisted Flyers Incentive Pay, Special Duty Assignment Pay, Foreign
    Language Proficiency Pay, and Diving Special Duty Pay.
        ROA urges Congress to delete the 1/30th rule for those areas of pay
    that require Reserve Component personnel to maintain the same
    qualification levels as active duty.
        Raise the Survivor Benefit Plan (SBP) age 62 Benefit.--Public Law
    99-145 replaced the Social Security offset system with a ``two-tier''
    system for those who first become retirement-eligible after September
    30, 1985, but under which survivors' benefits will automatically be
    reduced from 55 percent to 35 percent upon survivors' attaining age 62.
        ROA urges Congress to restore the SBP age 62 benefit from 35
    percent back to 55 percent.
        Just as there is a need to ensure the Reserve Component force is
    properly funded so is there a need to equip them to the Joint Force
    Command specifications. Currently Reserve equipment requirements are
    prioritized with active duty requirements. In most instances the
    Reserve priorities do not make it within the realm of being funded.
        Before 1997, the National Guard and Reserve Equipment Appropriation
    (NGREA) was a critical resource to ensure adequate funding for new
    equipment for the Reserve Components. The much-needed items not funded
    by the respective service budget were frequently purchased through this
    appropriation. In some cases, it was used to bring unit equipment
    readiness to a needed state of state for mobilization. Frequently, the
    funds were used to purchase commercial off-the-shelf items that units
    were unable to obtain through traditional sources. However, in 1997 an
    agreement between the administration and Congress eliminated the
    account with the objective of the Active Component providing the needed
    funds through their individual appropriations.
        The Reserve and Guard are faced with mounting challenges on how to
    replace worn out equipment, equipment lost due to combat operations,
    legacy equipment that is becoming irrelevant or obsolete, and, in
    general, replacing that which is gone or aging through normal wear and
    tear. Today, the ability to use NGREA funds for cost effective
    acquisition is non-existent. An analysis has shown that with the
    implementation of the post-1997 policy, procurement for the Reserve
    Components has decreased. In fiscal year 2004, procurement for the
    Reserve Components' percentage of the DOD procurement budget is at its
    second lowest in recorded history at 3.19 percent. This comes even
    after Congress added $400 million for NGREA. Meanwhile, procurement for
    the Active Component continued to realize consistent real growth from
    fiscal year 1998 through fiscal year 2009 at 108.6 percent.
        In the past, ``cascading'' equipment from the Active Component to
    the Reserve Component has been a reliable source of serviceable
    equipment. However, the changes in roles and missions that have placed
    a preponderance of combat support and combat service support in the
    Reserve Components has not left much to cascade. Also, funding levels,
    rising costs, lack of replacement parts for older equipment, etc. has
    made it difficult for the Reserve Components to maintain their aging
    equipment, not to mention modernizing and recapitalizing to support a
    viable legacy force.
        The Reserve Components would benefit greatly from a National
    Military Resource Strategy that includes a National Guard and Reserve
    Equipment Appropriation.

    Army
        The Army Reserve's list of unresourced equipment requirements
    closely mirrors the fiscal year 2004 list. However, it is important, in
    the light of on-going operations with equipment losses due to combat,
    fair wear and tear, and needed modernized equipment to meet mission
    requirements, that a number of these unresourced requirements are
    enumerated.

    ------------------------------------------------------------------------
                                                                 Fiscal Year
                                                     Shortfall     2005 Buy
    ------------------------------------------------------------------------
    Light Medium Tactical.........................        1,845          600
    Medium Tactical Vehicles......................        7,161          800
    Movement Tracking Systems.....................        9,463        2,075
    All Terrain Lift System (Atlas)...............          173          100
    HMMWV (Plain).................................        3,833          600
    HMMWV (Up Armored)............................          898          100
    Night Vision Image System.....................       22,797        7,000
    Tactical Fire Fighting Truck..................           62           10
    ------------------------------------------------------------------------

        These items are just part of a long list of equipment needed by our
    Army Reserve units to perform their wartime mission for the Total
    Force. Although the sum total of these requirements is considerable,
    the rebalancing of the forces between Active and Reserve Components
    will likely produce effects on the Total Force. And, as mentioned
    earlier, the lack of resources in the NGREA will make it difficult to
    make up and critical shortfalls that occur in the short term.

    Navy
        Total Naval Reserve equipment procurement has steadily declined
    from $260 million in fiscal year 1997 to about $35 million in fiscal
    year 2002, with NGREA and congressional add-ons virtually disappearing
    and equipment shrinking precipitously. Congress recognized the problem
    and increased NGREA funding to $400,000 in fiscal year 2004. As a
    result of the Global War on Terrorism, and the ongoing support by Naval
    Reservists to Active Duty Commands, ROA feels that this upward trend
    must continue.

                              [Dollars in millions]
    ------------------------------------------------------------------------
                  Unfunded Equipment                    Cost       Quantity
    ------------------------------------------------------------------------
    C-40A Transport Aircraft......................       $130.0            2
    NWC and NCF Tactical Trucks...................         36.0  ...........
    NAVELSF Communications Equipment..............         13.0  ...........
    MH-60 Helicopter..............................         66.0            2
    F/A-18 AT-FLIR targeting pods.................         16.0            6
    C-130T Avionics Modernization Program.........         40.0  ...........
    F/A-18 A+block 2 Mod, Radar upgrades..........         53.0           10
    F/A-18 A+CATM/Captive Carry Assets............          3.0  ...........
    Littoral Surveillance Sys/Joint Fires Network.         30.0            1
    F/A-18 Armament Equipment.....................          8.0  ...........
    F-5 Block Upgrade.............................         10.0  ...........
    E2C Navigation Upgrade........................         16.0            6
    ------------------------------------------------------------------------

    Marine Corps

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                     Cost
    ------------------------------------------------------------------------
    F/A-18A ECP-583 (12 USMCR aircraft)........................         70.0
    CH-53E Helicopter FLIR.....................................         45.0
    NBC and Initial Equipment Issue (Reserves).................          7.3
    KC-130 Upgrades............................................         10.5
    CH-53E Upgrades $3.3 million...............................         38.0
    CH-53E Aircrew Procedure Trainer (APT) Flight Simulator....         12.8
    AH-1W Aircrew Procedures Trainer (APT) Flight Simulator....         10.0
    Supplemental Aviation Spares Package.......................          7.0
    ------------------------------------------------------------------------

    Air Force
        C-5: Fund Part A and Part B installation of C-5A Airlift Defensive
    Systems of $83 million for 32 aircraft to provide a greater degree of
    survivability to both aircraft and aircrew and promote common
    operational utility between active duty and reserve forces. Restore
    procurement of C-5 Avionics Modernization Program (AMP) kits cut in
    fiscal year 2004 and those needed in fiscal year 2005 for 60 kits.
        C-9A: Designate C-9 aircraft with the primary mission of aero-
    medical support and allow those aircraft to support VIP/SAM, OSA, Team
    Travel and other mission support areas during low demand times and to
    support increasing the C-9 fleet at Scott AFB with three C-9Cs from
    Andrews Air Force Base, Maryland when they retire their aircraft in
    fiscal year 2005.
        C-17: Increase procurement of C-17 Globemaster III aircraft by at
    least 42 additional aircraft at a rate of 15 to 18 aircraft per year,
    which will ensure an adequate airlift force in the future; and program
    new production C-17 aircraft into the AFR.
        C-40C: Increase procurement of C-40 aircraft by at least six
    additional aircraft to ensure an adequate special mission airlift force
    for the AFR by at least two C-40s per year for three years.
        C-130J: Authorize and appropriate funds for the C-130J Multiyear
    Procurement in fiscal year 2005 and accelerate acquisition for Reserve
    units in Pennsylvania, Minnesota, and Mississippi.
        LITENING PODS: Support $7.8 million to procure 5 LITENING Pods
    toward the multiyear procurement of 30 pods for $43.8 million.
        APN-241 Radar: Support $7 million to procure 8 APN-241 Radar
    upgrades.
        AFR F-16 Helmet Mounted Cuing System: Support $9 million to procure
    approximately 40 night vision goggles toward the multiyear procurement
    of 80 for $20.6 million.
        Fund F-16 Block 25/30/32 to stay viable for employment in modern
    combat using precision guided munitions, and operating against modern
    threat aircraft equipped with helmet cued weapons.
        Information Technology: Support $2.5 million toward a total
    requirement of $54.7 million.
        Pararescue Jumper Equipment: Support $0.7 million toward a total
    requirement of $9.1 million.
        Vehicle Requirements: Support $2 million toward a total requirement
    of $10.6 million.
        Pathfinder Force Protection: Support $9 million toward a total
    requirement of $55.5 million.
        Motor Vehicles for Medical: Support $2.8 million to procure 44
    vehicles.
        Hydrant Fueling Trucks: Support $1.4 million to procure 9 vehicles.
    Other Army Requirements
        The Army Reserve faces critical funding shortfalls in several key
    areas. The shortfalls come in the pay and allowances accounts totaling
    $348.4 million and the operations and maintenance accounts totaling
    $180 million.
      --Of these requirement shortfalls, the most critical is $281 million
            in Inactive Duty Training (IDT), which will prohibit the Army
            Reserve from meeting its peacetime statutory requirement for 48
            drills. Even though there is some cost avoidance due to
            mobilizations, it will not reach the level required to
            successfully conduct the critical training that soldiers need
            for individual and unit readiness. Based on current estimates,
            the Army Reserve would be forced to cease training by late
            spring or early summer 2005.
      --In the area of professional development, the Army Reserve is funded
            at only slightly more than 50 percent of its $148.6 million
            requirement. These funds are needed to meet the Chief of Staff
            of the Army's established goal of 85 percent in military
            specialty training and professional development. The Chief,
            Army Reserve, briefed the Senate Armed Services Committee that
            the goal would be achieved by the end of fiscal year 2005. This
            shortfall will cause the Army Reserve not to meet the 85
            percent goal.
      --Insufficient resources are available to fund the Army Reserve's
            portion of the DOD integrated worldwide common-user network for
            exchanging secure and non-secure data. The funding shortfall of
            just over $33 million is crucial to meet the challenges of
            expanding key command and control applications and service
            demands, increase security requirements and increase network
            capability to insure needed connectivity.
      --Army Reserve Base Operations (BASOPS) required funding is $73.5
            million short of its $355.4 million requirement or 74 percent.
            To provide a viable program which includes such critical items
            as civilian pay, leases, utilities, and custodial contracts, it
            is imperative that BASOPS be funded at least at the 95 percent
            level to insure that those BASOPS items which require 100
            percent funding can be met.
      --Antiterrorism, Force Protections, and Installation Preparedness for
            the Army Reserve minimum essential funding level of $67.6
            million is under funded by 46 percent. This funding is critical
            to the Army Reserve meeting mandated DOD requirements and
            maintaining minimum Force Protection standards for Army Reserve
            facilities worldwide. As Active Component bases are prepared to
            meet increased threats, Reserve Component facilities, which are
            located in thousands of local communities, become a lucrative
            target for those that consider military capability as a
            criminal or terrorist target.
      --Army Reserve environmental programs that are a ``must fund'' are
            unfunded by $33.4 million or 44 percent. As a result, legally
            mandated requirements and the requirements of executive orders
            will not be met. Legal consequences could possibly restrict use
            on training lands at Army Reserve installations such as Forts.
      --The Army Reserve Defense Health Program Accrual is funded at 98
            percent of the $680 million requirement. However, the $7.1
            million shortfall is the result of DOD actuarial studies that
            establish accrual rates based on ``full-time'' and ``part
            time'' personnel. The accrual rates for fiscal year 2005
            increased considerably in both categories. Analysis indicates
            that the rate change will leave the Army Reserve with this
            critical shortfall. This is an item of considerable
            congressional interest, and the rate change creates a
            significant effect on all three military services.
      --Family Programs are a critical to Reserve Component soldiers and
            their families. Active Component soldiers and families, for the
            most part, live in close communities on military installations
            where it is possible to maintain a bond between the soldiers,
            their families, and their units. Many Reserve soldiers do not
            even live in the same communities as their units. Keeping
            families informed and supported can be difficult, particularly
            in more rural areas. In fiscal year 2004, the Army Reserve's
            family programs suffered a $3.9 million shortfall from a
            requirement of $7.5 million. In fiscal year 2005 this shortfall
            is $5.6 million. The Reserve Officers Association recommends
            full funding of the $15.4 million requirement for Army Reserve
            Family Programs to provide essential services to soldiers and
            their families and to facilitate the Army Reserve's ability to
            adequately prepare soldiers for deployments and help families
            to become self-reliant.

    Other Requirements
        Reserve Personnel Appropriation: Last year the Reserve Components
    took cuts in their RPA requirement based on the previous year's usage.
    These unfunded requirements came at a time when many personnel were
    either demobilized or released from stop-loss hence enabling them to
    complete their RPA requirements. Additionally, the services are now
    faced with implementing the Secretary of Defense's transformation
    decisions resulting in conversion and upgrade requirements for school
    and special tours. ROA members have been contacting us to report
    anecdotally that their training location has run out of money for
    funding their requirements (discretionary (non-mission/support)
    activity, and especially OJT and upgrade training, is now at a
    standstill at most units for this fiscal year).
        The unknown in determining the level of challenge to be overcome in
    the rest of fiscal year 2004 is the continually changing variant of
    demobilization. The initial planning, based on active duty MAJCOM-
    planned demobilizations, assumed large-scale numbers of returnees in
    February and March. At this point, there seems to be some slippage in
    that projection, which will affect Reserve participation activities
    between now and the end of the fiscal year.
        Reconstitution: The services will also need to perform a
    reconstitution assessment to determine the results of the mobilization.
    In terms of training consideration will need to consider: Skills that
    must be refreshed for specialty, training needed for upgrade but
    delayed, ancillary training missed, Professional continuing education
    requirements for single-managed career fields and other certified or
    licensed specialties required annually, and professional military
    education needed to stay competitive.
        To summarize, the question should not be whether we can afford to
    bring pay and benefits for the Reserve and Guard to a more equitable
    standard--to a standard that reflects how we use our Reserve
    Components. Rather, the proper question is can we afford not to take
    the necessary actions that will ensure the preservation of our citizen
    military--a force composed of the some of the most skilled and talented
    men and women in America.

        Senator Stevens. I note that you recommend that certain
    individual ready Reserve categories that are unemployed or not
    eligible for health care have TRICARE permanently. Now, how do
    you determine who are the certain individuals and those who are
    not eligible for health care?
        Mr. McIntosh. Actually what we are proposing and what we
    advocate is TRICARE for the entire selected Reserve as an
    option for anyone who is a drilling combat-ready reservist.
        Senator Stevens. Most of those people are employed by small
    businesses, many of whom do provide health care. The minute we
    did that, that would be an advantage that other portions of the
    economy do not have. I do not really understand why that should
    be the case. Why should a person that is retired and in the
    ready Reserve enjoy the benefits of being on active duty?
        Mr. McIntosh. Senator, since we are mobilizing reservists
    repetitively, we want to retain and recruit the best Americans
    to be in our Reserve force. We believe the opportunity to sign
    up for TRICARE versus the cost of medical care in their
    civilian lives is an opportunity we ought to take and will pay
    great dividends in the future. When a reservist, for example,
    returns from numerous deployments and is thinking about leaving
    the Guard and Reserve, if they are invested in TRICARE have
    children that are using that or a spouse that is using that,
    they will be much less likely to leave. So we are really
    recruiting and retaining the family as a whole picture here
    relative to medical care.
        Senator Stevens. Is that not a disincentive to staying on
    active duty? More people will go into the ready Reserve and not
    stay on active duty.
        Mr. McIntosh. Actually we have not studied that completely.
    I believe it would not be an incentive for people to leave the
    active force and join the Reserve. I think people leave the
    active force for many, many reasons, and I would not see them
    leaving because they know they could retain TRICARE even after
    they left. But it is a fair question, Senator.
        Senator Stevens. Thank you.
        Senator Inouye.
        Senator Inouye. Thank you very much. I just wanted to note
    that many of your suggestions should be made to the authorizing
    committee. I am certain you have done that.
        Mr. McIntosh. And it is, Senator, and we are aware of that.
    Thank you, though.
        Senator Stevens. Thank you very much, General. Appreciate
    your coming.
        Our next witness is Tom McKibban, President of the American
    Association of Nurse Anesthetists. Good morning, sir.

    STATEMENT OF TOM L. MCKIBBAN, CERTIFIED REGISTERED
                NURSE ANESTHETIST, MS, PRESIDENT, AMERICAN
                ASSOCIATION OF NURSE ANESTHETISTS
        Mr. McKibban. Good morning. Chairman Stevens and Senator
    Inouye, good morning and thank you for the opportunity to
    testify today. My name is Tom McKibban. I am a certified
    registered nurse anesthetist, better known as a CRNA, and
    President of the American Association of Nurse Anesthetists,
    known as the AANA. The AANA represents more than 30,000 CRNA's,
    including 497 active duty CRNA's, and 742 reservists in the
    military. As of May 2003, more than 360 CRNA's were deployed in
    the Middle East providing anesthesia care on ships, on the
    ground, and for U.S. special forces operations.
        Today maintaining adequate numbers of active duty CRNA's is
    of utmost concern for the Department of Defense to meet its
    military medical readiness mission. For several years, the
    number of CRNA's serving in active duty has fallen somewhat
    short of the number authorized by the DOD. This is complicated
    by strong demand for CRNA's in both the public and private
    sectors. The AANA appreciates this committee's continued
    support for the funding, the incentive special pay (ISP) for
    CRNA's to address this issue.
        The considerable gap between civilian and military pay was
    addressed in the fiscal year 2003 Defense Authorization Act
    with an ISP increase from $15,000 to $50,000. At this time we
    would request full funding to increase ISP to $50,000 for all
    services to recruit and retain CRNA's.
        To ensure 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 about a 2003 proposed rule to include
    anesthesiologist assistants, known as AA's, as authorized
    providers under the TRICARE program. The rule is under review
    by the OMB. The TRICARE proposal demands two providers, an
    anesthesiologist and an AA, provide military personnel and
    dependents the same care that either an anesthesiologist or
    nurse anesthetist can provide alone. There is insufficient
    evidence of the safety and cost effectiveness of AA's to
    authorize these providers into the TRICARE program.
        Last, the AANA is proud to announce the establishment of a
    joint VA/Defense Department program in nurse anesthesia
    education. This program cost effectively makes use of the
    existing U.S. Army School of Nurse Anesthesia, Fort Sam
    Houston, to educate CRNA's for both the VA and the U.S. armed
    services. This joint nurse anesthesia graduate program begins
    this June in San Antonio, Texas.
        In conclusion, the AANA believes that the recruitment and
    retention of CRNA's in the services is critical to our men and
    women in uniform. Funding an increase in the ISP will help meet
    this challenge.
        Also, we believe that recognizing AA's under TRICARE will
    not improve medical readiness of the DOD.
        Last, we commend and thank this committee for your
    continued support for CRNA's in the military.
        I will be happy to answer any questions you may have. Thank
    you.
        [The statement follows:]

                     Prepared Statement of Tom L. McKibban

        The American Association of Nurse Anesthetists (AANA) is the
    professional association representing over 30,000 certified registered
    nurse anesthetists (CRNAs) in the United States, including 497 active
    duty CRNAs and 742 reservists in the military. 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

        Let us begin by describing the profession of nurse anesthesia, and
    its history and role with the military medical system.
        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. Today CRNAs participate in
    approximately 65 percent of the anesthetics given to patients each year
    in the United States. Nurse anesthetists are also the sole anesthesia
    providers in more than 65 percent of rural hospitals, assuring access
    to surgical, obstetrical and other healthcare services for millions of
    rural Americans.
        CRNAs have a personal and professional commitment to patient
    safety, made evident through research into our practice. In our
    professional association, we state emphatically ``our members' only
    business is patient safety.'' Safety is assured through education, high
    standards of professional practice, and commitment to continuing
    education. Having first practiced as registered nurses, CRNAs are
    educated to the master's degree level and meet the most stringent
    continuing education and recertification standards in the field. Thanks
    to this tradition of advanced education, the clinical practice
    excellence of anesthesia professionals, and the advancement in
    technology, we are humbled and honored to note that anesthesia is 50
    times safer now than 20 years ago (National Academy of Sciences, 2000).
    Research further demonstrates that the care delivered by CRNAs,
    physician anesthesiologists, or by both working together yields similar
    patient safety outcomes. In addition to studies performed by the
    National Academy of Sciences in 1977, Forrest in 1980, Bechtholdt in
    1981, the Minnesota Department of Health in 1994, and others, Dr.
    Michael Pine MD MBA recently concluded once again that among CRNAs and
    physician anesthesiologists, ``the type of anesthesia provider does not
    affect inpatient surgical mortality'' (Pine, 2003). Thus, the practice
    of anesthesia is a recognized specialty in nursing and medicine. Both
    CRNAs and anesthesiologists administer anesthesia for all types of
    surgical procedures from the simplest to the most complex, either as
    single providers or together.

                       NURSE ANESTHETISTS IN THE MILITARY

        Since the mid-19th Century, our profession of nurse anesthesia has
    been proud to provide anesthesia care for our past and present military
    personnel and their families. From the Civil War to the present day,
    nurse anesthetists have been the principal anesthesia providers in
    combat areas of every war in which the United States has been engaged.
        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 anesthesiologists 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 and Desert Storm. Military have CRNAs
    provided critical anesthesia support to humanitarian missions around
    the globe in such places as Bosnia and Somalia. In May 2003,
    approximately 364 nurse anesthetists had been deployed to 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 Iraqi 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. Major General Barbara C.
    Brannon, Assistant Surgeon General, Air Force Nursing Services,
    testified before this Senate Committee on April 28, 2004, to provide an
    account of CRNAs on the job overseas. She stated, ``Major Kathyrn
    Weiss, a CRNA from Hurlbert Field, deployed with the Army's 10th
    Special Forces Group to Northern Iraq to provide frontline emergency
    medical capabilities in an imminent danger area within the range of
    enemy artillery. The team was recognized by the award of the Bronze
    Star for their meritorious achievements. Major Weiss is just one
    example of the tremendous capability of our CRNAs.''
        In the current mission ``Operation Iraqi Freedom'' CRNAs will
    continue to be deployed both on ships and ground, as well as U.S.
    special operations forces. This committee must ensure that we retain
    and recruit CRNAs now and in the future to serve in these military
    overseas deployments.

    CRNA RETENTION AND RECRUITING--HOW THIS COMMITTEE CAN HELP THE DEFENSE
                                   DEPARTMENT

        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 fallen somewhat short of the number
    authorized by the Department of Defense. This is further complicated by
    strong demand for CRNAs in both the public and private sectors.
        However, it is essential to understand that while there is strong
    demand for CRNA services in the public and private healthcare sectors,
    the profession of nurse anesthesia is working effectively to meet this
    workforce challenge. The AANA anticipates growing demand for CRNAs. Our
    evidence suggests that while vacancies exist, there is not a crisis in
    the number of anesthesia providers. The profession of nurse anesthesia
    has increased its number of accredited CRNA schools, from 85 to 88 the
    past two years. The number of qualified registered nurses applying for
    CRNA school continues to climb, with each CRNA school turning away an
    average of 23 qualified applicants in 2002. The growth in the number of
    schools, the number of applicants, and in production capacity, has
    yielded significant growth in the number of nurse anesthetists
    graduating and being certified into the profession. The Council on
    Certification of Nurse Anesthetists reports that in 1998, our schools
    produced 942 new graduates. By 2003, that number had increased to
    1,474, a 56 percent increase in just five years. The growth is expected
    to continue. The Council on Accreditation of Nurse Anesthesia
    Educational Programs (COA) projects that CRNA schools will produce an
    estimated 1,900 graduates in 2005.
        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.

    The Incentive Special Pay for Nurses
        According to a March 1994 study requested by the Health Policy
    Directorate of Health Affairs and conducted by the Department of
    Defense, 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 for CRNAs in the healthcare
    community leading to higher incomes, widening the gap in pay for CRNAs
    in the civilian sector compared to the military. The fiscal year 2003
    AANA Membership survey measured income in the civilian sector by
    practice setting. The median income in a hospital setting is $120,000,
    anesthesiologist group $108,000, and self-employed CRNA $140,000
    (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 CRNA's salary of $84,000 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), healthcare,
    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 an 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 2005. The ISP recognizes the special skills and advanced
    education that CRNAs bring to the Department of Defense healthcare
    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 healthcare 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 necessarily eligible for board
    certification pay since their graduate degrees are not in a clinical
    specialty. 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 the Defense Department and the respective services
    to reexamine the issue of awarding board certification pay only to
    CRNAs who have clinical master's degrees.

     DOD/VA RESOURCE SHARING: VA-DOD NURSE ANESTHESIA SCHOOL UNIVERSITY OF
                TEXAS HOUSTON HEALTH SCIENCE CENTER, HOUSTON, TX

        The establishment of a joint VA-Department of Defense program in
    nurse anesthesia education holds the promise of making significant
    improvements in the VA CRNA workforce. This will improve retention of
    VA registered nurses, while cost-effectively making use of existing
    U.S. government programs and the U.S. Army nurse anesthesia school.
    This VA nurse anesthesia graduate program begins this June at the
    Army's Fort Sam Houston Nurse Anesthesia program in San Antonio, Texas.
    This VA nurse anesthesia program creates three openings for VA
    registered nurses to apply to and earn a Master of Science in Nursing
    (MSN) in anesthesia granted through the University of Texas Houston
    Health Science Center. Three students are enrolled for the program
    start date June 2004.
        The 30-month program is broken down into two phases. Phase I, 12
    months, is the didactic portion of the anesthesia training at the U.S.
    AMEDD Center and School (U.S. Army School for Nurse Anesthesia). Phase
    II, 18 months, is clinical practice education, in which VA facilities
    and their affiliates would serve as clinical practice sites. The agency
    will use VA hospitals in Augusta, Georgia, and Dayton, Ohio. Similar to
    military CRNAs who repay their educational investment through a service
    obligation to the U.S. Armed Forces, graduating VA CRNAs would serve a
    three-year obligation to the VA health system. Through this kind of
    Department of Defense-DVA resource sharing, the VA will have an
    additional source of qualified CRNAs to meet anesthesia care staffing
    requirements.
        We are pleased to note that both the U.S. Army Surgeon General and
    Dr. Michael J. Kussman, MD MS FACP (Department of Veterans' Affairs
    Chief Consultant, Acute Care) approved funding to start this VA nurse
    anesthesia school. With modest levels of additional funding, this joint
    VA-Defense Department nurse anesthesia education initiative can grow
    and thrive, and serve as a model for meeting other VA workforce needs,
    particularly in nursing.
        DOD and VA resource sharing programs effectively maximize
    government resources while improving access to healthcare for veterans.

                     UPDATE: INCLUSION OF AAS UNDER TRICARE

        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, 2003. (68 FR
    16247, 4/3/2003). The regulation is now being reviewed at the Office of
    Management of Budget (OMB) as of February 9, 2004. There still has been
    no congressional review about adding these new providers, and no
    assessment of their safety record or cost-effectiveness.
        The AANA has several objections to this proposal. First, there is
    insufficient evidence of the safety and cost-effectiveness of AAs to
    authorize these providers into the TRICARE program. DOD has not
    sufficiently demonstrated what benefit TRICARE may gain by recognizing
    AAs as an authorized provider. As we understand this matter, AAs (in
    the very limited number of states that license their practice) may
    administer anesthesia only under the close and immediate medical
    direction of anesthesiologists. The TRICARE proposed rule does not
    define this type of medical direction of AAs. In addition,
    correspondence from TRICARE says an AA would be an ``extra pair of
    hands'' for an anesthesiologist, suggesting one-to-one constant
    supervision in the operating room. By contrast, both experience and
    anesthesiologists themselves say ``direct supervision'' implies a
    scheme in which AAs are supervised by someone some distance away, not
    necessarily in the operating room.
        Even so, the TRICARE proposal demands two providers, an
    anesthesiologist and an AA, to provide military personnel and
    dependents the same care that either an anesthesiologist or nurse
    anesthetist could provide alone. The agency's proposal to introduce AAs
    into TRICARE is further undermined by AAs' lack of diffusion within the
    healthcare system. Since AAs' introduction 30 years ago, only seven
    states have thought it prudent to provide AAs separate licensure or
    certification and only two schools exist to train them. Last, the
    proposal has drawn the opposition of 37 retired military and Veterans
    organizations and the 5.5 million members of The Military Coalition,
    and several members of the House and Senate.
        The proposed rule to introduce AAs under TRICARE is not in response
    to a shortage of anesthesia providers. Further Congressional review is
    required on the safety and cost-effectiveness of AAs before they are
    recognized under TRICARE.

                                   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 an
    increase in ISP. Also, we believe that the inclusion of improperly
    supervised Anesthesiologists Assistants (AAs) in the TRICARE system
    would impair the quality of healthcare for our military personnel and
    dependents, and should not be approved. Last, we commend and thank this
    committee for their continued support for CRNAs in the military.

        Senator Stevens. I have two questions. One is, how often is
    the special pay bonus to be paid in your judgment if it is
    raised to $50,000?
        Mr. McKibban. I believe it is a yearly, sir.
        Senator Stevens. A yearly?
        Mr. McKibban. A yearly ISP, yes.
        Senator Stevens. Is there reenlistment yearly? I do not
    understand. Normally that is a reenlistment bonus. Do you sign
    up for just 1 year?
        Mr. McKibban. No. I believe this is a yearly special pay
    for their specialty to ensure that they continually will serve
    in the military, sir.
        Senator Stevens. Is that master's degree requirement a
    matter of law or a matter of regulation?
        Mr. McKibban. I believe it is a matter of regulation. It is
    law. I am sorry, sir.
        Senator Stevens. I am compelled to say what Senator Inouye
    said to the previous witness. I am afraid you have asked us to
    do two things not within the jurisdiction of this committee. We
    do not handle the legislation. Changes in the law should be
    addressed to the Armed Services Committee. I hope you will
    present those requests to them.
        Senator Inouye.
        Senator Inouye. Yes. What is the current shortage of nurse
    anesthetists in the armed forces?
        Mr. McKibban. Number-wise? The Army and the Air Force--I do
    not have the exact numbers. Last week we were just notified
    that now the Navy is predicting a shortage in the Navy side of
    it too, sir.
        Senator Inouye. So there is a shortage but you are not
    aware of the number.
        Mr. McKibban. I do not have the exact number, no, sir.
        Senator Inouye. Thank you, sir.
        Senator Stevens. Thank you very much, Mr. McKibban.
    Appreciate it.
        Mr. McKibban. Thank you.
        Senator Stevens. Our next witness is Ms. Joyce Raezer,
    President of the National Military Family Association. Good
    morning, ma'am.

    STATEMENT OF JOYCE WESSEL RAEZER, DIRECTOR, GOVERNMENT
                RELATIONS, THE NATIONAL MILITARY FAMILY
                ASSOCIATION
        Ms. Raezer. Thank you, Mr. Chairman. I am not the
    President. I am representing the President today. Our President
    is Candace Wheeler. I am the Director of Government Relations.
        The National Military Family Association (NMFA) thanks you
    and Senator Inouye for the opportunity to speak about the
    quality of life of military families and the service members.
        With other members of the Military Coalition, NMFA is
    grateful for your leadership last year in securing increased
    funding for family support programs such as the family advocacy
    program and for pay and allowances to help offset the
    extraordinary demands of military service. Military families
    were most grateful to Congress for extending last year's
    increases to imminent danger pay and family separation
    allowance through December 2004. We hope Congress will make
    these increases permanent, and even if not made permanent, that
    funding will be provided to keep the family separation
    allowance at or near the current level for all eligible service
    members. Family separation allowance is not combat pay.
    Additional expenses families incur when the service member is
    assigned away from home are not based on a service member's
    assignment location. To the family, gone is gone.
        Longer and more frequent deployments are indications that
    our force is stretched thin. Military families are also
    stretched too thin.
        Our message to you today, however, is simple. Funding
    directed toward family readiness works. Funding you have helped
    to provide supports additional National Guard family assistance
    centers, more child care, increased staffing and programming
    directed to families of deployed service members, and return
    and reunion programs. New DOD programs such as Military One
    Source will make even more counseling and other assistance
    available, especially to isolated families.
        Funding directed toward family support is making a
    difference but it is still sporadic. Consistent levels of
    targeted funding are needed, along with consistent levels of
    command focus on family support, professional backup for the
    volunteers carrying the largest load of family support, and
    additional help for isolated Guard and Reserve families and
    families with special needs. Preventive mental health resources
    must be more accessible for families and service members over
    the long term.
        A significant element of family readiness is quality
    education for military children despite the challenges posed by
    ever-moving students and situations where the military parent
    is deployed or in harm's way. Now more than ever, we ask that
    you ensure both DOD and civilian schools educating military
    children have the resources to meet the counseling, staffing,
    and program challenges arising from new, ongoing, and changed
    missions, especially when deployments are extended. Families in
    Europe, for example, where some service members' Iraq tours
    were recently extended are concerned that funds will not be
    available for summer school this year. They need to know that
    the DOD schools can provide programs their children need.
        We applaud the increased partnerships between military
    commanders, DOD officials, and school officials to promote
    quality education for military children. The successful joint
    venture education initiative in Hawaii and the new military
    student website are just two examples of how folks are working
    together to provide more information to parents, commanders,
    and educators about issues affecting military children and to
    further partnerships to support children.
        Because Impact Aid is not fully funded, NMFA recommends
    increasing the DOD supplement to Impact Aid to $50 million to
    help civilian districts better meet the additional demands
    placed on them and the children they are charged to educate.
        NMFA also asks that you ensure the defense health system
    has adequate funding to make the challenges it faces. NMFA is
    concerned that the cost of performing additional duties under
    the new TRICARE contracts will be one strain too many,
    especially for the direct care system that is already dealing
    with a multitude of stressors such as maintaining readiness,
    mobilizing Guard and Reserve members, and implementing new
    benefits. Some military treatment facilities are cutting back
    on hours or services at exactly the time when they are supposed
    to be pulling in more care under the new TRICARE contracts. How
    can the new contracts function to the benefit of beneficiaries
    if they are designed to do one thing and that one thing is
    blocked?
        The future of successful initiatives such as family-
    centered care is in jeopardy if the direct care system must
    avert central funding to other demands. Please ensure not only
    the defense health system is funded to fulfill its
    responsibilities, but also that oversight is sufficient to
    prevent harm to beneficiaries during a transition process to
    new contracts that are supposed to help them.
        Mr. Chairman, the concern you and Senator Inouye have
    expressed today sends an important message to service members
    and their families. Congress understands the link between
    military readiness and the quality of life of the military
    community. Strong families ensure a strong force. Thank you for
    your work in keeping our families and force strong.
        [The statement follows:]

                   Prepared Statement of Joyce Wessel Raezer

        The National Military Family Association (NMFA) is the only
    national organization whose sole focus is the military family and whose
    goal is to influence the development and implementation of policies
    which will improve the lives of those family members. Its mission is to
    serve the families of the Seven Uniformed Services through education,
    information and advocacy.
        Founded in 1969 as the Military Wives Association, NMFA is a non-
    profit 501(c)(3) primarily volunteer organization. NMFA today
    represents the interests of family members and the active duty, reserve
    components and retired personnel of the seven uniformed services: Army,
    Navy, Air Force, Marine Corps, Coast Guard, Public Health Service and
    the National Oceanic and Atmospheric Administration.
        NMFA Representatives in military communities worldwide provide a
    direct link between military families and NMFA staff in the nation's
    capital. Representatives are the ``eyes and ears'' of NMFA, bringing
    shared local concerns to national attention.
        NMFA receives no federal grants and has no federal contracts.
        NMFA's web site is located at http://www.nmfa.org.
        Mr. Chairman and Distinguished Members of this Subcommittee, the
    National Military Family Association (NMFA) would like to thank you for
    the opportunity to present testimony on quality of life issues
    affecting servicemembers and their families. NMFA is also grateful for
    your leadership in the 1st Session of the 108th Congress in securing
    increased funding for essential quality of life programs, such as
    National Guard and Reserve family support and the Family Advocacy
    Program, as well as pay and allowances, such as the increased Family
    Separation Allowance, that help to offset the extraordinary demands of
    military service. NMFA thanks Congress for providing funds for
    servicemember's R&R travel, additional child care, and schools that
    educate military children.
        As a founding member of The Military Coalition, NMFA subscribes to
    the recommendations contained in the Coalition's testimony presented
    for this hearing. In this statement, NMFA will expand on a few issues:
    Pay and allowances; health care; family support, including the unique
    needs of Guard and Reserve families; and education for military
    children.
    Pay and Allowances
        Servicemembers and their families appreciate the dramatic
    improvements in military compensation achieved over the past several
    years. The combination of across-the-board raises at the level of the
    Employment Cost Index (ECI) plus 0.5 percent and targeted raises for
    certain ranks have improved their financial well-being. The five-year
    plan, ending in fiscal year 2005, to increase Basic Allowance for
    Housing (BAH) has been especially beneficial for military families
    living in high cost of living areas.
    Family Separation Allowance
        Military members and their families were most grateful to Congress
    last year for including increases in Family Separation Allowance and
    Imminent Danger Pay in the fiscal year 2003 Supplemental Appropriations
    bill. They were relieved when these increases were authorized and
    funded to continue through December 2004, yet alarmed that last fall's
    debate over both the amount of Family Separation Allowance and who
    should receive it is surfacing again. NMFA understands DOD is looking
    at the wide range of pays and allowances in order to determine their
    proper mix and use. We believe, however, that the amount of Family
    Separation Allowance must remain the same for all eligible
    servicemembers, no matter where they are deployed. Family Separation
    Allowance is not combat pay--it is paid in recognition of the
    additional costs a family endures when a servicemember is deployed. It
    helps pay for the additional long distance phone calls the deployed
    servicemember and family make; it pays for the car or home repairs the
    servicemember performs when at home; it pays for the tutoring a child
    needs when the family chemistry or algebra expert is deployed. These
    costs are not incurred just by the families of servicemembers in a
    combat zone; whether the servicemember is in Iraq, Afghanistan, on a
    ship in the Pacific, or on an unaccompanied tour in Korea, to the
    family, ``gone is gone!''
        NMFA must also note that, while families of deployed servicemembers
    face similar costs of separation no matter where the servicemember is
    deployed, other pay and benefits change dramatically. Servicemembers
    deployed to certain combat zones not only receive Imminent Danger Pay
    and other combat-related pays, but also are entitled to certain tax
    advantages. Servicemembers in other locations, such as Korea or on
    board ships outside combat zones, do not receive the same tax
    advantage. Thus, their families have similar expenses to meet with less
    income. To these families, last year's increase in Family Separation
    Allowance was an especially welcome relief to tight family budgets.
        NMFA asks this Subcommittee to ensure that funding is continued to
    sustain the increased level of Family Separation Allowance for all
    eligible servicemembers. NMFA also asks Congress to consider indexing
    the Family Separation Allowance to inflation so that we do not have to
    wait for another war for this allowance to be increased again.

    Health Care
        This year, NMFA is focused on health care transition issues and the
    costs to the defense health system imposed by these issues: the
    transition to the new TRICARE contracts, Guard and Reserve family
    members' transition to the TRICARE benefit when the servicemember is
    called to active duty, and the transition that occurs during the return
    and reunion process as servicemembers and their families adjust to the
    end of a deployment.

    Transition to New TRICARE Contracts
        NMFA's concerns during the transition to the new TRICARE
    contracts--the first contract handoff occurs on June 1--revolve around
    the ability of the Defense Health System to ensure beneficiaries can
    access care in a timely manner and the ability of the system to
    maintain continuity of care. NMFA is concerned that the direct care
    system may not be able to fulfill its new responsibilities under the
    new contracts while working so hard to meet readiness requirements
    related to deployments and force health protection, care for wounded
    and injured servicemembers, and care for the active duty families,
    retirees, and survivors enrolled in TRICARE Prime to primary care
    managers in their facilities. Under the new contracts, military
    treatment facilities (MTFs) will be responsible for appointing, which
    is often done by the TRICARE managed care support contractors under the
    current contracts. MTFs must also fill the void created by the
    departure of key medical personnel currently provided by the TRICARE
    contractors under resource sharing arrangements. These arrangements end
    on the day health care delivery begins under the new TRICARE contracts,
    as the responsibility for them shifts from the TRICARE contractor to
    the MTFs. NMFA is pleased that DOD has offered MTFs the opportunity of
    a bridge process to work with outgoing and incoming contractors to keep
    resource sharing providers in place until establishing their own
    arrangements. Unfortunately, NMFA has heard most MTFs are not taking
    advantage of this bridge option and are looking at other contracting
    options that will not preserve the continuity of care and access
    currently enjoyed by patients. The relationships resource sharing
    personnel have developed with patients in places such as Madigan Army
    Medical Center, where the pediatric clinic is staffed entirely by
    resource sharing, should not be severed abruptly at a time when this
    continuity of care is needed most.
        NMFA is concerned that the costs of performing additional duties
    under the new TRICARE contracts will be one strain too many for a
    direct care system dealing with a multitude of stressors. NMFA is
    hearing that several MTFs are cutting back on pharmacy or clinic hours,
    eliminating contract staff, or capping TRICARE Prime enrollment even as
    they are forced to commit more personnel to support deployments, ensure
    newly-mobilized Guard and Reserve members are medically-ready to
    deploy, and care for wounded servicemembers returning from Iraq and
    Afghanistan. Cutbacks in the direct care system can result in one of
    two scenarios. An MTF may appeal to the ``patriotism'' of active duty
    families, survivors, retirees and their families by telling them that
    appointments are currently not available and asking them to wait. Or,
    if it chooses to ensure that TRICARE Prime access standards are met, it
    may be forced to send beneficiaries into the civilian purchased care
    networks for their care, probably at a greater cost to the government.
        When each of the current twelve regions started delivery of
    services under TRICARE in the mid to late 1990s, significant problems
    for beneficiaries developed. Over the ensuing years, most of the
    problems have been identified and corrected. The acceptance of and
    satisfaction with TRICARE Prime, the HMO piece of TRICARE, has steadily
    increased among beneficiaries. The transition to the new contracts must
    not once again put TRICARE at the top of concerns at beneficiary
    forums. Just as servicemembers are stretched thin with repeated
    deployments and time away from home, families are under increased
    stress. Problems accessing health care or difficulty in obtaining
    accurate information on how to do so should not be an additional part
    of this equation. The promise of TRICARE was that in times of high
    military operations tempo the purchased care system could pick up the
    slack when MTFs were stretched thin because of military optempo. This
    promise can only be kept if the defense health program is fully funded
    to meet its medical readiness mission and to provide the employer-
    sponsored health care benefit. Further, it must incorporate enough
    flexibility to permit funding to be moved between the two segments as
    needed to ensure beneficiary access to quality care and to provide that
    quality care in the most cost-effective setting possible.

    Guard and Reserve Health Care
        NMFA is grateful to Congress for its initial efforts to enhance the
    continuity of care for National Guard and Reserve members and their
    families. Unfortunately, as discussed in the statement submitted by The
    Military Coalition, the temporary health care provisions enacted in the
    fiscal year 2004 NDAA have not yet been implemented. Information and
    support are improving for Guard and Reserve families who must
    transition into TRICARE; however, NMFA believes that going into TRICARE
    may not be the best option for all of these families. Guard and Reserve
    servicemembers who have been mobilized should have the same option as
    their peers who work for the Department of Defense: DOD should pay
    their civilian health care premiums. The ability to stay with their
    civilian health care plan is especially important when a Guard or
    Reserve family member has a special need, a chronic condition, or is in
    the midst of treatment. While continuity of care for some families will
    be enhanced by the option to allow Guard and Reserve members to buy
    into TRICARE when not on active duty--if ever implemented--it can be
    provided for others only if they are allowed to remain with their
    civilian health insurance. Preserving the continuity of their health
    care is essential for families dealing with the stress of deployment.

    Post Deployment Health for Servicemembers and Families
        The Services recognize the importance of educating servicemembers
    and family members about how to effect a successful homecoming and
    reunion and have taken steps to improve the return and reunion process.
    Information gathered in the now-mandatory post-deployment health
    assessments may also help identify servicemembers who may need more
    specialized assistance in making the transition home. Successful return
    and reunion programs will require attention over the long term. Many
    mental health experts state that some post-deployment problems may not
    surface for several months after the servicemembers return. NMFA is
    especially concerned about the services that will be available to the
    families of returning Guard and Reserve members and servicemembers who
    leave the military following the end of their enlistment. Although they
    may be eligible for transitional health care benefits and the
    servicemember may seek care through the Veterans' Administration, what
    happens when the military health benefits run out and deployment-
    related stresses still affect the family? As part of its return and
    reunion plan, the military One Source contracts will help returning
    servicemembers and families access local community resources and to
    receive up to six free face-to-face mental health visits with a
    professional outside the chain of command. NMFA is pleased that DOD has
    committed to funding the counseling provided under the One Source
    contract and is implementing this counseling for servicemembers and
    families of all Services.
        Post-deployment transitions could be especially problematic for
    servicemembers who have been injured and their families. Wounded
    servicemembers have wounded families and, just as it will take some
    time for servicemembers physical wounds to heal, it will take time for
    the emotional wounds to heal. These servicemembers have received
    excellent care through military hospitals. In many cases, their
    families have also received superior support services through the
    hospitals' family assistance personnel. The medical handoff of the
    servicemember to the VA is steadily improving and the VA and DOD are
    working well together to improve the servicemembers' continuity of
    care. Ensuring the handoff to the VA or community-based support
    services needed by the wounded families is just as important.
        The new round of TRICARE contracts must provide standardized ways
    to access health care across all regions and emphasize providing
    continuity of care to beneficiaries during the transition from old to
    new contracts. The Defense Health System must be funded sufficiently so
    that the direct care system of military treatment facilities and the
    purchased care segment of civilian providers can work in tandem to meet
    the responsibilities given under the new contracts, meet readiness
    needs, and ensure access for all TRICARE beneficiaries. 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 options for obtaining
    mental health services and other return and reunion support must be
    provided to families as well as to servicemembers.

    Family Support
        Since our testimony before this Subcommittee last year, NMFA is
    pleased to note the Services continue to refine the programs and
    initiatives to provide support for military families in the period
    leading up to deployments, during deployment, and the return and
    reunion period. Our message to you today is simple: funding directed
    toward family support works! We have visited installations that
    benefited from family support funding provided through the wartime
    appropriations. This money enabled the National Guard Bureau to open
    additional Family Assistance Centers in areas with large numbers of
    mobilized Guard and Reserve members. It enabled the Services to provide
    additional child care for active duty families through their military
    child development centers and Family Child Care providers and to work
    on developing arrangements with child care providers in other locations
    to serve Guard and Reserve families. It enabled military family centers
    to hire additional staff and to increase programming and outreach to
    families of deployed servicemembers. It improved the ability of
    families to communicate with deployed servicemembers and enhanced
    Service efforts to ease servicemembers' return and reunion with their
    families.
        Funding directed toward family support is making a difference, but
    still sporadically. Consistent levels of targeted funding are needed,
    along with consistent levels of command focus on the importance of
    family support programs. NMFA remains concerned that installations must
    continue to divert resources from the basic level of family programs to
    address the surges of mobilization and return. Resources must be
    available for commanders and others charged with ensuring family
    readiness to help alleviate the strains on families facing more
    frequent and longer deployments. As the mobilization and de-
    mobilization of Guard and Reserve members continues, support for their
    families remains critical.
        Projected force numbers for the second rotation of troops under
    Operation Iraqi Freedom call for 40 percent to be Guard and Reserve
    members. This number does not include servicemembers called up for duty
    in Operation Enduring Freedom in Afghanistan and those who continue to
    serve in Bosnia. National Guard and Reserve families often find
    themselves a great distance from traditional military installation-
    based support facilities. They may also be far from the Guard armory or
    reserve center where their servicemember trains. How then does the
    family learn about all their active duty benefits or receive answers
    about how to follow the rules? Continued targeted funding for Family
    Assistance Centers and other support programs is essential to assist
    these families in their transition from the civilian to military life.

    What's Needed for Family Support?
        Family readiness volunteers and installation family support
    personnel in both active duty and reserve component communities have
    been stretched thin over the past 2\1/2\ years as they have had to
    juggle pre-deployment, ongoing deployment, and return and reunion
    support, often simultaneously. Unfortunately, this juggling act will
    likely continue for some time. Volunteers, whose fatigue is evident,
    are frustrated with being called on too often during longer than
    anticipated and repeated deployments. We now hear from volunteers and
    family members whose servicemembers are serving in a second long
    deployment to a combat zone since the war on terrorism began. Family
    member volunteers support the servicemembers' choice to serve; however,
    they are worn out and concerned they do not have the training or the
    backup from the family support professionals to handle the problems
    facing some families in their units. Military community volunteers are
    the front line troops in the mission to ensure family readiness. They
    deserve training, information, and assistance from their commands,
    supportive unit rear detachment personnel, professional backup to deal
    with family issues beyond their expertise and comfort level, and
    opportunities for respite before becoming overwhelmed. NMFA is pleased
    that the Army is establishing paid Family Readiness Group positions at
    many installations dealing with deployments to provide additional
    support to families and volunteers--more of these positions are needed.
        NMFA knows that the length of a deployment in times of war is
    subject to change, but also understands the frustrations of family
    members who eagerly anticipated the return of their servicemembers on a
    certain date only to be informed at the last minute that the deployment
    will be extended. Other than the danger inherent in combat situations,
    the unpredictability of the length and frequency of deployments is
    perhaps the single most important factor frustrating families today.
    Because of the unpredictable nature of the military mission, family
    members need more help in acquiring the tools to cope with the
    unpredictability. A recent town meeting in Europe was held for family
    members of soldiers who were among the 20,000 troops recently extended
    for ninety more days. The commander of U.S. Army Europe heard first-
    hand of the disruptions caused by this extension to families who only a
    few weeks before had been sitting in reintegration briefings and
    planning how to spend the time during the servicemembers' promised
    block leave. Now, these families face changes in move dates and fears
    they will not be settled at new assignments before school starts.
    Activities for children--including summer school--are now needed more
    than ever. School principals who thought parents would be home for
    graduation must arrange for video teleconferences to Iraq so that
    parents can still participate in the event. Families who purchased
    plane tickets for block leave trips back to the states must now seek
    refunds. Rear detachment personnel, family readiness volunteers and
    family center staff who were also looking forward to down time must now
    work harder to ensure that support is available for families in their
    charge.

    Joint Family Support: An Idea Whose Time Has Come
        NMFA applauds the increase in joint coordination to improve family
    readiness that has occurred over the past few years. As the military
    becomes more ``joint,'' it makes sense to use a joint approach to
    family support, providing consistent information and using scarce
    personnel and other resources to the best advantage. A start in
    improved joint family readiness support has been DOD's establishment of
    a common web portal with links to military Service, private
    organization, and other useful government sites
    (www.deploymentconnections.org). All active and reserve component
    personnel and their families can now access the ``One Source'' 24-hour
    information and referral service. One Source provides information and
    assistance, not just for post-deployment concerns, but also in such
    areas as parenting and child care, educational services, financial
    information and counseling, civilian legal advice, elder care, crisis
    support, and relocation information. The service is available via
    telephone, e-mail, or the web and is designed to augment existing
    Service support activities and to link customers to key resources, web
    pages and call centers. It is also available to family center staff,
    many of whom tell NMFA that they regard it as a useful tool to expand
    the assistance they can provide families. One Source is operated for
    the military Services by a civilian company that provides similar
    Employee Assistance Programs for private industry. Early statistics on
    use indicate that servicemembers and families are accessing One Source
    primarily for everyday issues and basic information about military
    life. Military families who use One Source, including spouses who
    testified before the House Military Construction Appropriations
    Subcommittee in February, are pleased with the support and information
    provided.
        While NMFA believes One Source is an important tool for family
    support, it is not a substitute for the installation-based family
    support professionals or the Family Assistance Centers serving Guard
    and Reserve families. NMFA is concerned that in a tight budget
    situation, family support staffing might be cut under the assumption
    that the support could be provided remotely through One Source. The One
    Source information and referral service must be properly coordinated
    with other support services, to enable family support professionals to
    manage the many tasks that come from high optempo. The responsibility
    for training rear detachment personnel and volunteers and in providing
    the backup for complicated cases beyond the knowledge or comfort level
    of the volunteers should flow to the installation family center or
    Guard and Reserve family readiness staff. Family program staff must
    also facilitate communication and collaboration between the rear
    detachment, volunteers, and agencies such as chaplains, schools, and
    medical personnel.
        NMFA applauds the various initiatives designed to meet the needs of
    servicemembers and families wherever they live and whenever they need
    them and requests adequate funding to ensure continuation both of the
    ``bedrock'' support programs and implementation of new initiatives.
    Higher stress levels caused by open-ended deployments require a higher
    level of community support. Family readiness responsibilities must be
    clearly delineated so that the burden does not fall disproportionately
    on volunteers.

    Education for Military Children
        A significant element of family readiness is an educational system
    that provides a quality education to military children, recognizing the
    needs of these ever-moving students and responding to situations where
    the military parent is deployed and/or in an armed conflict. 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. The military member deployed to that
    dangerous place cannot afford to be distracted by the worry that his or
    her child is not receiving a quality education. Addressing the needs of
    these children, their classmates, and their parents 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.
        NMFA is pleased to report that most schools charged with educating
    military children have stepped up to the challenge. They are the
    constant in a changing world and the place of security for military
    children and their families. The goal, according to one school
    official, ``is to keep things normal for the kids.'' The schools' role
    is to ``train teachers in what to look for and deal with what they
    find.'' NMFA received many positive stories from parents and schools
    about how the schools have helped children deal with their fears, keep
    in touch with deployed parents, and keep focused on learning. We have
    also heard stories of schools helping each other, of schools
    experienced in educating military children and dealing with deployment-
    related issues providing support for school systems with the children
    of activated Guard and Reserve members. In the process, many schools
    have increased the understanding of their teachers and other staff, as
    well as their entire communities, about issues facing military
    families.
        The Department of Defense is supporting this effort in several
    significant ways. Late last year, DOD launched a new education website
    (www.militarystudent.org) to provide information on a variety of
    education topics to parents, students, educational personnel, and
    military commanders. Its information is especially valuable for schools
    and families dealing with the issues of deployment for the first time.
    NMFA is also pleased to report that other Services are following the
    Army's lead and hiring full-time School Liaison Officers at certain
    installations. The Army not only has School Liaison Officers at all
    locations, but has also expanded to provide these information services
    to the reserve components, recruiters and other remotely-assigned
    personnel and their families.
        NMFA applauds DOD initiatives to work with states to ease
    transition issues for military children and to ensure that military
    leaders and school officials are working together to provide high
    quality education for all their community's children. Hawaii's
    education officials are working closely with the Pacific Command
    through the Joint Venture Education Forum (JVEF). The JVEF has helped
    officials target Impact Aid and DOD supplement funding where most
    needed, marshaled military support to improve school facilities and
    sponsor school programs, conducted training sessions about the military
    for school personnel, and established model peer mentoring programs
    where students can help incoming military children acclimate to their
    new school. We believe such coordination between the military and the
    state and local entities charged with educating military children will
    bring an increased awareness to civilian neighborhoods about the value
    the military brings to their communities. To the military Services,
    this collaboration will bring a better awareness of the burden being
    shouldered by local taxpayers to educate military children. To military
    children and their parents, this collaboration shows that quality
    education is a shared priority between the Department of Defense and
    their local schools.
        NMFA is appreciative of the support shown by Congress for the
    schools educating military children. It has consistently supported the
    needs of the schools operated by the DOD Education Activity (DODEA),
    both in terms of basic funding and military construction. Congress has
    also resisted efforts by a series of administrations to cut the Impact
    Aid funding so vital to the civilian school districts that educate the
    majority of military children. NMFA is also appreciative of the
    approximately $30 million Congress adds in most years to the Defense
    budget to supplement Impact Aid for school districts whose enrollments
    are more than 20 percent military children and for the additional
    funding to support civilian school districts who are charged with
    educating severely disabled military children. NMFA does not believe,
    however, that this amount is sufficient to help school districts meet
    the demands placed on them by their responsibilities to serve large
    numbers of military children. Additional counseling and improvements to
    security are just two of needs faced by many of these school districts.
    NMFA requests this Subcommittee to increase the DOD supplement to
    Impact Aid to $50 million so that the recipient school districts have
    more resources at their disposal to educate the children of those who
    serve.

    DODEA
        Department of Defense schools are located in overseas locations
    (DODDS) and on a small number of military installations in the United
    States (DDESS). The commitment to the education of military children in
    DOD schools between Congress, DOD, military commanders, DODEA
    leadership and staff, and especially military parents has resulted in
    high test scores, nationally-recognized minority student achievement,
    parent involvement programs and partnership activities with the
    military community. This partnership has been especially important as
    the overseas communities supported by DODDS and many of the
    installations with DDESS schools have experienced high deployment
    rates. DOD schools have responded to the operations tempo with
    increased support for families and children in their communities.
        While DOD schools have been immune from some of the constraints
    besetting civilian schools affected by state and local budget
    pressures, military families served by DOD schools have expressed
    concerns in recent years about DOD rescissions that cause cuts in
    maintenance, staff development, technology purchases and personnel
    support and also forced the elimination of some instructional days in
    some districts. NMFA is hearing concerns that DODDS will not be able to
    fund summer school this summer. Given the high deployment levels and
    deployment extensions affecting some communities in Europe, we know
    that children will need this opportunity for learning and involvement
    with their peers more than ever. We ask that Congress work with DOD to
    ensure DOD schools have the resources they need to handle their
    additional tasks.
        NMFA also asks this Subcommittee to understand the importance
    military parents attach to schools that educate their children well.
    DOD is currently preparing a Congressionally-requested report to
    determine whether it could turn some DDESS districts over to
    neighboring civilian education agencies. While NMFA does not object to
    the concept of a report to determine whether school systems are
    providing a quality education, using tax dollars well, or are in need
    of additional maintenance or other support funding, we are concerned
    about the timing of the study and the reaction it has caused in
    communities already dealing with the stress of the war and deployments.
    Families in these communities wonder why something that works so well
    now seems to be threatened. NMFA attended an October 2003 community-
    input forum sponsored by the Director of DODEA. We were impressed not
    just with the strong support commanders and other community leaders
    gave to these schools, but also with the efforts they had made to reach
    out to local civilian schools to improve education for all military
    children.
        NMFA applauds the DOD vision that the Department focus on quality
    education for all military children. We have stated for years that DOD
    needs to do more to support civilian school districts educating most of
    the 85 percent of military children who do not attend DOD schools. We
    believe, however, that shifting children from highly successful,
    highly-resourced DOD schools to neighboring districts may cause more
    harm than good to both military children and their civilian peers.
    Adding to the stress in military communities also harms the education
    of military children. NMFA does not know what DOD's final
    recommendations will be. We encourage Members of Congress to study
    those recommendations closely before making any decision that could
    damage the educational success the DDESS schools have achieved.
        Schools serving military children, whether DOD or civilian schools,
    need the resources available to meet military parents' expectation that
    their children receive the highest quality education possible. Because
    Impact Aid from the Department of Education is not fully funded, NMFA
    recommends increasing the DOD supplement to Impact Aid to $50 million
    to help districts better meet the additional demands caused by large
    numbers of military children, deployment-related issues, and the
    effects of military programs and policies such as family housing
    privatization. Initiatives to assist parents and to promote better
    communication between installations and schools should be expanded
    across all Services. Military children must not be placed at a
    disadvantage as State and Federal governments devise accountability
    measures.

    Strong Families Ensure a Strong Force
        Mr. Chairman, NMFA is grateful to this Subcommittee for ensuring
    funding is available for the vital quality of life components needed by
    today's force. As you consider the quality of life needs of
    servicemembers and their families this year, NMFA asks that you
    remember that the events of the past 2\1/2\ years have left this family
    force drained, yet still committed to their mission. Servicemembers
    look to their leaders to provide them with the tools to do the job, to
    enhance predictability, to ensure that their families are cared for,
    their spouses' career aspirations can be met, and their children are
    receiving a quality education. They look for signs from you that help
    is on the way, that their pay reflects the tasks they have been asked
    to do, and that their hard-earned benefits will continue to be
    available for themselves, their families, and their survivors, both now
    and into retirement.

        Senator Stevens. Well, we travel a lot and we find the
    results of your work, and we thank your family association very
    much for what you are doing in really bringing to the families
    knowledge of what we are trying to do and what we have been
    able to achieve. So we will examine your statement in greater
    detail and we thank you very much for the statement.
        Senator Inouye.
        Senator Inouye. Well, I agree with the chairman that a
    strong family system equals a strong military.
        Ms. Raezer. Thank you, Mr. Chairman, and thank you, Senator
    Inouye.
        Senator Stevens. Our next witness is retired Captain
    Marshall Hanson of the United States Navy Reserve, Chairman of
    the Association for America's Defense.
        Oh, pardon me. I am reading the wrong one. We will go to
    Melanie K. Smith, Director of the Lymphoma Research Foundation.
    You are next. Sorry about that.

    STATEMENT OF MELANIE K. SMITH, DIRECTOR, PUBLIC POLICY
                AND ADVOCACY, LYMPHOMA RESEARCH FOUNDATION
        Ms. Smith. Thank you. Mr. Chairman and Senator Inouye, it
    is my pleasure to appear before you today to request that you
    expand the congressionally directed medical research program to
    include research on the blood cancers. I am Melanie Smith,
    Director of Public Policy and Advocacy for the Lymphoma
    Research Foundation (LRF), a voluntary health agency that funds
    lymphoma research and provides education and support services
    to individuals with lymphoma and their families and friends. On
    behalf of LRF, thank you for the opportunity to testify today.
        This subcommittee is to be commended for its leadership in
    funding special research programs at the Department of Defense
    with a particular emphasis on cancer research. We realize that
    at the time that 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 (NIH) and that are hailed by patient
    advocates because they allow meaningful consumer input in the
    planning of the research portfolio and their view of research
    proposals.
        We understand that the subcommittee is carefully evaluating
    the congressionally directed medical research program (CDMRP)
    and has asked the Institute of Medicine to consider options for
    expanding the funding of these research ventures potentially
    through public-private partnerships. In light of this
    evaluation and the difficult Federal budget situation, it may,
    on first consideration, seem illogical for LRF to propose an
    expansion of CDMRP. However, we think that an investment in
    blood cancer research will complement and strengthen the
    existing blood cancer program at CDMRP and that the benefits of
    a blood cancer research program will far exceed the financial
    commitment to it.
        We make this bold statement based on the history of cancer
    research and treatment. We believe that directing funds to
    blood cancer research will yield benefits not only for blood
    cancer patients but also for patients that have been diagnosed
    with solid tumors. Advances in the treatment of the blood
    cancers have generally been of direct benefit to those with
    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 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 are thought to
    be responsible for cell proliferation began in the blood
    cancers but are now thought to hold promise for breast,
    prostate, ovarian, and other forms of cancer.
        Each year approximately 110,000 Americans are diagnosed
    with one of the blood cancers. More than 60,000 will die in
    2004 and 700,000 Americans are living with these cancers. Taken
    as a whole, the blood-related cancers are the fifth most common
    cancer behind lung, breast, prostate, and colorectal cancer.
        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 the responsibility to make
    recommendations about Veterans Administration 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.
        In fiscal years 2002, 2003, and 2004, the subcommittee
    funded a research program at the Department of Defense that
    supports 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 $15 million over
    the last 3 years, be continued and that a parallel initiative
    be launched that would fund all other types of blood cancer
    research or that the CML program be expanded to fund research
    on all forms of blood cancer, perhaps with a special set-aside
    for CML.
        We believe that an investment of $16 million in a new blood
    cancer research program would have the potential to enhance our
    understanding of the blood cancers, viral and environmental
    links to these diseases and contribute to the development of
    new treatments.
        The subcommittee can strengthen the overall CDMRP cancer
    research efforts and contribute to development of new
    treatments for people with a blood cancer and those with solid
    tumors. We believe an investment in blood cancer research would
    be a wise one.
        We greatly appreciate the opportunity to present this
    proposal to you today. Thank you.
        Senator Stevens. Thank you very much.
        Questions, Senator?
        Senator Inouye. No.
        Senator Stevens. Thank you very much.
        Ms. Smith. Thank you.
        [The statement follows:]

                     Prepared Statement of Melanie K. Smith

        Mr. Chairman and Members of the Subcommittee, it is my pleasure to
    appear before you today to request that you expand the Congressionally
    Directed Medical Research Program to include research on the blood
    cancers. I am Melanie Smith, Director of Public Policy and Advocacy of
    the Lymphoma Research Foundation (LRF), a voluntary health agency that
    funds lymphoma research and provides education and support services to
    individuals with lymphoma and their families and friends.
        This Subcommittee is to be commended for its leadership in funding
    several special research programs at the Department of Defense (DOD),
    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 meaningful consumer
    input in the planning of the research portfolio and the review of
    research proposals.
        We understand that the Subcommittee is carefully evaluating the
    CDMRP and has asked the Institute of Medicine (IOM) to consider options
    for expanding the funding of these research ventures, potentially
    through public-private partnerships. In light of this evaluation and
    the difficult federal budget situation, it may on first consideration
    seem illogical for LRF to propose an expansion of CDMRP. However, we
    think that an investment in blood cancer research will complement and
    strengthen the existing blood cancer programs at CDMRP and that the
    benefits of a blood cancer research program will far exceed the
    financial commitment to it.
        We make this bold statement based on the history of cancer research
    and treatment. We believe that directing funds to blood cancer research
    will yield benefits not only for blood cancer patients but also for
    patients that have been diagnosed with solid tumors. Advances in the
    treatment of the blood cancer have generally been of direct benefit to
    those with 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 strategy of
    combining chemotherapy with radiation therapy began in the treatment of
    Hodgkin's disease and is now wisely 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 that are thought to be responsible for cell proliferation,
    began in the blood cancers but are now thought to hold promise for
    breast, prostate, ovarian, and other forms of cancer. Research on the
    blood cancers has also contributed to knowledge about staging cancer,
    as the concept of cancer staging to accurately define disease severity
    and target appropriate therapy began in lymphoma and is now used in all
    cancers.
        We believe that there are additional facts that justify a DOD
    investment in blood cancer research, including the potential links
    between military service and development of certain blood cancers. For
    example, exposure to Agent Orange has been associated with blood
    cancers. Possible exposures to other toxins might also be linked to
    development of blood cancers, and an enhanced blood cancer research
    program will help us understand these links.
        In the remainder of my statement, I will briefly provide additional
    information about the blood cancers, research on the possible causes of
    these cancers, and the benefits of expanding the current leukemia
    research program to include all blood cancers.

    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
    2004, 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 this drug
    is also approved for use in gastrointestinal stromal tumor (GIST). Two
    new radioimmunotherapies have been approved for patients with
    refractory NHL, and a new proteasome inhibitor for treating multiple
    myeloma was approved in 2003. These treatments represent progress in
    the fight against the blood cancers, but there is much work still to be
    done.
        Although there have recently been 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. A DOD
    program could accelerate the achievement of this goal and may also
    benefit survivors with other forms of cancer.
    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 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 suffer from
    those cancers as a result of service-connected exposure.

    The Current DOD Chronic Myelogenous Leukemia Program
        In fiscal year 2002, fiscal year 2003, and fiscal year 2004, the
    Subcommittee funded a research program at DOD that supports 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 $15 million over the
    last three years, be continued and that a parallel initiative be
    launched that would fund all other types of blood cancer research, or
    that the CML program be expanded to fund research on all forms of blood
    cancer, perhaps with a special set-aside for CML.
        We believe that an investment of $16 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 the development 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 Subcommittee can, through a modest enhancement of the existing
    CDMRP, strengthen the overall CDMRP cancer research effort and
    contribute to development of new treatments for people with a blood
    cancer and those with solid tumors. In an age of severe fiscal
    constraints, the Subcommittee is understandably reluctant to increase
    its commitment to the CDMRP. However, an investment in blood cancer
    research would be a wise one.
        We appreciate the opportunity to present this proposal to you and
    would be pleased to answer your questions.

        Senator Stevens. Our next witness is Captain Marshall
    Hanson.

    STATEMENT OF CAPTAIN MARSHALL HANSON, UNITED STATES
                NAVAL RESERVE (RET.), CHAIRMAN,
                ASSOCIATIONS FOR AMERICA'S DEFENSE (A4AD)
        Mr. Hanson. Good morning, Mr. Chairman, Senator Inouye. The
    Associations for America's Defense are very grateful to testify
    today.
        A4AD looks at national defense, equipment, force structure,
    funding and policy issues, not normally addressed by the
    military support community. We would like to thank this
    committee for the on-going stewardship on issues of defense. At
    a time of war, its pro-defense and non-partisan leadership sets
    the example.
        Support for our deployed troops in Iraq and Afghanistan are
    of primary importance and warrant top priority. A4AD would like
    to highlight some areas of emphasis.
        As a Nation we need to be supplying our troops with the
    initial issue equipment needed in training and later in combat.
    A well-equipped soldier or marine is better prepared. Our
    associations are pleased with improvements in personnel
    protection over the past year. We credit both Congress and DOD
    leadership with increased armor protection provided soldiers in
    combat. Yet, troops preparing for Iraq are being given empty
    vests in which to train. Every soldier, Guardsmen or marine
    should receive an armored vest with initial issue, allowing
    them to go through basic and advanced combat training in full
    battle attire.
        Good protection goes beyond steel and Kevlar. U.S. ground
    forces are under attack from improvised explosive devices (IED)
    on a routine basis. Countermeasure technology is available and
    should be funded to provide protection from attacks by jamming
    the electronic signals that detonate IED's.
        From 1984-2001, 90 percent of worldwide combat aircraft
    losses were attributable to shoulder fired missiles. Aircraft
    have proven vulnerable in Iraq. Funding should be made
    available for the next generation of electronic aircraft
    survival equipment to reduce the risk to personnel and
    equipment.
        The Pentagon is recommending the repeal of separate budget
    requests for procuring Reserve equipment. A combined equipment
    appropriation for each service will not guarantee needed
    equipment for the National Guard and Reserve components. We ask
    this committee to continue to provide appropriations against
    unfunded National Guard and Reserve equipment requirements.
    Included in our written testimony is a list of unfunded
    equipment for the Reserve components and the National Guard.
        Equipment is only as good as the people who use it. A4AD
    believes the administration and Congress must make it a high
    priority to maintain, if not increase, end strengths of already
    overworked military forces.
        The associations have additional concerns on how the Guard
    and Reserve are being utilized by the Pentagon and see a move
    away from the traditional mission of the Guard and Reserves to
    an operational part-time fighting force. A congressionally
    mandated comprehensive review of current Guard and Reserve
    roles and missions, and the proposed realignment of both the
    Army and Navy is needed, before these forces are hollowed out.
        We would like to thank you for your ongoing support of the
    Nation, the armed services, and the fine young men and women
    who defend our country. I stand by for questions, and feel free
    in the future to contact us if you have any additional
    concerns.
        Senator Stevens. Well, we do thank you for your emphasis
    and we are trying to really reach the same goals you have
    outlined. I am not sure we have the money to do it all, but we
    thank you very much for your suggestions.
        Senator.
        Senator Inouye. I agree with you, sir, and I think we have
    reached that 4 percent minimum when you add the supplemental in
    there. But we will do our best.
        Mr. Hanson. Thank you.
        Senator Stevens. Thank you very much.
        [The statement follows:]

                     Prepared Statement of 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 eleven 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.
        Association of Old Crows, Enlisted Association National Guard 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, and 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 on-going stewardship that it has demonstrated on
    issues of Defense. At a time of war, 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 related issues for the Armed Forces.
    Initial Issue Combat and Personnel Protection
        Initial Issue.--Unfunded requirements remain. It includes the
    following items: Small Arms, Protective Inserts (SAPI), Outer Tactical
    Vests (OTV), Individual Load Bearing equipment (ILBE), All Purpose
    Environmental Clothing System (APECS), Lightweight Helmet (LWH),
    Modular General Purpose Tent System, Modular Command Post System,
    Lightweight Maintenance Enclosures, and Ultra Light Camouflage Net
    System. These help in training, and later in combat.
        General Property and Support equipment.--Sun, wind and dust
    goggles, mosquito netting, field showers, field tarps and multi-faith
    chaplain's kits. Upgrade from the M16A2 service rifle to the M4 Carbine
    should continue as it is a lighter and better version of the M-16.
    Lightweight, Air-Mobile, Rapid Deployable, Hard-Wall Shelter (HELAMS)
    are a lightweight, self-deployable, hard-wall mobile shelter. Lessons
    learned from Operation Iraqi Freedom show that tents did not perform
    well in the hostile environment of the desert.
        Personnel Protection.--Gen. Michael Hagee, the Marine Corps
    commandant, and Gen. Peter Schoomaker, the Army chief of staff, said
    that they are working together to provide the best possible protection
    for their personnel who will be taking over the dangerous security and
    stability duties in Iraq.
        General Schoomaker is supplying the Interceptor body armor to about
    three-fourths of the U.S. troops heading to Iraq, and plans to have the
    interceptor body armor now over there in sufficient numbers for
    everybody else. All of the protective gear will be kept in the combat
    zone to supply all active Army, National Guard and Army Reserve
    personnel in Iraq and Kuwait. The Marine Corps' requirements are
    included in these numbers.
        General Hagee said that the 25,000 Marines who went into Iraq will
    have about 3,000 hardened trucks and Humvees, including those provided
    by the Army. General Shoomaker has also shared that there are three
    assembly sites in Iraq and Kuwait, which is retrofitting Humvees and
    trucks with armor plating.
        Position Statement.--The A4AD associations are pleased with
    improvements in personnel protection over the past year. We credit both
    the Congressional and DOD leadership with increased quantities in body
    armor, armoring kits and hardened vehicles.
        A4AD would like to highlight a continued need for personnel
    protection. Procurement needs to be expanded to include troops that are
    stateside. Troops training for Iraq were given empty vests in which to
    train, without armored plates. Every soldier, guardsmen or marine
    should receive an armored vest with initial issue, permitting them to
    go through basic and advanced combat training in full battle attire.
    Hardened vehicles should be included in training because of different
    driving characteristics.
        It has been noted that all 8,400 armor kits should have been done
    by April 30th. On March 11, commanders on the ground in Iraq asked the
    Pentagon for another 856 add-on armor Humvee kits; 236 truck kits,
    including FMTVs; and 800 gun-truck armor kits. But Pentagon leaders
    have not addressed the request; because of funding concerns.
        Position Statement.--There will be no funding or requisitions for
    these additional armor kits after April 30th. Supplemental funding is
    needed for these additional requirements.
    Counter-measures to Improvised Explosive Devices
        Currently in Iraq, U.S. ground forces and our coalition allies are
    coming under attack from Improvised Explosive Devices (IED's) on a
    routine basis. These devices are cobbled together from unexploded
    ordinance or from explosives left behind after the collapse of the
    former regime. Many are activated while ground troops pass a particular
    point using radio signals generated from electronics as simple as a
    garage door opener or as sophisticated as a cellular telephone.
    Countermeasure technology is now available for installation on
    unarmored personnel carriers like Humvees to provide protection from
    attacks by jamming the electronic signals that detonate IED's.
        A limited quantity of this technology has been deployed, but this
    is not enough. All future procurement should require the installation
    of similar jamming technology to provide protection to ground forces
    now, and in future deployments. Additional research and development
    should be initiated immediately to enhance and expand the personal
    security benefits of this type of technology against similar future
    threats.
        Position Statement.--Immediate emphasis is needed for the
    procurement of sufficient quantities of countermeasures to protect
    every unarmored personnel carrier now deployed in the battle space.
    Aircraft Survivability Equipment
        Much media attention has been paid to the problem of air
    survivability for helicopters in Iraq and Afghanistan. In the past,
    Congress has examined the anti-missile defense systems that need to be
    retrofitted into many of our deployed helicopters.
        Position Statement.--With the cancellation of the Comanche
    helicopter program by the Army, it has been reported that funding for
    this program would be re-programmed toward reviewing, upgrading and
    installing countermeasure protections on Army helicopters. Congress
    should quickly approve this request.
        From 1984-2001, ninety percent of worldwide combat aircraft losses
    were attributable to Shoulder Fired Missiles. Also called MANPAD (Man
    Portable Air Defense Systems), these are most often heat-seeking
    missiles, employing sensors that home in on the airplane's infrared
    signature, likely the engine. Their ability to accurately target
    aircraft from as far as 3 miles and as high as 20,000 feet makes them
    very difficult to protect against.
        Fixed wing aircraft are also flying in theatre: C-5s, C-9s, C-17s,
    C-40As and C-130s. Most military aircraft, including transports, are
    equipped with sensors that can detect incoming missiles and can drop
    flares to deflect the heat-seeking missiles or chaff to spoof those
    that are radar-guided.
        Approximately 50 percent of the Air Mobility Command fleet has
    anti-missile defensive systems. But 100 percent of AMC's C-17s (105
    aircraft), and 90 percent of the C-130s (approximately 500) are so
    equipped. The C-130, C-17 and C-5 fleets have flare-based
    countermeasures systems. Used in combat drops, the C-17's cockpit floor
    is sheathed with Kevlar to protect the pilots against ground fire. Only
    a handful of C-17s are being equipped with a new laser countermeasure
    system, called LAIRCM. Many C-130s have electronic warning receivers,
    using sensors in the nose and tail and chaff. The tanker fleets of KC-
    135s and KC-10s have no defensive systems.
        Because of the high power settings all transport jet aircraft are
    vulnerable to MANPADS when in approach or after take-off climb phase of
    flight.
        In January, an Air Force C-5 transport plane carrying 63 troops was
    struck by a surface-to-air missile as it left Baghdad Airport but
    managed to land safely. In December an Air Force C-17 cargo and troop
    transport plane was hit by a surface-to-air missile after takeoff from
    Baghdad with a crew of three and 13 passengers. Several unsuccessful
    attacks were made on C-103 aircraft in 2003.
        Chaff and flares typically are employed to deflect heat-seeking
    missiles. In Baghdad, flares are often fired in a precautionary mode
    when landing. Confidence in these basic missile defense systems is not
    absolute. Pilots are flying evasively to reduce further risk. ``High
    and fast'' is one tactic reported to minimize aircraft exposure to the
    ``bad guys''.
        New technologies and tactics utilized by non-traditional combatants
    have stretched the effectiveness of existing countermeasure systems for
    fixed and rotary wing aircraft in the battle space. Recent events in
    Iraq have demonstrated the vulnerability of our aircraft to attack from
    ground fire, rocket propelled grenades, and MANPADS, or shoulder-fired
    missiles.
        Advancements in technology allow upgrade missile defense systems.
    Newer ``aircraft survivability equipment,'' or ASE, can be described as
    integrated countermeasure dispensing systems that include detection
    equipment, threat adaptive computer, and deployable decoys. Another
    system includes a new laser countermeasure system; called LAIRCM where
    the computer guided intense light interferes with the missile guidance.
        These systems are designed to provide the capability of automatic
    or pilot commanded response, and works alone or in coordination with
    other countermeasures defensive systems to defeat Air Interceptor (AI),
    Anti-Aircraft Artillery (AAA), and Surface-to-Air Missiles (SAMs).
        The Army Guard is flying unarmed and unarmored twin engine
    aircraft, called the C-23 Sherpa and C-12 Hurons with passengers and
    cargo from Kuwait into Iraq. It is essentially a commercial airplane in
    a combat theater. The Sherpa crews are counting on installing defensive
    chafe and flare devices similar to those used on C-130s and designed to
    decoy a missile away from the target.
        Position Statement.--Congress should immediately fund the
    installation and/or upgrade of countermeasure systems in all fixed and
    rotary wing aircraft in the battle space to provide the greatest degree
    of protection for the U.S. warfighter.
        Anti-explosive foams.--Military aircraft can be as vulnerable as
    civilian airplanes to threats other than missiles. A tracer bullet into
    a fuel tank can have disastrous effects. One solution is to retrofit
    the aircraft fuel tanks with a foam lining that is anti-explosive. The
    density of the foam captures most projectiles, and fumes or fuel are
    protected from heat and spark. This is a low cost upgrade.
        Other protective measures.--IR suppression, ECM, fuel tank fire
    suppression, night vision lighting (NVL), DECM/CIRCM, aircraft, and
    aircrew personnel armor and self-defense, and paratroop door armor.
        Position Statement.--Appropriated monies should include simpler
    self-protective measures as well as more sophisticated. Aircraft
    survival is a full range package.
    Maintaining the National Guard and Equipment List
        In the recent authorization bill submission to Congress, the
    Department of Defense is requesting that National Guard and Reserve
    equipment accounts be merged with that of the parent service.
        A single equipment appropriation for each service would not
    guarantee that the National Guard and Reserve Components would get any
    new equipment. The National Guard and Reserve Equipment Account (NGREA)
    is vital to ensuring that the Guard and Reserve has some funding to
    procure essential equipment that has not been funded by the services.
    Dollars intended for Guard and Reserve Equipment might be redirected to
    Active Duty non-funded requirements.
        This action would essentially end Congressional support of Guard
    and Reserve equipment accounts and severely reduce its ability to
    ensure that National Guard and the Reserve Components receive adequate
    funding to perform their missions and maintain readiness. Neither the
    National Guard nor Reserve would have the funds to pay for equipment
    that has not been programmed by the parent services. This will lead to
    decreased readiness.
        This move is reminiscent of the attempt by DOD, last year, to
    consolidate all pay and O&M accounts into one appropriation per
    service. Any action by the Pentagon to circumvent Congressional
    oversight should be resisted.
        Position Statement.--We ask this committee to continue to provide
    appropriations against unfunded National Guard and Reserve Equipment
    Requirements. To appropriate funds to Guard and 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.
    Unfunded Equipment Requirements
        This last year, this working group provided input for equipment for
    both Active duty, and the Reserve and Guard. With the Armed Forces
    engaged in the Global War on Terrorism, it is not the time for debate
    on equipment needs for the regular forces.
        Position Statement.--Unfunded AD requirements have been submitted
    to Congress and should be supported at best levels.
        $6.0 billion for the Army, $2.5 billion for the Navy, $2.4 billion
    for the Air Force, and $1.3 billion for the Marine Corps.
        Reserve Component requirements are provided for the major four of
    the uniformed services. The services are not listed in priority order.
                Top Guard and Reserve Equipment Requirements:

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                     Amount
    ------------------------------------------------------------------------
    Air Force Reserve:
        C-40's Medivac [replaces aging C-9A] (4).................      261.3
        Large aircraft I/R Counter Measures......................       42.9
        B-52 Litening II Targeting Pod...........................        7.8
        A-10 Litening Targeting Pod..............................       37.7
        C-130 APN-241 Radars.....................................       38.9
    ------------------------------------------------------------------------

        Litening ER is a self-contained, multisensor laser target
    designating and navigation system that enables pilots to detect and
    identify ground targets for highly accurate delivery of both
    conventional and precision-guided weapons.

                            [In millions of dollars]
    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Air Guard:
        C-17's (per aircraft)...............................             184
        C-40C Special Mission Aircraft (1)..................              65
        Fire Vehicle Replacements (per year)................              15
        Patient Decontamination Assemblages.................             3.4
        Regional Equipment Operators Training Site..........              12
    Army Reserve:
        Light Medium Tactical Vehicles [LMTV] (600).........              92
        Medium Tactical Vehicles [MTV] (800)................             146
        Movement Tracking System [MTS] (2005)...............              25
        Multi-band Super Hi Frequency [SHF] Terminal (38)...             114
        High Frequency [HF] Radio (1,255)...................              53
        All Terrain Lifting Army System [ATLAS] (100).......              10
    Army Guard:
        High Mobility Multi-Purpose Wheeled Vehicle (HMMWV).  ..............
        Single Channel Ground Air Radio System (SINCGARS)...  ..............
        Heavy Expanded-Mobility Tactical Truck (HEMTT)......  ..............
        Family of Medium Tactical Vehicles (FMTV)...........  ..............
        Military Tactical Generator Sets....................  ..............
    Reserve Marine Corps:
        F/A-18 ECP--583 Upgrade (combined AD/RC)............              63
        CH-53E HNVS ``B'' Kits (Forward Looking Infrared)               46.2
         (combined AD/RC)...................................
        Initial Issue equipment.............................              10
        General Property and Support Equipment..............               3
        Depot Level Maintenance Program.....................             6.4
    Naval Reserve:
        Littoral Surveillance System, LSS coastal defense                 19
         (1)................................................
        Naval Coast Warfare Boats (28)......................              45
        P-3C AIP Kits (2)...................................              29
        F/A-18 ECP-560 Upgrades (8).........................              24
        C-40 A Inter-theater Transport (2)..................             130
        C-130 Propeller Upgrade Modification Program [PUMP]   ..............
         and ground tools...................................
    ------------------------------------------------------------------------

    Reserve Commission/Comprehensive Review of the Guard and Reserve
        A number of the services are reviewing and suggesting major changes
    to their Reserve Component. A4AD is concerned that ongoing manpower
    reviews are being budget driven where the bottom line dollar will
    undercut effective mission accomplishment. The Active Duty services are
    anxious to ``transform'' their Reserve without Congressional oversight.
        Position Statement.--If our Active Duty leadership makes
    unfortunate choices, there is a potential of unnecessary Defense costs
    for Congress to remedy. A Congressional mandated comprehensive review
    of the current Guard and Reserve issues, roles and missions, along with
    realignment and integration plan of both the Army and Navy is very much
    needed. We believe that the best way to address these issues is through
    a Congressionally mandated Commission on Guard and Reserve
    Transformation Issues for the 21st Century.
    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, within DOD there is subtle pressures are to be found
    encouraging personnel cuts.
        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. If the current Active Duty end strength was adequate, the demand
    for Reserve and Guard call-up would not be so urgent.
        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.
        Position Statement.--End strengths need to be closely examined by
    both the House and Senate as a first step in addressing this situation.
    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.
        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.
        Position Statement.--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.
                                   conclusion
        A core of military and veteran associations is 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.
    Please contact us with any questions.

        Senator Stevens. Our next witness is David Evans from
    Illinois Neurofibromatosis. Thank you.
    STATEMENT OF DAVID EVANS ON BEHALF OF ILLINOIS
                NEUROFIBROMATOSIS, INC.
        Mr. Evans. Thank you, Mr. Chairman and Senator Inouye, for
    this opportunity to appear before you today to present this
    testimony to the subcommittee on the importance of continued
    funding for neurofibromatosis, NF, a terrible genetic disorder
    associated with military purposes and closely linked to common
    diseases widespread among the American population.
        I am David Evans representing Illinois Neurofibromatosis,
    Inc., which is a participant in our national coalition of NF
    advocacy groups. I have lived with NF my entire life. Although
    I have not suffered any of NF's more severe symptoms, I have
    experienced rude comments and harassment my entire life. On
    July 4, 1996, I was threatened with arrest if I would not leave
    a water park in Crestwood, Illinois. After other patrons
    complained to the owner, he informed me that I looked terrible
    and should wear a shirt or leave. I explained NF to him and
    assumed the matter was settled. Later, however, he brought in
    the police and I was forced to leave. As a result of this
    experience, I have become active in Illinois NF, Inc. and have
    been on the board of directors since 1997.
        NF is a genetic disorder involving uncontrolled growth of
    tumors along the nervous system which can result in terrible
    disfigurement, deformity, deafness, blindness, brain tumors,
    cancer, and death. NF can also cause abnormalities such as
    unsightly benign tumors across the entire body and bone
    deformities. In addition, one-half of the children with NF
    suffer from learning disabilities. It is the most common
    neurological disorder caused by a single gene. While not all NF
    patients suffered 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 disorder.
        Approximately 100,000 Americans have NF. It appears
    approximately in 1 every 3,500 births and strikes worldwide
    without regard to gender race or ethnicity. It is estimated
    that 50 percent of the new cases result from 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. NF research will benefit
    over 150 million Americans in this generation alone because NF
    has been directly implicated in many of the most common
    diseases affecting the general population.
        NF research is directly linked to military purposes because
    NF is closely linked to cancer, brain tumors, learning
    disabilities, heart disease, brain tissue degeneration, nervous
    system degeneration, deafness, and balance. Because NF
    manifests in the nervous system, this subcommittee in past
    report language has stated that the 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 NF may be relevant to
    understanding Gulf War Syndrome and to gaining a better
    understanding of wound healing. Today NF research includes
    important investigations into genetic mechanisms which involve
    not just the nervous system but also other cancers.
        Recognizing NF's importance to both the military and the
    general population, Congress has given the Army's NF research
    program strong bipartisan support. The Army program funds
    innovative, groundbreaking research which would not otherwise
    have been pursued and has produced major advances in NF
    research. 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 alone. Unfortunately, despite
    this increase, the number of awards has remained relatively
    constant over the past couple of years, resulting in many
    highly qualified applications going unfunded.
        Because of the enormous advances that have been made as a
    result of the Army's NF research, research in NF has truly
    become one of the great success stories in the current
    revolution of molecular genetics, leading one major researcher
    to conclude that more is known about NF genetically than any
    other disease. Accordingly, many medical researchers believe NF
    should serve as a model to study all diseases.
        Mr. Chairman, the Army's highly successful NF research
    program has shown tangible results and direct military
    application with broad implications for the general public. Now
    in that critical area of clinical translation research,
    scientists closely involved with the Army program have stated
    that the number of high quality scientific applications justify
    a much larger program. Therefore, increased funding is now
    needed to take advantage of promising avenues of investigation
    to continue building on the success of this program and to fund
    translational research, thereby continuing the enormous return
    on the taxpayers' investment.
        I am here to respectfully request an appropriation of $25
    million in the fiscal year 2005 Department of Defense
    appropriations bill for the Army neurofibromatosis research
    program. This is a $5 million increase over the fiscal year
    2004 funding level of $20 million.
        Thank you for your support of this program and I appreciate
    this opportunity to testify to the subcommittee.
        Senator Stevens. Would you please provide for the record
    the monies received for NF from any other Government source
    such as NIH? We would appreciate it.
        Mr. Evans. From NIH?
        Senator Stevens. Will you also provide for the record--I
    want it for the record, not now, thank you.
        Mr. Evans. Okay, we will provide that to you.
        Senator Stevens.--how many members of the armed services
    have NF.
        Mr. Evans. Although we know there are members of the armed
    services, we do not have a number.
        Senator Stevens. Senator Inouye.
        Senator Inouye. No questions.
        Senator Stevens. Thank you very much.
        Mr. Evans. Thank you.
        [The information follows:]

                       Prepared Statement of David Evans

        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
    too many common diseases widespread among the American population.
        I am David Evans, representing Illinois Neurofibromatosis, Inc.,
    which is a participant in a national coalition of NF advocacy groups. I
    have lived with NF my entire life. Although I have not suffered any of
    NF's severe symptoms, I have experienced the social problems caused by
    being afflicted with NF. I have endured rude comments and harassment my
    entire life. On July 4, 1996 I was threatened with arrest if I would
    not leave a water park in Crestwood, Illinois. After other patrons
    complained to the owner; he informed me that I looked ``terrible'' and
    should wear a shirt or leave. I explained NF to him and assumed the
    matter was settled. Later however, he brought in the police and I was
    forced to leave. As a result of this experience I became active in
    Illinois NF, Inc. and have been on the board of directors since 1997.
        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. NF research will
    benefit over 150 million Americans in this generation alone because NF
    has been directly implicated in many of the most common diseases
    affecting the general population.
    NF's Connection to the Military
        NF research is directly linked to military purposes because NF is
    closely linked to cancer, brain tumors, learning disabilities, heart
    disease, 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 2004, this funding has amounted to $130.3 million,
    in addition to the original $8 million appropriation in fiscal year
    1992. Between fiscal year 1996 and fiscal year 2003, 361 proposals were
    received, of which 119 awards have been granted to researchers across
    the country. The Army program funds innovative, groundbreaking research
    which would not otherwise have been pursued, and has produced major
    advances in NF research, such as the development of advanced animal
    models, preclinical therapeutic experimentation 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
    alone. Unfortunately, despite this increase, the number of awards has
    remained relatively constant over the past couple of years resulting in
    many highly qualified applications going unfunded.
        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 2005 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.
        I am here today to respectfully request an appropriation of $25
    million in your fiscal year 2005 Department of Defense Appropriations
    bill for the Army Neurofibromatosis Research Program. This is a $5
    million increase over the fiscal year 2004 level of $20 million.
        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 me 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 present this testimony to the Subcommittee.
                                     ______

                                                          May 17, 2004.
    Senator Ted Stevens,
    Chairman, Senate Appropriations Subcommittee on Defense, 119 Dirksen
            Senate Office Building, Washington, DC 20510.
        Dear Chairman Stevens: Thank you for the opportunity to testify
    before the Senate Appropriations Subcommittee on Defense regarding the
    Army's Neurofibromatosis Research Program (NFRP). Neurofibromatosis
    (NF) is a terrible genetic disorder directly associated with military
    purposes and closely linked to many common diseases affecting
    approximately 150 million Americans.
        As I discussed in my testimony, Neurofibromatosis (NF) research is
    directly linked to military purposes because it is closely linked to
    cancer, brain tumors, learning disabilities, memory loss, brain tissue
    degeneration and regeneration, nervous system degeneration and
    regeneration, deafness, balance and healing after wounding. Indeed, the
    House Defense Appropriations Subcommittee in a prior year underscored
    the importance of NF research to the military by stating in Report
    Language 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, and is important to gaining a better understanding of
    wound healing.
        As a result of the huge success of the highly acclaimed NFRP,
    researchers are now engaged in translational research which will
    directly benefit the military, NF patients and close to 150 million
    Americans in the general population who suffer from NF's many related
    disorders.
        Most importantly, the Army's NFRP does not fund the same kind or
    level of research as NIH. Rather the Army's NF medical research program
    funds much more aggressive, higher risk and innovative research from
    which the real breakthroughs in science come, including funding NF's
    first clinical trials, therapeutic experimentation, development of
    advanced mouse models, natural history studies as well as encouraging
    the development of consortia and bringing researchers from other fields
    into NF research. To ensure coordination and avoid duplication or
    overlap, the director of NF research at NINDS sits on the Army's
    Integration Panel for NF as have other NIH officials in the past.
        The NFRP has been widely acclaimed by the NF research community,
    and just in the past year, it received nearly 60 percent more
    applications than the year before. Thanks to the NFRP, we are now at
    the threshold of treatments and a cure for this devastating illness and
    its related disorders. There is no question that the Army NF Program
    has accelerated the rate of progress by many years and has resulted in
    research advances that otherwise might never have occurred. 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.
        Neurofibromatosis (NF) is really two genetically distinct
    disorders. Both disorders affect males and females equally and people
    of all races and ethnic groups. Half of the people with NF do not have
    a family history of the disorder. Neurofibromatosis type 1 (NF-1),
    which is the most common, affects 1 in 4,000 births. Neurofibromatosis
    type 2 (NF-2) affects 1 in 40,000.
        In order to ensure maximum efficiency, the Army coordinates and
    collaborates closely with other federal agencies that are involved in
    NF research, such as the National Institutes of Health (NIH) and the
    Department of Veterans Affairs (VA). In fiscal year 2004 approximately
    $19.4 million went to complimentary NF Research at the various
    institutes at NIH, including NCI ($5.6 million), NINDS ($6.3 million),
    NICHD ($0.8 million), NEI ($0.3 million), NIDCD ($2.0 million), NHGRI
    ($3.8 million), NCRR ($0.4 million), and NHLBI. This funding however,
    typically funds more traditional, less innovative and more basic
    orientated research than the Army Program.
        Recognizing the importance of the NFRP to military and civilian
    populations, as well as its strong track record in advancing NF
    research on a limited budget, Congress has consistently funded the NFRP
    over the past decade, rising to a level of $20 million in fiscal year
    2004. The program enjoys bipartisan support, including strong support
    in the House of Representatives and the Senate.
        The Army's Congressionally Mandated NF Research Program (NFRP) has
    furnished the figures of 124 cases of NF reported in 2003 and 731
    seeking treatment among all Services active duty military and their
    dependents during the last 10 years. However, the number of cases of
    known NF in the military is really not the issue but rather, the
    enormous implications advances in NF research have for direct military
    purposes such as healing after wounding, brain tissue regeneration,
    memory loss, nerve tissue regeneration, balance problems, hearing loss,
    blindness, as well as its direct connection to cancer, brain tumors,
    heart disease and cognitive disorders which affect the general
    population as well.
        Because of the characteristics of NF and the wide range of
    manifestations and varying degrees of severity, NF is difficult to
    diagnose. In addition, the symptoms are progressive over the
    individual's lifetime and many applicants to military service are
    unaware that they have NF until later in adulthood. Therefore NF is
    frequently missed in admitting physicals and is often not diagnosed
    until military service is completed. Fourteen year Army veteran Ted
    Yates, who is featured in the attached Stripe article, is a prime
    example of one who had his military career cut short because of NF.
        Mr. Chairman, I respectfully invite your attention to all the
    invaluable information provided by the Army regarding the NFRP on its
    website: http://cdmrp.army.mil.
        Thank you for your attention, and I hope this answers any questions
    you may have. If you or your staff wishes to talk further, you can
    speak with me at (847) 290-5025, or with my Washington representatives
    Ed Long and Katie Weyforth at (202)544-1880.
                Sincerely,
                                                        David H. Evans.
                                     ______

                         [From Stripe, August 28, 1992]

                      Veteran Copes With Genetic Disorder
       disease takes two distinct forms; undetectable until tumors begin
                  (By Barry Reichenbaugh, Stripe staff writer)

        For Ted Yates, it's been a source of lasting pain.
        First he bore the emotional pain of watching his mother endure
    years of a disease people knew very little about. Then his adult life
    brought physical pain as he discovered he also had the same disease. It
    came to be known as neurofibromatosis.
        Through it all he has persisted.
        Yates recently spent a week at Walter Reed Army Medical Center for
    some routine testing and to record some comments for an educational
    video about the condition affecting his body.
        As an Army major with a masters degree in civil engineering, his
    career was cut short by a loss of hearing resulting from
    neurofibromatosis 2.
        Neurofibromatosis is a genetic condition that causes tumors to form
    on nerves anywhere in the body. The condition occurs in two distinct
    forms. NF-1 causes coffee-colored spots on the skin and both internal
    and external tumors which may disfigure a person's appearance: NF-2
    frequently causes brain and spinal tumors which can lead to loss of
    hearing, sight and balance.
        The disorders are sometimes inherited and sometimes the result of
    spontaneous mutation, according to existing information on
    neurofibromatosis. There is no test for either form of NF, no way to
    prevent the disease, and no cure. The disease is lesser-known than
    Muscular Distrophy, Tay-Sachs and Huntington's Disease, but it affects
    more people.
        ``The thing's so traumatic,'' Yates says. ``People have facial
    paralysis, they can't hear, their eyes don't operate properly, like me
    they're clumsy. They go into the bedroom and sit. And it's hidden.''
        Yates and two brothers inherited the disorder from their mother,
    who died in her sixties while undergoing an operation for the removal
    of tumors.
        He says doctors had no idea he had NF-2 when he had his first tumor
    removed in 1965 at age 25. He wasn't severely affected by the disorder
    and continued his Army career for another decade. Operations for tumors
    affecting his acoustic nerves in the late 1970s led to complete
    deafness and his medical retirement from the Army after 14 years of
    service.
        His last operation was in 1984. Since then, because tumors can
    recur at any time, Yates has periodic Magnetic Resonance Imaging scans
    done around his head and spine to detect new growths.
        The tumors that people who have NF commonly develop can cause
    constant pain. The external tumors can severely disfigure the skin and
    cause mental anguish on top of the physical pain.
        ``One thing I learned early on is that people in our society put
    too much emphasis on appearance,'' says Yates. ``And once they see your
    face . . . they pity you. They want to kind of get away from you.
    Nobody has wanted to talk about NF . . . now we do.''
        Awareness is getting better, says Mary Ann Wilson of
    Neurofibromatosis, Inc., but her organization and others continue their
    efforts to educate medical professionals and the public. NF, Inc., is a
    national not-for-profit organization in Mitchellville, Md. ``Through
    educating the public we also promote tolerance toward people who have
    NF, especially the ones who look different and who have the multiple
    tumors,'' says Wilson.
        She says NF, Inc., is producing an educational videotape about the
    disorder, its symptoms and its affect on people and their families.
    Starting this fall the video will be shown at medical facilities and
    schools to physicians, social workers, genetic counselors and the
    public. Wilson's group is actively involved in attracting funding and
    support for continued research in hope of finding a cure for the
    disorders.
        The National Institute of Health is working to find the origin of
    NF-2. Researchers there have traced the NF-2 genetic trail through
    several generations of Yates' family.
        ``Mr. Yates' family is a very large family, and that makes it
    useful for these kinds of studies,'' says Dr. Dilys Parry, a clinical
    genetics researcher with the National Institute of Health in Bethesda,
    Md. ``To try to map a gene you need to have affected and unaffected
    individuals in two and preferably three or more generations. His family
    alone provided us enough information to map the gene.
        ``We know the chromosome the gene is on,'' says Parry. ``We have
    some DNA markers that we know are near the gene, but we don't have the
    gene yet.''
        Parry says once researchers have the gene they can figure out what
    the normal gene is doing and what went wrong to cause NF-2. With that
    knowledge, she says, they may be able to develop therapeutic methods to
    prevent tumors from growing.
        One tragic aspect of both NF-1 and NF-2 is that since there's no
    test to uncover the disorders before tumors first appear, people with
    NF can pass the disorder on to their children before they know they
    have it themselves.
        ``The one thing that ties all of us together,'' says Wilson,
    ``whether NF-1 or NF-2, is the unpredictability of the condition. You
    don't know if your children have it until it manifests itself.''
        ``Once you know you have NF you can probably go two ways--you can
    either accept it or reject it,'' says Yates. ``And if you accept, it
    you really don't need anybody's help to cope. If you reject it you
    do.''
        Yates is one of those people who accepts the disorder but doesn't
    let it keep him housebound. In addition to spending his time in his
    woodworking shop and tending his vegetable garden and fruit trees,
    Yates has touched the lives of scores of young people in his home of
    Enterprise, Ala., through his involvement in youth soccer. Two of his
    YMCA teams have earned state championships.
        ``I really enjoy seeing kids develop,'' answers Yates when asked
    what he likes about coaching soccer. ``You take 15 individuals and you
    can mold them into a team. You can see them get better--team-wise and
    individually.
        ``What they're learning is a little about life--they're learning
    that they can't do everything by themselves--it takes somebody else
    involved to really get a job done.''
        That's also how Yates sees his life with NF-2.
        ``You really have to fight depression all the time,'' he says.
    ``It's hanging right there on your shoulder all the time. I stay busy.
    I push myself. If I get up and I don't feel good and I think I'm not
    going to do anything today--I'll say `no, you're going to do
    something,' and then I'll start doing something.''
        He says he gets encouragement from his wife, Laraine, his family
    and friends, including friends made here at Walter Reed during numerous
    visits over the years.
        The Neurosurgery Clinic staff at WRAMC sees several patients with
    neurofibromatosis, says Capt. James Ecklund, M.D., chief resident in
    neurosurgery. Yates, he says, has ``a fairly complex case'' of NF-2 in
    that he has ``a lot of tumors.'' But despite his condition, says
    Ecklund, Yates copes very well with his problems.
        ``He's a wonderful guy,'' says Ecklund. ``He's doing well in spite
    of his deafness. He's an excellent reader of lips.'' .
        Yates says he appreciates the treatment he gets every time he comes
    to Walter Reed.
        ``I've been coming here since 1983,'' says Yates, ``and no matter
    who's here, they've all been good to me. I can't say enough about the
    staff here. The people who've been here a while know me and they treat
    me real good. It's just like homecoming when I come up here. They're
    all glad to see me and want to know how I'm doing.''
                                     ______

           Neurofibromatosis: Inherited, Caused by Genetic Mutations
                  (By Barry Reichenbaugh, Stripe staff writer)

        There are two genetically distinct forms of neurofibromatosis: NF-1
    and NF-2.
        Both forms are genetic disorders of the nervous system that can
    cause tumors to form on the nerves anywhere in the body, at any time,
    according to educational literature prepared by Neurofibromatosis,
    Inc., of Mitchellville, Md.
        Neither form of the disease can be passed on by contact.
    Neurofibromatosis is either inherited, or it develops by some
    unexplained genetic mutation. All races and both sexes are equally
    affected.
        NF-1 (formerly called Recklinghausen's Disease) occurs in about one
    in 4,000 births and is characterized by:
      --Multiple cafe-au-lait colored spots on the skin;
      --Tumors of varying sizes on or under the skin;
      --Freckling in the underarm or groin area.
        Some people with NF-1 have mild symptoms and live relatively normal
    lives. Others have many nerve fiberous lumps on the face and body.
    Changes in hormone levels during puberty or pregnancy can increase the
    problem. Kids with NF-1 sometimes have learning disabilities and speech
    problems, seizures and can be hyperactive.
        NF-2, or bilateral acoustic neurofibromatosis, occurs in about one
    in 50,000 births and is characterized by:
      --Tumors affecting the hearing nerves, often resulting in hearing
            loss and balance problems;
      --Tumors of the brain or spinal cord and skin;
      --Unusual cataracts of the eye occurring at an early age.
        Signs of NF-2 usually appear after puberty. People with NF-2 may
    lose their hearing or sight, experience headaches, dizziness and
    balance problems.
        An affected person has a 50 percent chance of passing the disorder
    on to each offspring. Neurofibromatosis 1 and 2 may be associated with
    bone deformation, hearing loss, vision impairment, and seizures.
        People who do not have neurofibromatosis cannot pass the disease on
    to their children.
        For more information on neurofibromatosis, contact Mary Ann Wilson
    at (301) 577-8984, TDD (301) 461-5213, or write to NF, Inc., Mid-
    Atlantic chapter, 3401 Woodridge Court, Mitchellville, MD 20721-2817.

        Senator Stevens. Our next witness is Benjamin Butler,
    Legislative Director for the National Association of Uniformed
    Services. Good morning, sir.

    STATEMENT OF BENJAMIN H. BUTLER, LEGISLATIVE DIRECTOR,
                NATIONAL ASSOCIATION FOR UNIFORMED SERVICES
        Mr. Butler. Mr. Chairman, Senator Inouye, the National
    Association for Uniformed Services is very grateful for the
    invitation to testify before you about our views and
    suggestions concerning defense funding issues. I would like to
    highlight part of my written testimony pertaining to military
    health care.
        We would like to thank the subcommittee and the full
    Appropriations Committee for its leadership in the past,
    resulting in TRICARE improvements for all military medical
    beneficiaries. However, we must again urge that the Senate
    provide full funding of the defense health program.
        A recent action in the Washington, DC, area illustrates the
    impact that funding can have on health care. According to a
    document from a medical treatment facility (MTF) commander in
    the Washington, DC, area, ``Our Nation is at war. As a result,
    this is an exceptional tight fiscal year for which no
    supplemental funding is anticipated.''
        Consequently, within the local military health care
    network, enrollment in TRICARE Prime for new enrollees is
    restricted to active duty and active duty family members only.
    New retirees and family members under age 65 may enroll only
    with a civilian primary care manager.
        In addition, certain special services within the network
    are limited and beneficiaries may not have access to urology,
    physical therapy, and optometry, and for certain the Fort
    Belvoir ear, nose, and throat clinic because of its closure.
        We are concerned that what is happening locally within the
    Washington, DC, area will be duplicated across the country and
    within all MTF and TRICARE networks.
        And these actions go beyond just patient access. For
    example, it affects the entire military medical department.
    Doctors need to have access to patients with medical conditions
    to practice and develop their skills. Without patient access
    and skill development of doctors and teams required for
    delivery of high quality general and specialized procedures,
    there is a tremendous adverse effect on military medical
    readiness. Especially affected are fields like cardio surgery,
    urology, general surgery, ophthalmology, and internal medicine.
        Our concerns are that urologists, general surgeons, and
    other doctors will be reduced to treating routine situations on
    an active duty only population within the United States, and if
    this happens, how can DOD interest military doctors in
    remaining on active duty?
        Most retirees and their family members under the age of 65
    joined TRICARE Prime to continue care in the military system.
    Forcing them out of the military care denies them the care they
    want and the military doctors the full range of patients they
    need for their training and skills.
        Many in military medicine have been concerned for years
    about the eroding patient base. Closing TRICARE Prime to
    retirees and their family members on base accelerates the
    erosion of the referral base to military medical centers where
    most of the specialized training takes place.
        Funding shortfalls that cause MTF commanders to cut off
    retirees from direct military medical care and that force them
    to seek care in the civilian sector has the potential of
    harming the military medical departments.
        Mr. Chairman, the overall goal of the National Association
    of Uniformed Services (NAUS) is a strong national defense. We
    believe that comprehensive, lifelong medical care for all
    uniformed services beneficiaries, regardless of age, status, or
    location, furthers this goal. As evidenced by the recent
    changes in the military health care system locally, none of
    these goals can be achieved without adequate funding and
    without the people to work on, the skills that are so important
    to our military doctors could diminish.
        Thank you, Mr. Chairman.
        [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.
        Position: We urge the committee to provide funding for the annuity
    increase as described in S. 1916, 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, 2004,
    one year beyond the 30th anniversary of the program. Enrollees who have
    reached the age of 70 and have paid their SBP premiums for more than 30
    years (360 payments) are already being penalized.
        Position: We ask that you provide funding to allow those early
    enrollees to be allowed this relief as described in S. 2177.
    Survivor Benefits Program/Dependency and Indemnity Compensation Offset
        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.
        Position: The National Association for Uniformed Services strongly
    urges funding for S. 585.

                      MILITARY EXCHANGES AND COMMISSARIES

        Issue One.--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.
    Examples of this include a recent proposal studied by DOD to implement
    a policy of variable pricing at military commissaries that would
    actually reduce the savings to the military customer. While the
    variable pricing study requested by DOD does not seem to offer a
    favorable recommendation, we are concerned that additional bad ideas
    like this will be generated in the future that will ultimately hurt the
    benefit.
        NAUS understands 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.
        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. 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 Two.--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.
        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.
        A recent action in the Washington, DC area illustrates the impact
    that funding can have on the health care benefit. According to a
    document from a MTF commander in the Washington, DC area, which may
    duplicate similar notices issues by other MTF commanders around the
    country, ``Our nation is at War. As a result, this is an exceptional
    tight fiscal year for which no supplemental funding is anticipated.''
        Consequently, within the Fort Belvoir Health Care Network, which is
    a part of the Walter Reed Army Medical Center network, enrollment in
    TRICARE Prime for new enrollees is restricted to Active Duty (AD) and
    Active Duty Family Members (ADFM) only. New retirees and family
    members, under age 65, may enroll only with a civilian primary care
    manager. Furthermore, enrollment in TRICARE Plus (for retirees/family
    members over 65) is no longer available to new enrollees, or the Prime
    enrollees aging into Medicare.
        In addition, certain special services within the network are
    limited and beneficiaries may not have access to Urology, Physical
    Therapy, and Optometry; and, for certain the Fort Belvoir Ear Nose and
    Throat clinic because of its closure.
        We are concerned that what is happening locally within the
    Washington, DC area will be duplicated across the country and within
    all MTF and TRICARE Networks.
        And, these actions go beyond just patient access. For example it
    affects the entire military medical department. For example, doctors
    need to have access to patients with medical conditions to practice and
    develop their skills. Without patient access and skill development of
    doctors and teams required for delivery of high quality general and
    specialized procedures--there is a tremendous adverse affect on
    military medical readiness. Especially affected are fields like
    cardiothoracic surgery, urology, general surgery, ophthalmology and
    internal medicine. Does the military have no further need for doctors
    treating Ear, Nose and Throat problems?
        Other concerns are:
      --How will the remnants of the military medical departments be able
            to take care of troops involved in the various theaters of
            operations that are or will be involved in fighting the War on
            Terror?
      --Will urologist/general surgeons be reduced to treating routine
            situations on an active duty only population within the United
            States?
      --If so, how can DOD interest them in remaining on active duty? Most
            retirees and their family members under the age of 65 join
            TRICARE-Prime to continue care in the military system. Forcing
            them out of military care denies them the care they want and
            doctors the full range of patients they need for their training
            and skills.
      --What about the retired Medical Corps officers that were lured to
            return as civilian doctors to staff MTFs?
        Many in military medicine have been concerned for years about the
    eroding patient base. Closing TRICARE-Prime to retirees and their
    family members at the base level accelerates the erosion of the
    referral base to military medical centers where most of the specialized
    training takes place.
        Funding shortfalls that are more than likely a reaction to a mid-
    term budget review and other DOD imposed restrictions that causes MTF
    commanders to cut off retirees from direct military medical care and
    that forces them to seek care in the civilian sector has the potential
    of harming the military medical departments.
        We are also concerned about staffing MTFs with ``temporary'' hire
    physicians. After witnessing an ever changing medical program that has
    no job security, what kind of physician can be found to work in such an
    environment? Would they be the ones at the end of their careers that
    are anxious to leave at the first sign of trouble or a better job?
    Additional questions also arise concerning the time, money, and effort
    was used to secure contract physicians in the first place.
        Not all retirees are old. Many are retiring at the 20-year point
    between the ages of 37-42. Others, many who are now patients at our
    military medical centers are being treated for wounds received in Iraq
    and other places, and will be placed on the retired list while they are
    in their very early 20's or 30s. What reaction can we expect from these
    wounded troops after being told that if they stay in the military or
    are medically retired will be persona non grata in the direct care
    system at age 65?
        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. As evidenced by the recent changes in the military health
    care system locally none of these goals can be achieved without
    adequate funding, and without the people to work on, the skills that
    are so important to our military doctors could diminish.
    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 a recent 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.
    Permanent ID Card for Dependents Age 65 and Over
        One of the issues stressed by NAUS is the need for permanent ID
    cards for dependents age 65 and over. With the start of TRICARE for
    Life, expiration of TFL-eligible spouses' and survivors' military
    identification cards, and the threatened denial of health care claims,
    causes some of our older members and their caregivers' significant
    administrative and financial distress.
        Formerly, many of them who lived miles from a military installation
    or who lived in nursing homes and assisted living facilities just did
    not bother to renew their ID card at the four-year expiration date.
    Before the enactment of TFL, they had little to lose by doing so. But
    now, ID card expiration cuts off their new and all-important health
    care coverage.
        A four-year expiration date is reasonable for younger family
    members and survivors who have a higher incidence of divorce and
    remarriage, but it imposes significant hardship and injustice to the
    more elderly dependents and survivors.
        NAUS is concerned that many elderly spouses and survivors with
    limited mobility find it difficult or impossible to renew their
    military identification cards. A number of seniors are incapacitated
    living in residential facilities, some cannot drive, and many more do
    not live within a reasonable distance of a military facility. Often the
    threat of loss of coverage is forcing elderly spouses and survivors to
    try to drive long distances to get their cards renewed. Renewal by mail
    can be confusing and very difficult for beneficiaries or their
    caregivers. The bottom line is that those who cannot handle the
    daunting administrative requirements to renew their ID card every four
    years potentially face a significant penalty.
        Position: NAUS urges that the Subcommittee direct the Secretary of
    Defense to authorize issuance of permanent military identification
    cards to uniformed services family members and survivors who are age 65
    and older, with appropriate guidelines for notification and surrender
    of the ID card in those cases where eligibility is ended by divorce or
    remarriage.

                                   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. Well, I certainly wish we had the funding.
    We might be able to meet some of these requests today. But I do
    think you have got a point.
        Do you know the cost of using the Federal Employees Health
    Benefits Program (FEHBP) in lieu of the TRICARE option?
        Mr. Butler. We have that information available. I will
    provide it for the record, Mr. Chairman.
        Senator Stevens. I would like to see that.
        Also, have you requested the military ID cards before? I
    think that is a very valid idea. They should have them anyway
    to have access to military facilities if they want to seek
    medical care at such a facility when they are traveling. Have
    you asked for that before?
        Mr. Butler. Asked for military identification (ID) cards?
        Senator Stevens. Yes, for uniformed service family members
    and survivors who are 65 and older. Have you asked for that
    before?
        Mr. Butler. Yes, we have. We have presented that in
    testimony before with the over 65 that have a hard time getting
    their ID cards renewed. We believe when they turn 65, that it
    should be indefinite at that time.
        Senator Stevens. We would support that. I am not sure we
    can do it or whether it should go to the Armed Services
    Committee, but it is a good suggestion.
        Senator.
        Senator Inouye. No questions.
        Senator Stevens. Thank you very much. Enjoyed your
    testimony.
        Our next witness is Harry Armen, President-elect, American
    Society of Mechanical Engineers.

    STATEMENT OF HARRY ARMEN, PRESIDENT-ELECT, AMERICAN
                SOCIETY OF MECHANICAL ENGINEERS
        Mr. Armen. Good morning. My name is Harry Armen. I am
    President of the American Society of Mechanical Engineers, a
    120,000 member engineering society founded in 1880. I have 39
    years of experience in the defense aerospace industry.
        We appreciate the opportunity to appear before your
    subcommittee to present our views on the importance of science,
    engineering, and technology programs sponsored by the DOD,
    programs that are critically important to fundamental
    scientific advances and to the next generation of highly
    skilled scientists and engineers. I want to specifically thank
    this subcommittee and you, Mr. Chairman, and you, Senator
    Inouye, for the ongoing support that you have shown for the DOD
    science and technology programs.
        The stated goal of the administration and Congress is to
    maintain defense S&T funding at 3 percent of the defense
    budget. This would require $12.1 billion for fiscal year 2005.
    We urge you to support this level of funding to enhance both
    the security and the economic vitality of the Nation.
        While we appreciate your continued support for the overall
    program, we remain very concerned about the growing level of
    investments in near-term applied R&D at the expense of long-
    term investments in basic research. We urge you to reverse the
    declining percentage of funding that supports basic research
    within the S&T portfolio.
        In the early 1980's basic research was 20 percent of that
    portfolio. That level has declined to less than 12 percent. We
    strongly urge this subcommittee to support basic research that
    will lead to the next generation of advances in defense
    technology and ultimately to fielded systems. Here is why.
        Reductions in the basic research budget will have adverse
    consequences on the development of the science and engineering
    workforce. DOD basic research and graduate education programs
    are tightly linked. The failure to invest now to sustain these
    programs will reduce the number and quality of students who
    become engineers and scientists in the future. I cannot impress
    upon you enough that this is an urgent situation, one that
    keeps me and should keep the members of the subcommittee awake
    at night. We are simply not attracting the best and brightest
    of our young students to enter the field of defense R&D.
        Furthermore, unlike in the past, engineering students from
    abroad are not planning to remain in the United States after
    graduation, but are instead planning to return to their home
    countries to explore opportunities there. While the commercial
    industry is able to utilize talent from abroad, the defense
    industry cannot.
        A recent RAND study concluded that two-thirds of all
    Federal R&D funding that went to institutes of higher learning
    in 2002 was provided by the Department of Health and Human
    Services. Most of that went to life sciences. In sharp
    contrast, the DOD provided 7 percent. Our students followed the
    dollars.
        We have an opportunity now to reverse the situation by
    attracting the best and the brightest young minds to consider a
    career in defense R&D. I urge the members of the subcommittee
    to continue your support to strengthen DOD science,
    engineering, and technology programs. It will require your
    continued commitment and attention to defense R&D to ensure
    that our best engineering and scientific minds are once again
    willing to apply their talents to meeting the future defense
    needs of this Nation.
        I thank you for the opportunity to offer our views.
        [The statement follows:]

                       Prepared Statement of Harry Armen

        The ASME DOD Task Force of the Inter-Council Committee on Federal
    Research and Development (ICCFRD) is pleased to provide this testimony
    on the Research, Development, Test and Evaluation (RDT&E) and the
    Science, Engineering and Technology (SET) programs within the fiscal
    year 2005 budget request for the Department of Defense. We appreciate
    the opportunity to provide input on these areas that are critical to
    the national security and economic vitality of the United States.
    Introduction
        ASME is a nonprofit, worldwide engineering Society serving a
    membership of 120,000. It conducts one of the world's largest technical
    publishing operations, holds more than 30 technical conferences and 200
    professional development courses each year, and sets many industrial
    and manufacturing standards. The work of the Society is performed by
    its member-elected Board of Governors through five Councils, 44 Boards,
    and hundreds of Committees operating in 13 regions throughout the
    world.
        ASME's DOD Task Force (herein referred to as ``the task force'') is
    comprised of university and industry members who contribute their
    engineering and policy expertise to review the DOD budget and
    legislative requests. The Task Force believes it is uniquely qualified
    to evaluate budget and policy issues in the area of DOD's science,
    engineering and technology development programs. This analysis is
    provided as a public service and we are proud to contribute to a better
    public policy-making process.

    DOD Research, Development, Test and Evaluation Accounts
        The Administration requested $68.9 billion for the Research,
    Development, Test and Evaluation (RDT&E) portion of the fiscal year
    2005 DOD budget. These resources are used mostly for developing,
    demonstrating, and testing weapon systems, such as fighter aircraft and
    warships. This amount represents growth from last year's appropriated
    amount of about 6 percent, and is historically the highest funding
    level for overall engineering activities, even when adjusted for
    inflation. Therefore, even with new requirements generated from the
    transformational military, missile defense, and the war on terrorism,
    this funding level appears to be sufficient to develop, demonstrate,
    and bring military systems to the production phase that will be
    required in the near future. Hence, the Task Force supports the overall
    funding request for RDT&E.

    DOD Science, Engineering and Technology Accounts
        A relatively small fraction of the total RDT&E budget is allocated
    for the core Science, Engineering and Technology (SET) programs.
    Specifically, the Administration's proposed SET request is $10.55
    billion, 15 percent of the RDT&E total, and 15 percent lower than the
    fiscal year 2004 appropriated level of $12.5 billion. The Task Force is
    very concerned with the proposed significant reductions in the SET
    accounts, particularly in the areas of basic research and in programs
    that fund advanced science, mathematics, and engineering education.
        There are three (3) components to the SET budget: basic research
    (6.1), applied research (6.2), and advanced technology development
    (6.3). The Administration's request in all three of these areas is less
    than present funding levels.
        The request for basic research (6.1) is $1.3 billion, 5 percent
    lower than the fiscal year 2004 appropriated amount of $1.4 billion.
    Basic research is less than 12 percent of the SET budget, and less than
    2 percent of the RTD&E total, and yet the programs supported by this
    account are critically important to fundamental scientific advances and
    to the next generation of highly skilled scientists and engineers.
    Almost all of the current high-technology weapon systems, from laser-
    guided, precision weapons, to the global positioning satellite (GPS)
    system, have their origin in fundamental discoveries generated by these
    defense-oriented, basic research programs. Proper investments in basic
    research are needed now, so that the fundamental scientific results
    will be available to create innovative solutions to future defense
    needs of this country. Over the last 40 years, more than half of all
    mechanical and electrical engineering graduate students have been
    funded under these DOD basic research programs. Many of the technical
    leaders in corporations and government laboratories which are
    developing current weapon systems, such as the F-22 and the Joint
    Strike Fighter, were educated by fellowships and/or research programs
    funded by DOD basic research programs. Failure to invest sufficient
    resources in basic, defense-oriented research could reduce innovation
    and weaken the future S&E workforce.
        The request for applied research (6.2) is $3.9 billion, 14 percent
    below the fiscal year 2004 funding level of $4.4 billion. The programs
    supported by this account are generally intended to take basic
    scientific knowledge, perhaps phenomena discovered under the basic
    research programs, and apply them to important defense needs. These
    programs may involve laboratory proof-of-concept and are generally
    conducted at universities and government laboratories. Some devices
    created in these defense technology programs have duel use, such as
    GPS, and the commercial market far exceeds the defense market. Many
    small companies that fuel job growth in many states obtained their
    start in defense programs, but later broaden their market. However,
    without initial support many of these companies would not exist.
    Failure to properly invest in applied research would prevent many ideas
    for devices from being tested in the laboratory, and would stunt the
    creation and growth of small entrepreneurial companies.
        The request for advanced technology development (6.3) is $5.3
    billion, 17 percent lower than the present funding level of $6.3
    billion. These resources support programs that develop technology to
    the point that they are ready to be used in weapon systems. Generally
    without real system-level demonstrations, which are funded by these
    accounts, companies are reluctant to incorporate new devices into
    system development programs.
        The Congress in general, and this subcommittee specifically, has
    acted in recent years to increase funding in the DOD SET accounts, and
    we thank you for your support. The oft-stated goal of both the
    Administration and Congress is to maintain defense SET funding at 3
    percent of the overall defense budget. This would require $12.1 billion
    for the SET accounts for fiscal year 2005, which is an increase of
    approximately $1.6 billion above the Administration's request. We
    recommend you support this level of funding to maintain stable funding
    in the SET portion of the DOD budget. This level of funding will
    enhance the long-term security and economic vitality of our country.
        We further recommend that the Administration and Congress undertake
    a five-year program to reverse the declining percentage of funding
    within the SET portfolio that supports basic research. This is
    precisely the type of work that yielded discoveries used today in
    weapons systems, platforms and protective gear successfully fielded to
    save lives. In the early 1980s, basic research accounted for nearly 20
    percent of SET funding. This level has declined to less than 12 percent
    of the SET budget and less than 2 percent of the overall RDT&E budget.
    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.

    Science and Engineering (S&E) Workforce
        The DOD supports 37 percent of all federal research in the computer
    sciences and 44 percent of all engineering research, as well as
    significant shares of research in mathematics and oceanography. DOD's
    impact is even greater in several engineering sub-disciplines such as
    electrical engineering and mechanical engineering. DOD funds research
    in these disciplines for their contributions to national defense, but
    this research is also a key source for major innovations in the
    civilian economy. Through their research, engineers and scientists 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.
        A December 2003 National Science Board report titled ``The Science
    and Engineering Workforce: Realizing America's Potential'' stated, ``.
    . . demographics data indicate that participation of U.S. students in
    science and engineering will decline if historical trends continue in
    S&E degree attainment by our college-age population. At the same time,
    retirements of scientists and engineers currently in the workforce will
    accelerate over the coming years.''
        Reductions in the SET budgets have potential adverse consequences
    on the development of the S&E workforce. DOD basic research and
    graduate education programs are tightly linked by design. The failure
    to invest now to sustain these programs will reduce the number and
    quality of engineers and scientists in the future. Many of the highly
    trained and competent people that emerge from these research programs
    contribute directly to the design and development of defense systems.
    Still others, who receive advanced technical educations as a result of
    these programs, but who do not work directly in the defense industry,
    make contributions to national security by enhancing America's economy.
        There is also a growing and alarming trend in many industries to
    outsource engineering and other highly-skilled service activities to
    foreign workers. In the past outsourcing was largely driven by cost
    considerations and was limited to low-cost, low-skilled workers.
    However, there is an emerging trend to outsource highly skilled
    engineering workforce products such as software and systems design and
    integration. It is not clear that a U.S. based defense contractor,
    relying heavily on engineers and scientists in other countries,
    represents a domestic capability. Domestic content legislation for
    defense procurement makes little or no sense if the engineers that
    design the systems ultimately reside outside the United States.
        The Task Force believes that protectionist measures will not be
    able to serve the long-term policy objective of having the capability
    to design, develop, and manufacture defense systems within the United
    States. In order to assure this capability, sufficient manpower,
    particularly those with the critical skills needed for creating
    advanced defense systems, needs to be available in sufficient numbers
    in the United States. Therefore, prudent investments in programs that
    create a robust, domestic supply of engineers and scientist with
    masters and doctoral level educations is in the national interest.
        As the Administration and Congress respond to and prepare for
    terrorism, increasing funding for DOD's SET Programs is vital. These
    programs protect the stability of the Nation's defense base, strive to
    maintain technological superiority in our future weapons systems, and
    educate new generations of scientists, engineers, mathematicians, and
    skilled technicians who maintain our position as the world's
    technological leader.

    Conclusion
        In Summary, the Task Force supports the overall RDT&E request of
    $68.9 billion, but urges the subcommittee to increase the science,
    engineering and technology (SET) component accounts by $1.6 billion to
    $12.1 billion. The proposed 15 percent reduction in science,
    engineering and technology funding would stifle innovation needed for
    future defense systems and have a detrimental impact on the production
    of scientists and engineers, with advanced technical degrees, required
    to develop military systems in the years to come. In addition, we
    recommend that the Administration and Congress undertake a five-year
    program to reverse the declining percentage of funding within the SET
    portfolio that supports basic research.

        Senator Stevens. Well, thank you very much. Your
    organization did visit us, and we had some conversations about
    mechanical engineering dropping behind in terms of investment
    for R&D.
        Are you into nanotechnology at all in terms of your
    applications in the military field?
        Mr. Armen. We are starting to, yes, sir. Yes, we are with
    new material systems and new coatings. Yes.
        Senator Stevens. Senator Inouye.
        Senator Inouye. No questions.
        Senator Stevens. You have a point and I think we should
    look closely at that because it is true that the foreign
    students we are assisting in their education are not staying
    with us, but they are not basically in your field either. So I
    think we should do our best to attract more people into this
    type of research for the military.
        Mr. Armen. Thank you very much, Mr. Chairman.
        Senator Stevens. Thank you.
        Our next witness is Seth Allan Benge of the National
    Military Veterans Alliance. Good morning, sir.

    STATEMENT OF SETH ALLAN BENGE, LEGISLATIVE DIRECTOR,
                RESERVE ENLISTED ASSOCIATION ON BEHALF OF
                THE NATIONAL MILITARY VETERANS ALLIANCE
        Mr. Benge. Good morning, Mr. Chairman. Mr. Chairman,
    Senator Inouye, as Legislative Director for the Reserve
    Enlisted Association, it is an honor for me to testify on
    behalf of the National Military and Veterans Alliance. The
    alliance is an umbrella group made up of 29 military retiree
    veterans and survivor associations with almost 5 million
    members.
        Our concerns are many, but our time is brief, so I will
    discuss a few issues that deal directly with our Nation's
    Reserve forces. There are some subjects that we believe will
    need to be addressed and will require funding from this
    committee.
        During testimony before this committee, the Reserve chiefs
    have recognized the Montgomery GI Bill for selected Reserves as
    an important recruiting and retention tool, but the GI bill for
    reservists has not kept pace with the ever-rising costs of
    education. In 1985, when this education assistance was first
    legislated, it was 47 percent of the active duty benefit. Today
    that percentage is down to only 27 percent. Eventually this
    lagging will have a dampening effect on its usefulness. It is
    important that we begin to correct this problem by starting to
    incrementally raise the monthly rates. The alliance requests
    appropriations funding to raise the monthly payment of the
    title 10 Montgomery GI Bill and lock that rate at 50 percent of
    the chapter 30 benefit.
        Another effective tool to keep quality men and women in our
    Reserve forces are bonuses. Here also the Reserve program has
    fallen behind. The law creates a limit on the amount that can
    be paid out to members of the Reserves. Currently this cap is
    set at $5,000 per reservist. This amount, in some cases, simply
    is not enough. These bonuses are used to keep men and women in
    mission-critical military occupational specialties that are
    experiencing falling numbers or are difficult to fill. The
    operational tempo, financial stress, and civilian competition
    for these jobs makes bonuses a necessary program for the
    Department of Defense to fill essential programs.
        Another point for consideration is that Guard and Reserve
    members are not eligible for Reserve bonuses while mobilized,
    but neither are they eligible for active duty bonuses. This
    catch-22 means that reservists are denied the opportunity to
    receive bonuses tax-free like their active duty brother. This
    would help offset losses in pay. The alliance would like to see
    the Reserve chiefs receive the funds and the authority to award
    bonuses above the $5,000 limit and we support extending the
    bonus authority to Reserve component members who have 14 to 20
    years in service.
        The National Military 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 these points when finalizing your appropriation
    bills this year. Again, thank you, Mr. Chairman. Thank you for
    your attention.
        [The statement follows:]

                     Prepared Statement of Seth Allan Benge

                                  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 Retirees Association;
    American WWII Orphans Network; AMVETS; Association of Old Crows;
    Catholic War Veterans; Class Act Group; Gold Star Wives of America;
    Korean War Veterans Foundation; Legion of Valor (Washington Capital
    Region); Military Order of the Purple Heart; Military Order of the
    World Wars; National Assn for Uniformed Services; National Gulf War
    Resource Center; Naval Enlisted Reserve Association; Naval Reserve
    Association; Paralyzed Veterans of America; Reserve Enlisted
    Association; Reserve Officers Association; Society of Military Widows;
    The Retired Enlisted Association; TREA Senior Citizen League; Tragedy
    Assistance Program for Survivors; Uniformed Services Disabled Retirees;
    Veterans of Foreign Wars; Vietnam Veterans of America; and Women in
    Search of Equity.
        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.
        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 benefits of the Reserve components and their
    families. The improvements in health care, pay system, family support,
    mobilization and demobilization problems have been historic. It has
    been a very successful few years. But there are still many serious
    problems to be addressed:

                              MGIB-SR ENHANCEMENTS

        The current Montgomery G.I. Bill dates back to President Franklin
    Roosevelt signing the ``Servicemen's Readjustment Act of 1944''. The
    G.I. Bill seeks to fulfill six purposes for the reserve forces: (1) to
    provide educational assistance program to assist in the readjustment of
    members of the Armed Forces to civilian life; (2) to extend the
    benefits of a higher education to qualifying men and women who might
    not otherwise be able to afford such an education; (3) to provide for
    vocational readjustment and to restore lost educational opportunities
    to those service men and women; (4) to promote and assist the All-
    Volunteer Force program and the Total Force Concept of the Armed Forces
    and to aid in the recruitment and retention of highly qualified
    personnel for both the active and reserve components of the Armed
    Forces; (5) to give special emphasis to providing educational
    assistance benefits to aid in the retention of personnel in the Armed
    Forces; and (6) to enhance our Nation's competitiveness through the
    development of a more highly educated and productive work force.
        Approximately 7.8 percent of the enlisted Reservists have a
    Bachelors degree or higher. This makes the Montgomery G.I. Bill for
    Selective Reserves (MGIB-SR) an important recruiting and retention
    tool. With massive troop rotations the Reserve forces can expect to
    have retention shortfalls, unless the government provides incentives
    such as those that would counter the negative effects of having placed
    a college education in abeyance. Education is not only a quality of
    life issue or a recruiting/retention issue it is also a readiness
    issue. Education a Reservist receives while either in a university or a
    trade school enhances their careers and usefulness to the military. The
    ever-growing complexity of weapons systems and support equipment
    requires a force with far higher education and aptitude than in
    previous years.
        The problem with the current MGIB-SR is that the Selected 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 past October 1, the rate fell to 27 percent of the
    Chapter 30 benefits. While the allowance has inched up by only 7
    percent since its inception, the cost of education has climbed
    significantly.
        Position: The NMVA requests appropriations funding to raise the
    MGIB-SR and lock the rate at 50 percent of the active duty benefit.

                                    BONUSES

        Guard and Reserve component members may be eligible for one of
    three bonuses, Prior Enlistment Bonus, Reenlistment Bonus and Reserve
    Affiliation Bonuses for Prior Service Personnel. These bonuses are used
    to keep men and woman in mission critical military occupational
    specialties (MOS) that are experiencing falling numbers or are
    difficult to fill. During their testimony before this committee the
    reserve chiefs addressed the positive impact that bonuses have upon
    retention. This point cannot be understated. The operation tempo,
    financial stress and civilian competition for these jobs makes bonuses
    a necessary tool for the Department of Defense to fill essential
    positions. Though the current bonus program is useful there are three
    changes that we have identified that need to be made to increase its
    effectiveness.
        The primary requirement for eligibility and payment of a bonus upon
    reenlistment is that the member must have completed less than 14 years
    of total military service and not be paid more than one six-year bonus
    or two three-year bonuses under this section. This 14-year total
    military service restriction and the limitation on the number of
    bonuses paid, effectively limits the opportunities for career
    reservists to obtain bonuses past 20 years of service and may be a
    disincentive for continuing service in the Reserve component beyond 20
    years. Increasing the eligibility for reenlistment bonuses to 20 years
    of total military service and increasing the number of bonuses that can
    be paid under this section could expand the available force pool, as
    mid-level enlisted reserve members could take advantage of the new
    bonus criteria. Using a 20 year service cutoff instead of a 14 year
    period would encourage selected experienced mid-level subject matter
    experts to reenlist to established high year of tenure or mandatory
    separation dates; should members accept this incentive and reenlist, it
    could boost each service's retention effort in critical skill areas. As
    each Service uses members of the selected reserve in different
    capacities, each Service Secretary may use this new authority as
    required as a force management tool.
        The law also creates a limit on the amount that can be paid out to
    reservists. Currently this cap is at $5,000 per reservists. This amount
    in some cases simply isn't enough. Active duty personnel can receive
    multiple bonuses in amounts upwards of $20,000. The inequity between
    these two amounts is increased even further when taken into
    consideration that Guard and Reserve members are not eligible for
    reserve bonuses while mobilized, but neither are they eligible for
    active duty bonuses. This ``catch 22'' means that two members of the
    Armed Forces, one active one reserve, could be working side-by-side in
    Iraq in a mission critical area. The active duty personnel can reenlist
    and receive a tax-free bonus while the reservist would receive no bonus
    at all. This is a glaring wrong that needs to be corrected.
        Position: The Alliance would like to see the Reserve Chiefs receive
    the funds and the authority to go above the $5,000 limit, an increase
    in eligibility from 14 to 20 years and the ability for reservists to
    receive bonuses while on active duty orders.

                         TRICARE FOR RESERVE COMPONENTS

        A 2002 General Accounting Office (GAO) report indicated that
    possibly 20 percent of the Guard and Reserves do not have adequate
    health insurance. This means up to 150,000 enlisted Reservists and
    their families could be without health insurance. This has a
    potentially devastating effect on the lives of our Reservists. Lack of
    continuity of care during mobilization creates a disincentive for
    reenlistment. In addition, all military members are expected to
    maintain the same health and physical fitness as Active Duty yet they
    are required to fund their own medical coverage. Beyond the quality of
    life issues lays another grave concern. That is the readiness of our
    Reserve Components. With such a large portion of the reserves without
    healthcare and physicals that are only required once every five years
    the number of Guard and Reserve that are unfit for deployment at any
    given time is uncertain. At this moment the government is paying and
    training servicemen and women that when called into action could not
    go.
        The fiscal year 2004 National Defense Authorization Act authorized
    a one-year program to extend premium-based TRICARE coverage to Selected
    Reserve members (and certain members of the Individual Ready Reserve
    (IRR) subject to presidential recall) that are not eligible for
    employer-sponsored health coverage. When it finally takes effect, the
    temporary TRICARE program will provide health care to many of our Guard
    and Reserves. The Department of Defense has announced that this program
    will begin but has not set a start date. When it is finally implemented
    DOD has only $400 billion to draw on to pay for the start-up and to
    then cover eligible reservists and their families.
        Position: The Alliance urges the Congress to provide the money to
    make this current temporary program permanent and to extend it to allow
    all Selected Reserve members and certain IRR members access to premium-
    based TRICARE coverage when they are not on Active Duty. In addition,
    these members should have the option of having the government pay some
    share of any employer-provided health coverage during periods of recall
    to active service.

                                 BAH VS. BAH II

        Under the current pay system there are two Basic Allowances for
    Housing (BAH) rates, one for active duty and one for reservists that
    are mobilized for 139 days or less. When reservists reach the 140-day
    line they start to receive full BAH, reservists that are called for
    training and other assignments that last less than this artificial
    barrier lose money. The assumptions that were made when this system was
    placed into effect in 1983 are no longer valid. Reservists often travel
    away from home for assignments. Since some of these are short
    assignments it is not practical for reservists to uproot their
    families, consequently at times reservists are keeping two residences.
        In the Department of Defense Report to Congress ``Reserve Personnel
    Compensation Program Review'' the department stated that to completely
    eliminate the 140-day threshold, it would cost $162 million annually.
    This report acknowledges that as a matter of equity the 140-day
    threshold should be eliminated. The department's suggestion to reduce
    the threshold for payment of BAH, rather than BAH II, to no more than
    30 days is a cost saving option, but it does not address the fact that
    any time based standard for receiving the allowance is artificial in
    nature and saves money at a cost to the individual servicemen and
    woman.
        Position: The NMVA requests that the funds and language be included
    that would eliminate this artificial and unreasonable difference in the
    BAH that reservists are paid.

                REDUCE RETIREMENT AGE ELIGIBILITY FOR RESERVISTS

        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.
        Position: The National Military and Veterans Alliance 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.

                                   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. 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. Thank you very much.
        Senator Inouye.
        Senator Inouye. How would you justify making TRICARE
    permanent for reservists?
        Mr. Benge. Sir, earlier it was pointed out that it would be
    the same as for active duty, and that would be true, but for
    reservists, the physical standards are also the same for active
    duty. So I would justify it not only as a retention tool, as a
    benefit, but also as a readiness issue to ensure that our
    reservists are physically ready to be mobilized.
        Senator Inouye. Thank you.
        Senator Stevens. To follow on that, how long would you do
    that? You can stay in the Reserve until you are 60, can you
    not?
        Mr. Benge. Yes, sir. I would have to look at the numbers to
    see what would be affordable. Ideally you would want it
    indefinitely. Right now gray area retirees are not eligible for
    TRICARE. They are not eligible until 65.
        Senator Stevens. We can attest to the fact that as you get
    older, you need more medical care.
        Mr. Benge. Yes, sir.
        Senator Stevens. But as you get older, you are not going to
    be called up. So I think we would like to understand this. How
    long do you think this should go on? Just think about it and
    give us a statement, will you?
        Mr. Benge. Yes, sir.
        Senator Stevens. Thank you very much.
        Our next witness is Martin B. Foil, a member of the Board
    of Directors of the National Brain Injury Research, Treatment,
    & Training Foundation. Good morning, sir.

    STATEMENT OF MARTIN B. FOIL, JR., MEMBER, BOARD OF
                DIRECTORS, NATIONAL BRAIN INJURY RESEARCH,
                TREATMENT, & TRAINING FOUNDATION (NBIRTT)
        Mr. Foil. Good morning. Mr. Chairman, Senator Inouye, it is
    good to be back. It is always a pleasure to come and testify on
    behalf of the defense and veterans head injury program (DVHIP)
    which provides state-of-the-art medical care and rehab to
    active duty military personnel.
        As of March 31, DVHIP has treated over 350 troops injured
    in the global war on terrorism. Traumatic brain injury (TBI) is
    a leading combat concern in modern warfare. Previously
    accounting for up to 25 percent of combat casualties, today we
    think the incidence rate is between 40 and 70 percent.
        It is higher for several reasons in hostilities. One, the
    use of more effective body armor and improved trauma care has
    saved more lives. The higher incidence of blast injuries,
    increasing numbers of gunshot wounds to the face, and the
    medical personnel are more aware of the significance of TBI and
    are more likely to identify it.
        Chairman Stevens, as you so eloquently stated on the Senate
    floor last Wednesday, our combat medics regularly perform
    miracles by providing lifesaving care during the critical
    golden hour. The combat medics are performing miracles, but so
    are the doctors and rehab specialist in the DVHIP.
        As the front-page article in the Washington Post reported
    last week, what most soldiers sustaining brain injury tell
    their doctors is they want to go back to their unit. Sergeant
    Colin Rich was shot in the head in Afghanistan in December
    2002. He is one, who with the care of DVHIP, was able to do
    just that. Within 1 year, he returned to active duty, including
    a stint in Iraq. He spoke at the Brain Injury Awareness Day on
    Capitol Hill last October, along with Warrant Officer John Sims
    who sustained a closed head injury during the battle of
    Baghdad. His Blackhawk helicopter was shot down, but while he
    managed to get his men out before the crash, he went down with
    the helicopter. In the days after Sims' injury, he was not
    expected to live, and yet today he is getting his life back
    little by little, having worked today with the Judge Advocate
    General (JAG) Corps as part of the cognitive rehab program at
    the Virginia NeuroCare (VANC), a core component of DVHIP.
        While these are heroic stories, as you know, not everyone
    can return to life as before. DVHIP staff are aware of the
    danger of premature return to duty and how critical it is to
    identify brain injuries when many other injuries like
    amputations are so much more obvious.
        That is why DVHIP this year is asking for $7 million to
    continue treating and screening injured soldiers strategically
    placing specialized clinicians in medical treatment facilities
    throughout the Nation in order to provide the continuity of
    care from battlefield to rehab back to active duty. This
    funding is needed to continue training combat medics and
    surgeons, general medical officers, and reservists in the best
    practices of traumatic brain injury care. So I respectfully
    request your support of the $7 million in the DOD
    appropriations bill under health affairs for operation and
    maintenance for fiscal year 2005.
        Thank you, Mr. Chairman and Mr. Inouye. I would be happy to
    answer any questions.
        [The statement follows:]
                   Prepared Statement of Martin B. Foil, Jr.

        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 (VANC).\2\ Professionally, I am the Chief
    Executive Officer and Chairman of Tuscarora Yarns in Mt. Pleasant,
    North Carolina.\3\
    ---------------------------------------------------------------------------
        \1\ NBIRTT is a non-profit national foundation dedicated to the
    support of clinical research, treatment and training.
        \2\ VANC 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 $7
    million be added to the Department of Defense (DOD) Health Affairs
    budget for fiscal year 2005 under Operation and Maintenance for the
    Defense and Veterans Head Injury Program (DVHIP).

    Traumatic brain injury is a leading combat concern in modern warfare.
            Previously accounting for up to 25 percent of combat
            casualties, today the incidence of TBI may be as high as 40-70
            percent of casualties.
        The incidence of traumatic brain injury (TBI) is believed to be
    greater now than in previous hostilities for a number of reasons: (1)
    The use of effective body armor has saved more lives; (2) medical
    personnel are more aware of the significance of mild closed TBIs and
    concussions and are therefore more likely to identify them; and (3) the
    incidence of blast injuries in Iraq and Afghanistan is high.
        As a result, the current incidence of TBI sustained in theater is
    expected to be higher than in previous conflicts. Major General Kevin
    C. Kiley, Commanding General of the Walter Reed Army Medical Center
    (WRAMC) and the North Atlantic Regional Medical Command said at the
    October 2003 Congressional Brain Injury Task Force Awareness Fair on
    Capitol Hill that as many as 40-70 percent of casualties have the
    possibility of including TBI.\4\ The incidence of TBI was recently
    discussed at a two day conference held by the DVHIP along with the
    Joint Readiness Clinical Advisory Board on March 23-24, 2004, and
    evidence was presented that 61 percent of at-risk soldiers seen at
    WRAMC were assessed to have TBIs. While this does not reflect the
    entire population of wounded in action, the high percentage suggests
    that brain injury acquired in theater is an increasing problem that
    needs to be addressed.
    ---------------------------------------------------------------------------
        \4\ Schlesinger, Robert, ``Brain Injuries Take Toll on U.S.
    Soldiers,'' The Boston Globe, October 16, 2003.
    ---------------------------------------------------------------------------
    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 first 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. Clinical care and
    research is currently undertaken at seven DOD and DVA sites and one
    civilian treatment site.\5\ In addition to providing treatment,
    rehabilitation and case management at each of the 8 primary DVHIP
    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.
    ---------------------------------------------------------------------------
        \5\ 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.
    ---------------------------------------------------------------------------
    As of March 31, 2004 \6\ more than 350 combat casualties from the
            Global War on Terrorism have been served by DVHIP.
    ---------------------------------------------------------------------------
        \6\ The attached article on the complexity of treating brain-
    injured soldiers in Iraq, which appeared on the front page of The
    Washington Post on Tuesday, April 27, 2004 notes that ``in April, 900
    soldiers and Marines have been wounded in Iraq.'' The official number
    of troops treated by DVHIP has only been calculated as of March 31,
    2004.
    ---------------------------------------------------------------------------
        Congressional support over the years has helped create the existing
    DVHIP infrastructure that has been critical in evaluating and caring
    for active duty personnel who are being injured in Operation Iraqi
    Freedom (OIF) and Operation Enduring Freedom (OEF). 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 cared for and promptly discharged back to their
    units. DVHIP is working with the appropriate military institutions to
    ensure that these individuals will be actively followed to ensure they
    receive specialized clinical care and follow-up as needed.
        WRAMC and Bethesda Naval Hospital (for Marines) have been the main
    destinations of injured personnel sent from Iraq and Afghanistan via
    Landstuhl Regional Medical Center in Germany. According to data from
    the Office of the Surgeon General, approximately 70 percent of those
    wounded in action are sent to the general surgery or orthopedic surgery
    services at the receiving medical center because of the most severe
    injuries of the individual. Because the most common cause of wounded in
    action is currently blast injury, DVHIP is working with the Command at
    WRAMC to screen all of the incoming wounded who have been injured in
    blast, falls or motor vehicle accident. An estimated 61 percent of
    those screened at WRAMC were identified as having sustained a traumatic
    brain injury.

    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:
        First Sgt. Colin Robert Rich, A Company, 1st Battalion 504th
    Parachute Infantry Regiment, was shot in the head on December 28, 2002
    while serving in Afghanistan. Rich received initial acute care at a
    hospital in Germany within 15 hours of being shot and arrived at WRAMC
    on January 4, 2002 where he was cared for by DVHIP staff before being
    discharged home on January 16, 2002. Rich continues to receive follow
    up care from DVHIP and spoke before Members of Congress at the October,
    2003 Congressional Brain Injury Task Force Awareness Fair. Rich
    returned to limited active duty in December of 2003.
        Warrant Officer John Sims, U.S. Air pilot and member of the
    Maryland Guard was piloting a Black Hawk helicopter in Iraq when his
    helicopter went down, and he suffered brain injuries. His wife was
    initially told he probably would not survive. After being admitted to
    WRAMC, he was cared for at the Richmond VA hospital before being
    transferred to Virginia Neurocare, DVHIP's civilian community reentry
    treatment site. Although he has made remarkable recovery, his ability
    to pilot a plane again is in doubt. Simms also spoke before Members of
    Congress at the October 2003 Congressional Brain Injury Task Force
    Awareness Fair.
        PFC Alan Lewis was driving a Humvee in Baghdad on July 16, 2003 in
    Iraq when an explosive device tore off his legs. Lewis was identified
    as a potential TBI patient through DVHIP screening and was found to
    have sustained a mild TBI. DVHIP clinical staff helped him cope with
    memory problems and other neurobehavioral difficulties from his head
    injury throughout the rehabilitation process. He has been an articulate
    spokesperson for the dedication and resolve of our fighting force and
    the potential for recovery after a serious injury.
        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.

    Improving Medical Care, Training and Diagnostics
        Along with the Joint Readiness Clinical Advisory Board (JRCAB) at
    Fort Detrick, DVHIP co-sponsored a first-of-its-kind conference
    entitled ``Neurotrauma in Theater: Lessons Learned from Iraq and
    Afghanistan.'' The conference brought together neurosurgeons,
    neurologists, physician assistants, medic, nurses and general medical
    officers who served in Iraq and Afghanistan. Expert opinion from every
    branch of the armed forces was shared and debated. In addition to
    helping address immediate needs and guide future research for the
    safety of the Active Duty, the conference informed a specialty
    neurotrauma panel with recommendations going to the Office of the
    Surgeon General.
        A recurring theme throughout the neurotrauma conference was the
    need for training for management of closed head injury. 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. 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.
        In anticipation of large numbers of troops returning home in July,
    the DVHIP screening process has been developed into a manual in order
    to assist physicians at military sites without a DVHIP component. A
    DVHIP Web-based patient assessment was also developed for physicians at
    distant sites who would like to incorporate this in their clinical
    practice.
        Another way that DVHIP is assisting military and VA providers in
    treating individuals with TBI is by disseminating thousands of copies
    of ``Heads Up: Brain Injury in Your Practice Tool Kit,'' a new
    physician tool kit to improve clinical diagnosis and management of mild
    TBI. The kit was developed by the Centers for Disease Control and
    Prevention in collaboration with DVHIP. This past year DVHIP also
    teamed up with the Veterans Health Administration to produce an
    independent TBI study program as part of the Veterans Health
    Initiative. This program offers any military or VA physician Continuing
    Medical Education credits for its completion. An online version ensures
    that clinicians serving in theater can receive up-to-date training in
    TBI care.

    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 an archive of military neurotrauma cases and statistics
    from military physicians who were deployed to Afghanistan, Kuwait, and
    Iraq. These data are still being reviewed and complied into a single
    archive that will be available for military use.
        Developed 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. These records will
    provide the basis for future efforts to follow these individuals to
    understand better the longer term implications of these injuries.
        Submitted a proposal to determine if an enhanced program of
    telephonic nursing will improve the outcome of Active Duty with mild
    brain injury. Establishing effectiveness of telephonic nursing will be
    critical to treating individuals who are at distance from other care
    providers, thus serving soldiers and saving taxpayer money.
        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. This
    study targets the symptoms of irritability, depression and anxiety
    which many soldiers report after TBI.
        Published a study on the recovery pattern from concussion from the
    West Point boxing study in Neurosurgery (Bleiberg, et al, May, 2004),
    an epidemiologic study on TBI in Fort Bragg paratroopers (Ivins et al,
    Journal of Trauma, October 2003), and an invited editorial on the
    effects of concussion (Warden, Neurology, May 11, 2004).
        Developed a free standing website www.dvbic.org to provide
    information for clinical providers, patients and family members.
        Added TBI specific questions to WRAMC's Post-Deployment
    Questionnaire which is administered to all soldiers who were recently
    deployed and sent to WRAMC.

    Additional funding is needed in fiscal year 2005 to address the
            following needs:
        Continue to provide clinical care of active duty personnel and
    veterans:
      --Expand clinical capacity to meet the need to care for an increasing
            number of injured military personnel and veterans.
      --Increase use of DVHIP resources by medical assets at other military
            and veteran sites with large troop/vet concentrations, e.g., by
            web-based initiatives, medical staff presentations by DVHIP
            personnel, etc.
      --Implement TBI outpatient clinics at DVHIP lead centers. As the
            needs of the returning veterans after blast injury are expected
            to be largely outpatient, the DVHIP will be prepared to meet
            those needs.
      --Ensure all necessary care has been received by military personnel
            and veterans who have sustained brain injuries by using the
            DVHIP Registry to identify individuals in need of additional
            treatment and support.
        Continue military and veteran specific education and training:
      --Develop an algorithm for return to duty management to be used by
            first responders in the military. These management guidelines
            will be based on new data analysis from existing concussion
            studies at West Point, Fort Bragg, and Camp Pendleton.
      --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.
      --Disseminate evidence-based guidelines on pharmacological management
            of neurobehavioral consequences of brain injury.
      --Expand the content and services of the DVHIP website. Future
            website applications will include enhanced educational
            materials and the capability to make referrals and gain access
            to care.
        Military and Veteran Relevant Clinical Research:
      --Determine the incidence of brain injury from the most commonly
            occurring blast injuries.
      --Initiate a VA 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.
      --Implement the feasibility study of 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.
      --Extend outcomes research through the evaluation of long-term work
            and duty status in DVHIP rehabilitation trial participants.

    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.
    DVHIP family support groups provide a great deal of assistance,
    education, and information to families. For example, the family support
    program at the Tampa VA also holds bi-annual reunions in which former
    patients and families come from around the country.

    Conclusion
        There is no greater time than today to support injured personnel
    sustaining brain injuries. There is nothing more patriotic than caring
    for the men and women who serve our country and protect our interests.
    Our men and women in uniform are sustaining brain injuries and need
    brain injury specific care and state of the art treatment and
    rehabilitation. The incidence of TBI is higher in theater than it has
    ever been in history, and the numbers of injured personnel present a
    challenge to the military medical system. DVHIP continues to be an
    important part of the military health care system and needs additional
    funding to continue its work.
        Please support $7 million for the DVHIP in the fiscal year 2005
    Defense Appropriations bill in the DOD Health Affairs budget under
    Operation and Maintenance to continue this important program.

                   [From the Washington Post, April 27, 2004]

                           The Lasting Wounds of War

        ROADSIDE BOMBS HAVE DEVASTATED TROOPS AND DOCTORS WHO TREAT THEM
                                 (By Karl Vick)

        BAGHDAD--The soldiers were lifted into the helicopters under a
    moonless sky, their bandaged heads grossly swollen by trauma, their
    forms silhouetted by the glow from the row of medical monitors laid out
    across their bodies, from ankle to neck.
        An orange screen atop the feet registered blood pressure and heart
    rate. The blue screen at the knees announced the level of postoperative
    pressure on the brain. On the stomach, a small gray readout recorded
    the level of medicine pumping into the body. And the slender plastic
    box atop the chest signaled that a respirator still breathed for the
    lungs under it. At the door to the busiest hospital in Iraq, a wiry
    doctor bent over the worst-looking case, an Army gunner with coarse
    stitches holding his scalp together and a bolt protruding from the top
    of his head. Lt. Col. Jeff Poffenbarger checked a number on the blue
    screen, announced it dangerously high and quickly pushed a clear liquid
    through a syringe into the gunner's bloodstream. The number fell like a
    rock.
        ``We're just preparing for something a brain-injured person should
    not do two days out, which is travel to Germany,'' the neurologist
    said. He smiled grimly and started toward the UH-60 Black Hawk thwump-
    thwumping out on the helipad, waiting to spirit out of Iraq one more of
    the hundreds of Americans wounded here this month.
        While attention remains riveted on the rising count of Americans
    killed in action--more than 100 so far in April--doctors at the main
    combat support hospital in Iraq are reeling from a stream of young
    soldiers with wounds so devastating that they probably would have been
    fatal in any previous war.
        More and more in Iraq, combat surgeons say, the wounds involve
    severe damage to the head and eyes--injuries that leave soldiers brain
    damaged or blind, or both, and the doctors who see them first
    struggling against despair.
        For months the gravest wounds have been caused by roadside bombs--
    improvised explosives that negate the protection of Kevlar helmets by
    blowing shrapnel and dirt upward into the face. In addition, firefights
    with guerrillas have surged recently, causing a sharp rise in gunshot
    wounds to the only vital area not protected by body armor.
        The neurosurgeons at the 31st Combat Support Hospital measure the
    damage in the number of skulls they remove to get to the injured brain
    inside, a procedure known as a craniotomy. ``We've done more in eight
    weeks than the previous neurosurgery team did in eight months,''
    Poffenbarger said. ``So there's been a change in the intensity level of
    the war.''
        Numbers tell part of the story. So far in April, more than 900
    soldiers and Marines have been wounded in Iraq, more than twice the
    number wounded in October, the previous high. With the tally still
    climbing, this month's injuries account for about a quarter of the
    3,864 U.S. servicemen and women listed as wounded in action since the
    March 2003 invasion.
        About half the wounded troops have suffered injuries light enough
    that they were able to return to duty after treatment, according to the
    Pentagon.
        The others arrive on stretchers at the hospitals operated by the
    31st CSH. ``These injuries,'' said Lt. Col. Stephen M. Smith, executive
    officer of the Baghdad facility, ``are horrific.''
        By design, the Baghdad hospital sees the worst. Unlike its sister
    hospital on a sprawling air base located in Balad, north of the
    capital, the staff of 300 in Baghdad includes the only ophthalmology
    and neurology surgical teams in Iraq, so if a victim has damage to the
    head, the medevac sets out for the facility here, located in the
    heavily fortified coalition headquarters known as the Green Zone.
        Once there, doctors scramble. A patient might remain in the combat
    hospital for only six hours. The goal is lightning-swift, expert
    treatment, followed as quickly as possible by transfer to the military
    hospital in Landstuhl, Germany.
        While waiting for what one senior officer wearily calls ``the
    flippin' helicopters,'' the Baghdad medical staff studies photos of
    wounds they used to see once or twice in a military campaign but now
    treat every day. And they struggle with the implications of a system
    that can move a wounded soldier from a booby-trapped roadside to an
    operating room in less than an hour.
        ``We're saving more people than should be saved, probably,'' Lt.
    Col. Robert Carroll said. ``We're saving severely injured people. Legs.
    Eyes. Part of the brain.''
        Carroll, an eye surgeon from Waynesville, Mo., sat at his desk
    during a rare slow night last Wednesday and called up a digital photo
    on his laptop computer. The image was of a brain opened for surgery
    earlier that day, the skull neatly lifted away, most of the organ
    healthy and pink. But a thumb-sized section behind the ear was gray.
    ``See all that dark stuff? That's dead brain,'' he said. ``That ain't
    gonna regenerate. And that's not uncommon. That's really not uncommon.
    We do craniotomies on average, lately, of one a day.''
        ``We can save you,'' the surgeon said. ``You might not be what you
    were.''
        Accurate statistics are not yet available on recovery from this new
    round of battlefield brain injuries, an obstacle that frustrates combat
    surgeons. But judging by medical literature and surgeons' experience
    with their own patients, ``three or four months from now 50 to 60
    percent will be functional and doing things,'' said Maj. Richard
    Gullick. ``Functional,'' he said, means ``up and around, but with
    pretty significant disabilities,'' including paralysis.
        The remaining 40 percent to 50 percent of patients include those
    whom the surgeons send to Europe, and on to the United States, with no
    prospect of regaining consciousness. The practice, subject to review
    after gathering feedback from families, assumes that loved ones will
    find value in holding the soldier's hand before confronting the
    decision to remove life support.
        ``I'm actually glad I'm here and not at home, tending to all the
    social issues with all these broken soldiers,'' Carroll said.
        But the toll on the combat medical staff is itself acute, and
    unrelenting.
        In a comprehensive Army survey of troop morale across Iraq, taken
    in September, the unit with the lowest spirits was the one that ran the
    combat hospitals until the 31st arrived in late January. The three
    months since then have been substantially more intense. ``We've all
    reached our saturation for drama trauma,'' said Maj. Greg Kidwell, head
    nurse in the emergency room.
        On April 4, the hospital received 36 wounded in four hours. A U.S.
    patrol in Baghdad's Sadr City slum was ambushed at dusk, and the battle
    for the Shiite Muslim neighborhood lasted most of the night. The event
    qualified as a ``mass casualty,'' defined as more casualties than can
    be accommodated by the 10 trauma beds in the emergency room.
        ``I'd never really seen a `mass cal' before April 4,'' said Lt.
    Col. John Xenos, an orthopedic surgeon from Fairfax. ``And it just kept
    coming and coming. I think that week we had three or four mass cals.''
        The ambush heralded a wave of attacks by a Shiite militia across
    southern Iraq. The next morning, another front erupted when Marines
    cordoned off Fallujah, a restive, largely Sunni city west of Baghdad.
    The engagements there led to record casualties.
        ``Intellectually, you tell yourself you're prepared,'' said
    Gullick, from San Antonio. ``You do the reading. You study the slides.
    But being here . . .'' His voice trailed off. ``It's just the sheer
    volume.''
        In part, the surge in casualties reflects more frequent firefights
    after a year in which roadside bombings made up the bulk of attacks on
    U.S. forces. At the same time, insurgents began planting improvised
    explosive devices (IEDs) in what one officer called ``ridiculous
    numbers.''
        The improvised bombs are extraordinarily destructive. Typically
    fashioned from artillery shells, they may be packed with such debris as
    broken glass, nails, sometimes even gravel. They're detonated by remote
    control as a Humvee or truck passes by, and they explode upward. To
    protect against the blasts, the U.S. military has wrapped many of its
    vehicles in armor. When Xenos, the orthopedist, treats limbs shredded
    by an IED blast, it is usually ``an elbow stuck out of a window, or an
    arm.''
        Troops wear armor as well, providing protection that Gullick called
    ``orders of magnitude from what we've had before. But it just shifts
    the injury pattern from a lot of abdominal injuries to extremity and
    head and face wounds.''
        The Army gunner whom Poffenbarger was preparing for the flight to
    Germany had his skull pierced by four 155 mm shells, rigged to detonate
    one after another in what soldiers call a ``daisy chain.'' The shrapnel
    took a fortunate route through his brain, however, and ``when all is
    said and done, he should be independent. . . . He'll have speech,
    cognition, vision.''
        On a nearby stretcher, Staff Sgt. Rene Fernandez struggled to see
    from eyes bruised nearly shut. ``We were clearing the area and an IED
    went off,'' he said, describing an incident outside the western city of
    Ramadi where his unit was patrolling on foot.
        The Houston native counted himself lucky, escaping with a
    concussion and the temporary damage to his open, friendly face. Waiting
    for his own hop to the hospital plane headed north, he said what most
    soldiers tell surgeons: What he most wanted was to return to his unit.

        Senator Stevens. Tell us a little bit about this foundation
    of yours, will you please, Mr. Foil? I noticed you are located
    in Charlottesville.
        Mr. Foil. Yes. Are you talking about Virginia NeuroCare or
    the NBIRTT?
        Senator Stevens. NBIRTT.
        Mr. Foil. It is a program that Dr. Zitney and I and several
    other interested people set up a number of years ago really to
    work with people in brain injury around the country, focused
    primarily on two issues. One is a better quality of life and a
    search for a cure. So we look at both ends of the spectrum: one
    over here taking care of the person who has had traumatic brain
    injury and helping them to a quality of life that we all aspire
    to; and over here, in research looking for a way to cure the
    problem.
        Senator Stevens. Where are you located?
        Mr. Foil. I live in Concord, North Carolina, sir.
        Senator Stevens. Where is this foundation located?
        Mr. Foil. Well, to be honest with you, where we hang up our
    hat.
        Senator Stevens. Where you are.
        Mr. Foil. Yes, sir.
        Senator Stevens. What about this VANC which you tell us is
    in Charlottesville. What is your relationship to that?
        Mr. Foil. That is Virginia NeuroCare. That is a facility
    run primarily for people with brain injury in Charlottesville
    and that is run by Dr. Zitney. I have nothing to do with that.
        Senator Stevens. Do you do anything with military people?
        Mr. Foil. Oh, absolutely. These people we referred to here
    in the book, both of those were at Virginia NeuroCare. The one
    who was shot in the head has been returned to active duty. He
    is now in North Carolina. And the helicopter pilot is still
    there working with the JAG Corps to rehabilitate himself fully
    to go back to active duty.
        I do not know how many we have got there, but there is a
    number. He has got about 10 or 15 patients from the military.
    We have a lot more opportunities to take people than we have
    got the ability to handle them.
        Senator Stevens. Well, that is what Senator Inouye and I
    worry about. The demand is up.
        Mr. Foil. The demand is very high and the facilities are
    very low. I myself, Senator, am building a facility in North
    Carolina where we hope to take soldiers as soon as it is
    completed, and we hope to have it open by the summer of next
    year.
        Senator Stevens. Is there a national group behind you?
        Mr. Foil. We are trying to take it national, but we do not
    have the money to do it yet. It is all not-for-profit. We do
    not ask the Government for money. This is just on our own. I
    put $5 million of my own money in this.
        Senator Stevens. Well, thank you very much. We are very
    concerned about the area you are in.
        Mr. Foil. You have every right to be concerned.
        Senator Stevens. The two of us would like to meet with some
    of your people soon to see what we might do to help you expand
    the availability of this care throughout our country.
        Mr. Foil. We appreciate that. We would like to do that. We
    have been asked to put a place in Fayetteville. We have been
    asked to put a place in Norfolk, Virginia. I think there are
    opportunities all over this country to do that and we are
    successful, Senator.
        Senator Stevens. Well, there is no question about it. Forty
    to seventy percent casualties you indicate.
        Mr. Foil. Yes, sir, and I think it is closer to 70 percent
    than it is to 40 percent.
        Senator Stevens. But that is a national thing, and with due
    respect, people from Alaska cannot quite make it down your way.
        Mr. Foil. We would be happy to put one in Alaska, Senator.
        Senator Stevens. We want to see what we can do to get----
        Mr. Foil. We would love to have one in Hawaii as well.
        Senator Stevens. So why do you not come meet with Senator
    Inouye and me and let us see what we can do to help you.
        Mr. Foil. Yes, sir. I will be glad to set that up and we
    will be back in touch with you. Thank you for your attention.
        Senator Stevens. Thank you very much. I appreciate your
    presence.
        Senator Inouye.
        Senator Inouye. No questions.
        Senator Stevens. The next witness is James Bramson,
    Executive Director of the American Dental Association. Good
    morning, Doctor.

    STATEMENT OF JAMES B. BRAMSON, D.D.S., EXECUTIVE
                DIRECTOR, AMERICAN DENTAL ASSOCIATION
        Dr. Bramson. Good morning, Mr. Chairman and Senator Inouye.
    I am Dr. Jim Bramson, the Executive Director of the American
    Dental Association (ADA). Thank you for the opportunity to
    testify today about dental programs that directly relate to the
    dental readiness of our servicemen and women.
        During World War II, more than 20 percent of the 2 million
    selectees did not meet dental requirements. In fact, this was
    the number one reason for rejection. Dental disease today
    continues to have an impact on military personnel. A 2002 DOD
    report stated that 34 percent of military personnel on active
    duty required dental care prior to deployment. Army Chief of
    Staff General Peter Schoomaker testifying last year stated that
    there were ``real problems in dental readiness,'' and he
    discussed the rotation of troops and the activation of Army
    Guard and Reserve personnel. Having enough dentists to treat
    active duty personnel is vital to keeping soldiers healthy and
    ready.
        An abscessed tooth clearly is one of mankind's most painful
    experiences, but for military personnel in a combat zone or on
    a fighter plane or in a submarine, an oral infection can only
    compromise their ability to complete their missions.
        Since the late 1990's, the dental corps has had trouble
    recruiting and retaining dental officers. One reason is the
    large pay differential between uniform and civilian dentists. A
    second reason is graduation student loan debt, which now
    averages nearly $110,000 per student. From exit interviews with
    dentists, we know they would say they would stay in the
    military if offered loan repayment. One Air Force captain said,
    if you evaluate my salary, subtract my sizeable student loan
    payments, I end up taking home the equivalent of what a staff
    sergeant of 8 years makes. And the result is that the military
    is operating at about 12 percent below dental manpower levels.
        To address this situation, the ADA recommends an additional
    $6 million per year for 3 years to allow 66 targeted health
    professions scholarship program (HPSP) dental scholarships per
    year per service. This funding would be to attract new recruits
    and it could also be used for loan repayment.
        Military dental research has had a well-established history
    with both the Army and the Navy. Their mission is to reduce the
    incidence and impact of dental disease on deployed troops. This
    research is unique and because of the global war on terrorism,
    it is on the cutting edge.
        The Army focuses on improving materials to protect the
    troops not only from oral disease but also from injury or
    hostile fire. Almost one-half of the injuries reported in Iraq
    and Afghanistan are head, neck, and eye trauma. Army dental
    researchers are developing a lighter, thinner bullet-proof face
    shield to replace the current head gear that is hot and heavy.
        In Bosnia, the Army found that over 15 percent of the
    deployed troops had dental emergencies and that 75 percent of
    those emergencies were plaque-related oral disease such as gum
    infections. The Army researchers are working on an easy and
    cost effective way to help with an anti-plaque chewing gum
    which could be included in every meal, ready-to-eat (MRE) or
    mess kit.
        Navy dental research is focused on the immediate delivery
    of dental care in the field. Those researchers have continued
    to make progress on the development of a rapid, noninvasive
    salivary diagnostic instrument for the detection of diseases
    and biological agents.
        I have here with me today a hand-held prototype of this
    device. So for those of you in the room who suffered through
    the painful anthrax swab tests 3 years ago, you waited up to 2
    weeks to get your results. This device which analyzes the
    antibodies in saliva will make those experiences obsolete. You
    put saliva in this little receptacle here, add the reagent, and
    wait about 90 seconds for the results.
        Now, these are just a few of the examples of the dental
    research projects being conducted at the Great Lakes facility.
    All of these have a direct relationship to combat medicine. All
    are targeted to improve the oral health of deployed personnel,
    and they can lead to enormous cost savings.
        The ADA strongly recommends that these research activities
    be funded at $6 million.
        Thank you again for the opportunity to testify today. Our
    written statement has additional details, and I would be glad
    to answer any questions.
        Senator Stevens. Well, thank you very much. We have noted
    those comments. Most of your requests really affect the
    Military Construction Subcommittee, not this subcommittee. We
    will call those to their attention. I do not know if you plan
    to appear before them or not.
        But we clearly share your feeling that these efforts to
    reconstruct the damage done to faces, to jaws, et cetera--there
    must be really improvement in the facilities. So we will have
    to talk to your association after talking to the Military
    Construction Subcommittee.
        Dr. Bramson. We will be happy to talk to you, Senator.
        Senator Stevens. We will do that. We promise we will get
    back to you.
        Senator Inouye.
        Senator Inouye. I will join the chairman on that.
        Senator Stevens. Thank you very much. Appreciate it.
        [The statement follows:]

                 Prepared Statement of James B. Bramson, D.D.S.

        Good morning, Mr. Chairman and members of the subcommittee. I am
    Dr. James Bramson, Executive Director of the American Dental
    Association (ADA), which represents over 149,000 dentists nationwide.
    As of September 30, 2003, there were 3,126 dentists in the military
    services. Thank you for the opportunity to testify to discuss
    appropriations for Department of Defense dental and oral-health related
    programs. My primary purpose today is to bring to your attention
    programs that directly relate to the dental readiness of our men and
    women in uniform and the efforts being made to achieve and maintain
    their dental health.
        The Public Health Service's first study of the military draft in
    World War II determined that more than 20 percent of the two million
    selectees did not meet Selective Service dental requirements. At the
    time of Pearl Harbor, ``dental defects'' led all physical reasons for
    rejection of recruits. Dental disease today continues to have an impact
    on military deployment in the Global War On Terrorism. General Peter J.
    Schoomaker, Army Chief of Staff, testified before the Senate Armed
    Services Committee on November 19, 2003 and stated ``. . . quite
    frankly we [have] real problems in dental readiness . . .--'' as he
    discussed the rotation of troops and the activation of Army Guard and
    Reserve personnel. The DOD's 2002 Survey of Health Related Behaviors
    Among Military Personnel reported that 34 percent of military personnel
    on active duty required dental care prior to deployment. What isn't
    said in the report is whether the dental care was completed prior to
    deployment and whether the treatment was of a temporary nature.
        An abscessed tooth may be one on mankind's most painful
    experiences. While most Americans have been fortunate enough to have
    never experienced a toothache, those who have know that there is little
    else that one can think about when it happens. Imagine that toothache
    in a combat zone, or while flying a fighter, or in a submarine. The ADA
    is concerned that too many soldiers, sailors, airmen and marines are
    being deployed at risk for these problems--not only because of the
    unnecessary pain they may have to endure but also the impact of that
    pain on their ability to complete their mission.

                          FUNDING FOR DENTAL READINESS

        Since the late 1990s, the dental corps have had difficulty in
    recruiting and retaining dental officers. One reason is the pay
    differential between uniform and civilian dentists. The Center for
    Naval Analysis Health Professions Retention-Accession Study I stated
    that: ``. . . the uniformed-civilian pay gap in 2000 dollars was
    substantial, averaging $69,000 per year for general dentists and
    $113,000 per year for specialists . . .'' A second reason is student
    loan debt. Many junior officers carry more than $100,000 (the national
    average is $116,000) in loans. Without loan repayment, dentists have a
    hard time making monthly payments on an 03's pay. The result is that
    all the dental corps are operating below their authorized manpower
    levels. The Department of Defense reported that all three services are
    below strength by almost 12 percent (September 2003). This figure masks
    the fact that over the past few years unfilled dental officer
    authorizations are often transferred to other medical officer corps.
        This comes at a time when dental care needed by the troops has not
    substantially decreased. In fact, with the activation of Guard and
    Reserve personnel, the demand has increased. As a result of these
    demands there has been a substantial increase in payments, in the
    millions of dollars, to private practice dentists paid through the
    Military Medical Support Office at Great Lakes Naval Training Center
    (primarily for active duty personnel) and the Federal Strategic Health
    Alliance Program known as Feds-HEAL (for activated Guard and
    Reservists). In fiscal year 2000, the military purchased $13 million of
    dental care for active duty personnel. That account is projected to
    reach $49 million in fiscal year 2004. While some of this additional
    expense is a result of the activation of Guard and Reserve personnel, a
    significant portion of these expenses is a direct result of the
    reduction of dental officers required to maintain the dental readiness
    of the active duty members. The ADA is aware that the issue of
    recruiting and retention special pays and bonuses has been studied
    within the Department of Defense, but currently nothing is being
    developed in response to these previous reports.
        The ADA believes it is time to address dental officer
    authorizations before the damage to the military dental corps reaches a
    crisis level. We, therefore, recommend additional targeted funding for
    Health Professions Scholarship Program (HPSP) dental scholarships to
    attract new dentist recruits. This additional funding could also be
    used for loan repayment to retain current military dentist as allowed
    by law.

                            MILITARY DENTAL RESEARCH

        The Army first began formal dental research with the establishment
    of the Army Dental School in 1922, which was a precursor to the
    establishment of the U.S. Army Institute of Dental Research in 1962.
    The Navy Dental Research Facility at Great Lakes was established in
    1947, which subsequently became the Naval Dental Research Institute in
    1967 (now known as the Naval Institute for Dental and Biomedical
    Research). In 1997, both activities were co-located at Great Lakes as a
    result of the Base Realignment and Closure activities of 1991. These
    research programs share common federal funding and a common goal to
    reduce the incidence and impact of dental diseases on deployed troops.
    This is unique research that is not duplicated by the National
    Institutes of Health or in the civilian community.
        The Army focuses on improving materials to protect the troops, not
    only from the effects of oral disease but also from injury or hostile
    fire. Almost half of the injuries reported in Iraq and Afghanistan are
    head, neck and eye trauma. Army researchers are developing a lighter,
    thinner anti-ballistic face shield to replace the current headgear that
    weighs almost 8 pounds and is hot to wear. This is analogous to the
    development of the lighter and more effective body armor currently
    being used by our ground troops in Afghanistan and Iraq.
        Plaque-related oral disease, including trench mouth, account for as
    much as 75 percent of the daily dental sick call rate in deployed
    troops. Even soldiers who ship out in good oral health can become
    vulnerable to these severe gum diseases if stationed in combat areas
    where access to good oral hygiene is difficult. An easy and cost
    effective way to address these conditions is the development of an
    anti-plaque chewing gum, which could be included in every meals ready
    to eat (MRE) or mess kit.
        For troops stationed in desert combat zones, dehydration is a
    serious problem. Often the soldier is not aware that there is a problem
    until he or she is debilitated, obviously not a good thing in a hostile
    environment. The Army researchers have been working on developing a
    sensor to monitor hydration rates that could be bonded to a soldier's
    tooth. Health care personnel at a remote site could monitor the sensor
    and alert the deployed forces to administer fluids before the situation
    becomes critical.
        Navy research focuses more on the immediate delivery of dental
    care. For instance, keeping the war fighter in the field is a high
    priority. Navy researchers are developing dental materials that are
    more compact and portable, that can be used by non-dental personnel to
    manage a wide variety of urgent dental problems. Last year in Iraq, a
    Marine line commander in the field had to have a temporary filling
    replaced 3 or 4 times. This required a trip to a field dental clinic
    and the services of a dentist, taking this commander away from his
    troops. A new dental material being developed by the Navy will allow a
    corpsman to replace these temporary fillings on the spot and without
    the need for the commander to spend time away from his troops and the
    mission. A lesson learned from this situation is that the currently
    available dental materials are not strong enough for the field
    environment, especially the desert climate. More research is needed to
    perfect this far-forward field dental dressing, but once perfected, it
    can be used by other agencies like NASA or the Indian Health Service,
    which also operate in remote areas.
        Naval researchers have continued to make progress on the
    development of rapid, hand-held, non-invasive salivary tests for the
    detection of military relevant diseases, such as tuberculosis and
    dengue fever, as well as for biological warfare agents. A prototype
    model of such a hand-held unit developed by the Navy researchers at
    Great Lakes is being tested. This unit will be able to test for
    numerous chemical and biological agents and provide troops in the field
    a positive or negative determination within a matter of minutes. The
    implications for Homeland Security are quite obvious.
        Last, but not least, the Iraqi war environment has identified an
    additional research area: the effects of sand on dental equipment. The
    unique composition of the sand in Iraq has caused dental equipment to
    break down and fail in the field. Because the sand in Iraq is stickier
    and more like talcum powder than grittier American sand, the Iraqi sand
    tends to cling to instruments and equipment. Navy researchers are
    analyzing the effects of the Iraqi sand on the portable dental
    equipment with the goal of developing new mobile delivery systems that
    can be used in the desert environment. This research has obvious
    implications for medical equipment or any equipment that is easily
    fouled by the desert sands.
        These are just a few of the dental research projects being
    conducted at the Great Lakes facility. All have a direct relationship
    to combat medicine, are targeted to improve the oral health of deployed
    personnel and can lead to enormous cost savings for forces in the
    field. Furthermore, while the Army and the Navy do not duplicate the
    research done by the National Institute of Dental and Craniofacial
    Research, many of their findings will have implications within the
    civilian community or other Federal Agencies. The ADA strongly
    recommends that the funding for the Army and Navy dental research
    activities at Great Lakes be funded at $6 million to expedite this
    research for the deployed forces.

                  OTHER MILITARY DENTAL APPROPRIATIONS ISSUES

        There are two other matters that the ADA would like to bring to the
    Committee's attention and are related to issues discussed during the
    Committee's April 28th hearing with the Surgeon Generals. First, we are
    concerned about the dental care for our returning troops through the
    Veteran's Administration. Following Desert Storm deactivated Reserve
    and Guard personnel were authorized a dental benefit upon separation.
    Fortunately, both the length of the Gulf War and the need for
    activating Reserves and Guard were limited. Approximately $17 million
    was spent to provide this dental care. Once again, the Veteran's
    Administration is anticipating that a significant number of returning
    Reservists and Guard personnel will require and be authorized dental
    care upon their release from active duty in the Global War on
    Terrorism. And since the Reserve and Guard activations are projected to
    remain significant for the foreseeable future, then the demand for
    dental care following deactivation will also continue. While the exact
    amount of money required for this care is not yet known, the ADA
    believes that it will easily exceed the $17 million required following
    Desert Storm and for a sustained basis.
        The second issue relates to a military construction project for the
    dental clinic at Lackland Air Force Base. Some of the soldiers who have
    suffered head and neck injuries in Iraq are being treated at Lackland
    for facial reconstruction. Oral surgeons there are using the highly
    sophisticated computer programs to make 3-D images to recreate
    shattered jaws.
        The proposed construction will consolidate all dental activities on
    Lackland AFB and Kelly AFB to the Dunn Dental Clinic. There are
    currently two separate dental treatment activities at Lackland: MacKown
    Dental Clinic and Dunn Dental Clinic. The MacKown Clinic is 44 years
    old and has long outlived its usefulness. It predates the current Joint
    Commission on Accreditation of Healthcare Organizations (JACHO),
    Occupational Safety and Health Administration (OSHA) and infection
    control standards. The MacKown Clinic also houses three of the Air
    Force's dental specialty training programs that have outgrown that
    facility significantly over the last twenty years. The clinic at Kelly
    Air Force Base will be closed as a result of highway construction. The
    patients currently seen at Kelly will now be seen at the Dunn Clinic
    and there is insufficient capacity to absorb these patients.
        The planned addition to the existing Dunn Dental Clinic building
    will provide an additional 90 dental treatment rooms on two floors that
    meet current ambulatory surgery codes. The proposed facility will also
    provide space for a dental laboratory to meet regional dental workload
    demands, support the dental resident training, and dental research
    currently part of the MacKown facility. The new addition will also
    provide necessary classroom space and suitable audio-visual,
    teleconference, and distance learning capabilities. The ADA requests
    that the Committee appropriate $1.5 million for the design phase of
    this construction project.
        The ADA thanks the Committee for allowing us to present these
    issues related to the dental and oral health of our great American
    service men and women.

        Senator Stevens. Our next witness is Captain Robert Hurd,
    Congressional Liaison for the United States Naval Sea Cadet
    Corps. Good morning.

    STATEMENTS OF:
            CAPTAIN ROBERT C. HURD, UNITED STATES NAVY (RET.),
                CONGRESSIONAL LIAISON, UNITED STATES NAVAL SEA CADET CORPS
            PETTY OFFICER 1ST CLASS KYLE DALY, UNITED STATES NAVAL SEA
                CADET CORPS

        Mr. Hurd. Good morning, Mr. Chairman, Senator Inouye. I
    would like to thank the committee for the tremendous support of
    our program and our 10,000 cadets, one of whom, Petty Officer
    1st Class Daly will make our statement this morning.
        Senator Stevens. Fine. Nice to have you here, sir.
        Mr. Daly. Mr. Chairman, Senator Inouye, good morning. I am
    United States Naval Sea Cadet Corps Petty Officer 1st Class
    Kyle Daly, leading petty officer of the Hospital Corpsman,
    Master Chief, U.S. Navy (HMCM) William Marsh Battalion as well
    as a sophomore at a Catholic high school in Hyattsville,
    Maryland. It is an honor and a privilege to speak to you today
    on behalf of the Naval Sea Cadet Corps.
        There are now over 10,000 young men and women, ages 11 to
    17, across the United States and its territories proudly
    wearing the same uniform I wear before you today. They are
    supported by over 2,500 adult volunteer Naval Sea Cadet Corps
    officers, instructors, and midshipmen.
        The United States Naval Sea Cadet Corps is a
    congressionally chartered youth development and education
    program supported by the Navy League and sponsored by the Navy
    and Coast Guard. The program's main goals are the development
    of young men and women, promoting interest and skill in the
    areas of seamanship and aviation, while instilling a strong
    sense of patriotism, integrity, self-reliance, honor, courage,
    and commitment, along with other qualities which I believe will
    mold strong moral character and self-discipline in a drug-and
    gang-free environment.
        After completing recruit training, sea cadets may choose
    from an almost infinitely wide variety of 2-week training
    courses in their following summers, including training aboard
    Navy and Coast Guard vessels. We drill one weekend per month
    and complete Navy correspondence courses for advancement, this
    being the basis for accelerated promotion if a cadet should
    choose to enlist in the Navy or Coast Guard.
        Four hundred eighty-two former sea cadets now attend the
    U.S. Naval Academy. Between 400 and 600 enlist in the armed
    services annually, pre-screened, highly motivated and well-
    prepared. Prior sea cadet experience has been proven to be an
    excellent indicator of a potentially career success rate both
    in and out of the military. Whether or not a cadet chooses a
    service career, we all carry forth the values of citizenship,
    leadership, and moral courage that I believe will benefit
    ourselves and our country.
        The major difference between this and other federally
    chartered military youth programs is that the sea cadets are
    responsible for their own expenses, including uniforms, travel,
    insurance, and training costs, which can amount to $400 to $500
    a year. The corps, however, is particularly sensitive to its
    policy that no young man or woman is denied access to this
    program due to their socioeconomic status. Some units are
    financed in part by local sponsors.
        This support, while greatly appreciated, is not enough to
    sustain all cadets. All federally appointed funds over the past
    4 years have been used to help offset cadets' out-of-pocket
    training costs, as well as to conduct background checks for the
    adult volunteers. However, for a variety of reasons, including
    inflation, an all-time high cadet enrollment, base closures and
    reduced base access due to terrorist alerts, reduced the float
    training due to the situation in Iraq. The current amount of
    funding support can no longer sustain the program.
        The Sea Cadet Corps considers it a matter of urgency that
    we respectfully request your consideration and support through
    the authorization of appropriations in the full amount of $2
    million for the 2005 fiscal year.
        I regret that this time precludes our sharing the many
    stories that Captain Hurd has shared with members of your
    staffs this year, pointing out the many acts of courage,
    community service, and successful youth development of my
    fellow sea cadets, as well as those who are so gallantly
    serving our armed forces in Iraq, Afghanistan, and around the
    world. These stories and many more like them are unfortunately
    the youth stories that you do not always read about in the
    press.
        I thank you for this opportunity to speak today. I, as does
    the entire Sea Cadet Corps, appreciate your past and continued
    support of this fine program. It would be my pleasure to answer
    any questions you might have at this point.
        Senator Stevens. Well, thank you very much. Captain Hurd,
    you brought a fine representative of your organization.
        Mr. Hurd. Yes, sir.
        Senator Stevens. You remind me of the first time I
    testified before Congress. I read the third sentence and said,
    ``period.''
        I had memorized it so well. You know, one of those things.
        But we do appreciate what you said. We appreciate who you
    represent and congratulate you for your ambition to be part of
    the Navy.
        Mr. Daly. Thank you very much, sir.
        Senator Stevens. Captain, thank you. We do not need
    anything more than what you produced. We will assist you in
    every way we can.
        Mr. Daly. Thank you very much, sir.
        Senator Stevens. Senator Inouye.
        Senator Inouye. No. Just congratulations.
        [The statement follows:]

                  Prepared Statement of Captain Robert C. Hurd

    Request
        Funded since fiscal year 2001, continued Congressional
    appropriation in the Navy Recruiting Budget (O&M Navy--Title II, Budget
    Activity 3) of the un-funded budget requirement is essential for
    continuation of the present level of Naval Sea Cadet training as well
    as to allow expansion into more communities. Unlike other federally
    chartered military youth groups, the Sea Cadets pay for almost all
    their own 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, is needed to
    increase access by America's youth regardless of economic or social
    background and to develop the fine citizens our country needs and
    deserves.

    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
    Vice-Chairman of the Board serves also as the Corps' National
    President. A full-time Executive Director and small staff in Arlington,
    VA administer NSCC's day-to-day operations. These professionals work
    with volunteer field representatives, unit commanding officers, and
    local sponsors. They also collaborate with Navy League councils and
    other civic, or patriotic organizations, and with local school systems.

    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 in military service. For example, limited travel abroad and in
    Canada may be available, as well as the opportunity to board 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, 166 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
    practical, hands-on and classroom 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 efforts to serve America's youth. The Sea 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 USNSCC
    insignia, is authorized and worn. Cadet Corps officers receive no pay
    or allowances. Yet, they do deserve some benefits such as limited use
    of military facilities and space available air travel in conjunction
    with carrying out their 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
    programs.

    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, Coast Guard, Marine and other service
    member instructors.
        Cadets receive classroom and hands on practical instruction in
    basic military requirements, military drill, water and small boat
    safety, core personal values, social amenities, drug/alcohol abuse,
    cultural relations, naval history, naval customs and traditions, and
    nautical skills. Training may be held onboard ships, small boats or
    aircraft, depending upon platform availability, as well as onboard
    military bases and stations. In their training, cadets also learn about
    and are exposed to a wide variety of civilian and military career
    opportunities through field trips and educational tours.
        Special presentations by military and civilian officials augment
    the local training, as does attendance at special briefings and events
    throughout the local area. Cadets are also encouraged, and scheduled,
    to participate in civic activities and events to include parades,
    social work, and community projects, all part of the ``whole person''
    training concept.
        For all Naval Sea Cadets the training during the first several
    months is at their local training site, and focuses on general
    orientation to, and familiarization with, the entire Naval Sea Cadet
    program. It also prepares them for their first major away from home
    training event, the two weeks recruit training which all Sea Cadets
    must successfully complete.
        The Navy League Cadet Corps training program teaches younger cadets
    the virtues of personal neatness, loyalty, obedience, courtesy,
    dependability and a sense of responsibility for shipmates. In
    accordance with a Navy orientated syllabus, this education prepares
    them for the higher level of training they will receive as Naval Sea
    Cadets.

                Summer Training
        After enrolling, all sea cadets must first attend a two week
    recruit training taught at the Navy's Recruit Training Command, at
    other Naval Bases or stations, and at regional recruit training sites
    using other military host resources. Instructed by Navy or NSCC Recruit
    Division Commanders, cadets train to a condensed version of the basic
    course that Navy enlistees receive. The curriculum is provided by the
    Navy, and taught at all training sites. In 2003 there were 22 Recruit
    training classes at 19 locations, including 3 classes conducted over
    the winter holiday school break. These 20 plus nationwide regional
    sites are required to accommodate the increased demand for quotas and
    also to keep cadet and adult travel costs to a minimum. Over 2,600
    Naval Sea Cadets attended recruit training in 2003, supported by
    another 240 adult volunteers.
        Once Sea Cadets have successfully completed recruit training, they
    may choose from a wide variety of advanced training opportunities
    including basic/advanced airman, ceremonial guard, seamanship, sailing,
    amphibious operations, leadership, firefighting and emergency services,
    submarine orientation, seal and mine warfare operations, Navy diving,
    and training in occupational specialties including health care, legal,
    music, master-at-arms and police science, and construction.
        The Naval Sea Cadet Corps is proud of the quality and diversity of
    training opportunities offered to its' Cadet Corps. For 2003
    approximately 8,000 ``training opportunities'' were formally advertised
    for both cadets and adults. Another 900 ``opportunities'' presented
    themselves through the dedication, resourcefulness and initiative of
    the adult volunteer officers who independently arranged training for
    cadets onboard local bases and stations. This locally arranged training
    represents some of the best that the NSCC has to offer and includes the
    consistently outstanding training offered by the U.S. Coast Guard. The
    total cadet and adult opportunity for 2003 stood at about 9,000 quotas,
    including all recruit training. Approximately 8,000 NSCC members, with
    about 7,000 being cadets, stepped forward and requested orders to take
    advantage of these training opportunities. Cadets faced a myriad of
    challenging and rewarding training experiences designed to instill
    leadership and develop self-reliance. It also enabled them to become
    familiar with the full spectrum of Navy and Coast Guard career fields.
        This ever-increasing participation once again reflects the
    popularity of the NSCC and the positive results of federal funding for
    2001 through 2003. The NSCC continues to experience increased recruit
    and advanced training attendance of well over 2,000 cadets per year
    over those years in which federal funding was not available. The events
    of 9/11 and the resulting global war against terrorism did preclude
    berthing availability at many bases and stations; however, the NSCC
    continued to grow as other military hosts offered their resources in
    support of the NSCC. 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 entire year. One result of this training is that approximately
    10 percent of the Midshipman Brigade at the U.S Naval Academy report
    having been prior Naval Sea Cadets, most citing summer training as a
    key factor in their decision to attend the USNA.

                Training highlights for 2003
        The 2003 training focus was on providing every cadet the
    opportunity to perform either recruit or advanced training during the
    year. To that end, emphasis was placed on maintaining all new training
    opportunities developed over the last several years since federal
    funding was approved for the NSCC. This proved to be a significant
    challenge with reduced available berthing at DOD bases as a result of
    recalled reservists and deployment of forces in the war on terrorism.
    Regardless, we were successful in most of our plans. Included among
    these were classes in sailing and legal (JAG) training, expanded SEAL
    orientation opportunity, SCUBA classes, more seamanship training
    onboard the NSCC training vessels on the Great Lakes, and additional
    honor guard training opportunities. Other highlights included:
      --Expanded recruit training opportunity by increasing recruit
            training evolutions from 15 in 2002 to 22 in 2003.
      --Kept cadet training cost to $30 for 1 week and $60 for 2 weeks plus
            transportation; only a $5 and $10 increase over 2002, all
            during a period of escalating costs and increasing enrollment
            while the grant was maintained at $1 million.
      --Expanded use of Army and State National Guard facilities to
            accommodate demand for quotas for recruit training.
      --Maintained expanded recruit training and advanced training
            opportunity higher than any prior year.
      --Improved adult professional development and education through much
            needed updates of the NSCC Officer Professional Development
            courses.
      --Added first class ever with Navy Explosive Ordnance Disposal/Mobile
            Diving Salvage Units in Norfolk, Virginia.
      --Nearly doubled the number of MAA classes and doubled the number of
            cadets taking this training.
      --Maintained expanded YP training on the Great Lakes.
      --Maintained placement of 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.
      --Continued the popular, merit based, International Exchange program
            although reduced for Asian countries due to the SARS concern.
      --Graduated over 290 cadets from the NSCC Petty Officer Leadership
            Academies, (POLA).
      --Maintained placement of Cadets onboard USN ships under local orders
            as operating schedules and opportunity permitted.
      --As has been the case in 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 Program (IEP)
        The NSCC continued in 2003, for the second year, its' redesigned
    and highly competitive, merit based, and very low cost to the cadet,
    International Exchange Program. Cadets were placed in Australia, United
    Kingdom, Sweden, Netherlands, and Bermuda to train with fellow cadets
    in these host nations. The NSCC and Canada did maintain their
    traditional exchanges in Nova Scotia and British Columbia, and the NSCC
    hosted visiting cadets in Norfolk and at Fort Lewis, WA for two weeks
    of U.S. Navy style training.

                Navy League Cadet Training
        In 2003, almost 1,350 Navy League Cadets and escorts attended Navy
    League Orientation Training at 17 sites nationwide. The diversity in
    location and ample quotas allowed for attendance by each and every
    League Cadet who wished to attend. Approximately 250 League cadets and
    their escorts attended advanced Navy League training where cadets learn
    about small boats and small boat safety using the U.S. Coast Guard's
    safe boating curriculum. Other advanced Navy League training sites
    emphasize leadership training. Both serve the program well in preparing
    League cadets for further training in the Naval Sea Cadet Corps, and
    particularly for their first ``boot camp.'' The continuing strong
    numbers of participants for both Orientation and Advanced training,
    support not just the popularity of the NSCC program but also the
    positive impact the federal training grant has had in helping cadets
    afford the training and helping them take advantage of the increased
    opportunities available to them.

                Training Grants
        Through local sponsor support and the federal grant, almost every
    Cadet who desired to attend summer training had the opportunity. This
    milestone is a direct result of the strong NLUS council and sponsor
    support for NSCC/NLCC cadets 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.
        Since the inception of the scholarship program, 176 scholarships
    have been awarded to 166 Cadets (includes some renewals) totaling over
    $192,900.

    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 training
    illustrates 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 80 percent of the units
    reporting, the survey indicates that 564 known Cadets entered the armed
    forces during the reporting year ending December 31, 2002. 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 482 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 taxpayer 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
    $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 in fiscal years 2001,
    2002, and 2003, and at $1,500,000 in fiscal year 2004 (of the
    $2,000,000 requested), these funds 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 funds received, NSCC receives
    under $1,000,000 per year from other sources, which includes around
    $250,000 in enrollment fees from Cadets and adult volunteers
    themselves. For a variety of reasons, at a minimum, this current level
    of funding is necessary to sustain this program and the full $2,000,000
    would allow for program expansion:
      --All-time high in number of enrolled Sea Cadets (and growing) and
            general inflation.
      --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 and 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 would be
    barely sufficient to handle cost increases.
        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 2005.

        Senator Stevens. Our next witness is Heather French Henry,
    Miss America 2000, for the National Prostate Cancer Coalition.
        Being a prostate cancer survivor, I am pleased to see you,
    but I do not think you have any risk.

    STATEMENT OF HEATHER FRENCH HENRY, MISS AMERICA 2000 ON
                BEHALF OF THE NATIONAL PROSTATE CANCER
                COALITION
        Ms. Henry. No, I do not. Thank goodness.
        Mr. Chairman and Senator Inouye, I would like to thank you
    for the opportunity to come and speak before you today. Of
    course, I am Heather French Henry, former Miss America 2000.
    But before I was Miss America, I was the daughter of a disabled
    Vietnam veteran, and for years, even before my Miss America
    career, had the privilege of working with veterans all across
    the country and especially those who had prostate cancer as a
    direct result from Agent Orange.
        Now, I never thought, after working with all those
    veterans, that I would have prostate cancer within my family.
    Fortunately, my father has not been diagnosed with prostate
    cancer as a veteran, but my husband, former Lieutenant Governor
    of Kentucky and an orthopedic surgeon, is a prostate cancer
    survivor.
        You can imagine. I was 8 months pregnant, about 1\1/2\
    weeks away from delivering our second child, when he sat me
    down to tell me that he had been diagnosed with prostate
    cancer. The ``cancer'' word, the big ``C'' word we call it, in
    any family, when it is brought up, is scary let alone to an 8-
    month pregnant woman.
        Now, fortunately, Stephen and I had some knowledge of
    prostate cancer just because he was a physician. However, it is
    ironic that as a physician, he was not aware of his extensive
    family history of prostate cancer because prostate cancer just
    is not widely discussed. It is not like breast cancer which has
    become even a table topic at dinner discussion, but prostate
    cancer, of course, is not widely discussed among men, let alone
    other family members within their family or their friends.
        Steve and I had a difficult task. How do you deal with your
    husband having prostate cancer who is a public figure? How do
    you deal with that in media? Because, of course, as you know,
    media speculation is not good on any front when it comes to a
    public career. Steve and I decided that we would be very open.
    Now, we were having to deal with this personally, as well as
    publicly while he was still in office. We decided to be very
    open with his prostate cancer, and the press conference that we
    held took us 2\1/2\ hours to explain to members of the media
    just what prostate cancer was and how it could be treated and
    the various forms of treatment and the alternatives that
    Stephen had. We wanted to destroy any myth whatsoever about
    speculation about his life, his career, any of his future, but
    it took us 2\1/2\ hours to do that.
        Now, why did it take us 2\1/2\ hours? Gentlemen, I do not
    need to tell you that awareness of any issue is much needed,
    but without the funding for research--with that funding comes
    along the awareness. What we are asking today is that you help
    those out there by increasing the funding to $100 million to
    the DOD prostate cancer research program.
        I am sitting before you today as a wife of a prostate
    cancer survivor, but also as a public servant who has had to
    deal with this publicly. We choose to do that just to provide
    hope for men out there and their families that we were going to
    be advocates. Stephen and I have started the Kentucky Prostate
    Cancer Coalition within Kentucky. The grassroots support just
    is not there for prostate cancer, and most of that has to do
    because of the lack of funding for prostate cancer research.
        Now, fortunately, Stephen came through his surgery that he
    had at Johns Hopkins University Hospital successfully, and I
    did not breathe a sigh of relief until his first prostate
    specific antigen (PSA) test which came out with excellent
    results. But even then, his doctor who did his surgery could
    not clearly identify the future of prostate cancer. A gentleman
    who does this surgery probably 1,700 times during 1 year says
    to me we cannot tell you what the future of prostate cancer is
    because there is not enough research and funding out there
    because this disease is constantly changing.
        That is my fear, is that we are not going to be able to
    provide hope for all of the men out there and their families
    about the future of prostate cancer, and the younger
    generations that, of course, it is hitting. My husband who was
    49 when he was diagnosed speculates to have had it when he was
    47. Other friends of ours are getting it at 39 and in their
    40's. So we are just asking for funding to be able to project
    into the future.
        As you know, prostate cancer is the most commonly diagnosed
    cancer within men, accounting for 230,000 cases, 30,000 deaths
    in 2004. Like Stephen, many of those will be diagnosed in their
    40's and 50's. But that is why Stephen and I are here today
    with the National Prostate Cancer Coalition (NPCC).
        To properly fight the war on prostate cancer for families
    like mine, your committee must restore $100 million to the
    Department of Defense prostate cancer research program
    administered by the congressionally directed medical research
    program. Of course, in 2001, it was $100 million, but it had
    been bumped down to $85 million. So we are really just asking
    to restore that final step needed, of course, to conduct human
    clinical trials research. That is so important because without
    that extra $15 million, how do we advance into the research and
    technology of this?
        My husband chose a radical surgery and it is one of several
    forms of treatment, which of course was successful. But with
    all current primary treatments for the disease, there are side
    effects, but without the $100 million, the program is unable to
    test new treatments and thus get new products to patients that
    may not impair the quality of their lives.
        Thanks to your leadership, the congressionally directed
    medical research program has become the gold standard for
    administering cancer research. The program cannot fight the war
    against prostate cancer on its own, and last year the committee
    requested that the Defense Department, in consultation with the
    Institute of Medicine, evaluate ways for the program to
    collaborate with the private sector, which of course is so
    needed. Both the NPCC and I and my husband agree. Through
    public and private partnerships prostate cancer research can
    work collectively and strategically to produce new
    preventatives, diagnostics, and treatments to improve the
    quality of their life for prostate cancer patients like my
    husband.
        Prior to your directive, NPCC began discussing methods of
    public-private partnerships when it convened, along with the
    DOD prostate cancer research program and the National Cancer
    Institute, the Prostate Cancer Research Funders Conference in
    2000.
        The Prostate Cancer Research Funders Conference brings
    together representatives of all Government agencies that fund
    prostate cancer research, along with their counterparts in the
    private sector, which I cannot even tell you how important that
    is. Other participants include the Veterans Health
    Administration, the Centers for Disease Control and Prevention,
    and the Food and Drug Administration, Canadian and British
    Government agencies, and private foundations and organizations
    and representatives from the industry. Members of the
    conference have come together to focus on shared objectives and
    address commonly recognized barriers within the research.
    Through this collaborative approach, we can create a unified
    front to finally beat prostate cancer once and for all.
        Again, on behalf of my entire family, NPCC, and all of
    those prostate cancer patients, I want to thank you for
    allowing me to be here today and for your leadership already.
    Most importantly in the future, I want to be able to tell my
    two little girls that a disease that their daddy had is no
    longer a killer of men. So we are not only asking you to
    provide this research money for men everywhere, but also for
    their wives, their sons, and of course, their daughters. So
    thank you for letting me be here today. I want to encourage you
    to restore that research funding for a much needed disease.
        Senator Stevens. Thank you very much.
        Questions, Senator?
        Senator Inouye. I think we should note that Senator Stevens
    is the father of the defense prostate cancer research program.
        Senator Stevens. Thank you very much.
        Ms. Henry. Thank you. Appreciate it.
        [The statement follows:]

                   Prepared Statement of Heather French Henry

        Mr. Chairman and distinguished members of the committee, thank you
    for the opportunity to share my thoughts. My name is Heather French
    Henry, and I was crowned Miss America in 2000. I am here today on our
    behalf of my husband, my children and families all over America who
    have been touched by prostate cancer.
        I was pregnant with our second child when I found out that my
    husband, Stephen, then the Lieutenant Governor of Kentucky, had
    prostate cancer. In fact, I was two weeks away from my delivery date
    when he sat me down to tell me about his diagnosis. As a young married
    couple, the thought of prostate cancer or any form of cancer, was not
    even in our wildest imagination. After all, Stephen was the picture of
    health for a forty-nine year old man. He was active. He played
    basketball. He could even out run me on his worst day!
        Ironically, my husband is a physician. One might think that doctors
    should be on top of their health status! However, one peculiar night, I
    discovered Steve in pain, sitting on the steps holding his hand to his
    chest. Usually not one prone to dramatics, I was immediately concerned.
    Stephen went to the hospital and began a long stream of physicals over
    a period of two weeks. One physical after another showed my husband in
    good health until the day he received the results of a prostate-
    specific antigen (PSA) test. Only because of a simple unrelated chest
    pain did my husband take the initiative to get tested and find out
    about his PSA level. Had he not gone to the doctor at all, his
    diagnosis may still be unknown. Prostate cancer is a silent killer, and
    men must be encouraged to be vigilant in detecting it.
        Following the results of his PSA test, we began to wonder if
    Stephen's family had a history of the disease. After a call to his
    mother, we found out that his father had prostate cancer later in his
    life. If a man has one close relative with prostate cancer, his risk of
    the disease doubles; with two relatives, the risk increases fivefold.
    Therefore, it should have been no surprise that Stephen's chances of
    developing the disease were significant--but it was.
        Once I found out about my husband's prostate cancer I couldn't help
    but think, as an eight-month pregnant woman of 28, ``my husband has
    CANCER!'' I felt terrified which was magnified a thousand times by my
    pregnant condition. The hardest part was that we had to be silent about
    his condition because of the media. If prostate cancer was something
    that was widely understood and recognized, such as breast cancer, I
    don't feel that we would have had to be so cautious. However, because
    of the great misunderstanding and lack of knowledge the media and the
    public have about the disease, we had to strategize about how to deal
    with this situation, not only personally but publicly.
        I certainly was in no condition to deal with all of this, but
    prostate cancer doesn't wait for the ``right'' time. It added so much
    stress to my already aching mind and body that I feared it might affect
    my delivery. Fortunately, it didn't, and we are once again a happy
    family.
        Two days before he had surgery, Stephen held a press conference for
    all of the Kentucky media. It was the longest press conference in which
    I had ever participated. It became evident there was a lack of
    knowledge that even the press had about the seriousness of prostate
    cancer. We spent almost two hours describing prostate cancer, how it
    affected us as a family and how it could be treated. So much had to be
    explained and we wanted everyone on the same page. The last thing we
    wanted was for the press to speculate about Steve's cancer, his job, or
    even his life. We held the press conference to create awareness,
    educate and add hope to those families out there that may be struggling
    with prostate cancer. The next day we left for Johns Hopkins Medical
    Center in Baltimore.
        Stephen decided after educating himself and seeking the advice of
    friends and colleagues that he would choose the most aggressive route
    of surgery. Getting mixed views about timelines for surgery and knowing
    time was no friend to any cancer, Stephen wanted to act quickly. Three
    weeks after our daughter was born Stephen underwent surgery. Coupled
    with the fact that I had just given birth and really needed to have the
    baby with me, this was an extremely hard time for our family.
        I am usually a very strong woman emotionally and spiritually but
    not the day of Stephen's surgery. When we arrived at the hospital I was
    immediately told I could not take my infant daughter into the surgical
    wing. So there I was stuck in the lobby of one of the largest hospitals
    in the country with a newborn baby, a husband with cancer, and I was
    mentally lost. All I could do was sit and cry silently in the lobby
    while people walked by adding nods of compassion. I had no idea how the
    surgery would go. Reinforcing the lack of public discussion on the
    disease, no one could give us a clear story about the most affective
    treatments. What if the surgery didn't work? What if the cancer had
    spread? What if I was going to lose the love of my life and be left
    alone with two children? What if my children had to grow up not knowing
    what a wonderful man their father was?
        No one knows when his or her time on earth is going to end, and I
    was not ready for Steve's name to be called. I eventually called a
    friend to fly up to Baltimore to pick up my daughter after Stephen's
    surgery was over. But my despair continued.
        Even though the doctor seemed hopeful, my heart felt bleak. All
    that kept ringing through my head was the doctor describing about how
    prostate cancer evolves and changes with time and that he could make no
    predictions because more research needed be done to become more
    familiar with the nature of prostate cancer. It was nothing short of a
    nightmare for me. Ironically, between the two of us, Stephen handled it
    much more gracefully than I did. Four days after a successful surgery,
    we returned to Kentucky.
        I will never forget my husband's reaction to me asking if he would
    like a wheel chair for the walk through the airport. His pride was
    clearly hurt. Surgery was one thing, but the aftermath post operation
    is quite another. Stephen was to keep his catheter in for a few weeks,
    and that made the flight home quite memorable. The look on his face
    when I asked to tie his shoes was a clear indication that he did not
    want people to know or feel sorry for him. This outraged me. It
    concerned me that the masses didn't know more about prostate cancer and
    that my husband, or any man, could not feel comfortable dealing with
    his condition. It was one thing to talk about having prostate cancer
    but quite another to show people up front a post-operative face. It was
    not an easy flight, nor were the next weeks at home trying to make my
    husband rest. Unfortunately, his demeanor at that time reflects the
    overall attitude of many men and society: a reluctance to openly
    address prostate cancer and the need to be screened.
        Life didn't really seem to show a ray of hope to me until his first
    post-operative PSA test. His results were excellent! I finally breathed
    a sigh of relief. Steve was fortunate. He had caught his prostate
    cancer early, but others we know have not been so lucky.
        Prostate cancer is the most commonly diagnosed cancer in men,
    accounting for 33 percent of all cancer cases in men. Like Stephen,
    approximately 230,000 men will learn they have prostate cancer in 2004.
    Many of those diagnosed will be in their 40s and 50s. Roughly 30,000
    will die from the disease. As we have seen, those with a family history
    of prostate cancer are more susceptible to the disease. Also, veterans
    and others exposed to defoliants and African American men remain at
    higher risk. Currently, there is no cure for advanced or metastasized
    prostate cancer.
        I feel that because my husband is a doctor he was able to make wise
    decisions about his cancer. However, not everyone who currently has or
    will be diagnosed with prostate cancer is a doctor or will even have
    access to a doctor.
        The reason I am here today sharing my personal story with you is to
    encourage you to make an appropriate investment in prostate cancer
    research to help find a cure. We hear slogans everyday about ``races
    for the cure'' but the eradication of prostate cancer will never see
    its day unless it is talked about and taken seriously with proper
    funding for research. That's why, my husband and I have partnered with
    the National Prostate Cancer Coalition (NPCC). We know that an
    investment in research leads to better prevention, detection and
    treatment--and that greater understanding and awareness of the disease
    leads to hope--hope that the millions of men who will be diagnosed with
    prostate cancer have the chance at a long healthy life with their
    families.
        Among men, prostate cancer is rarely discussed, and when it is,
    it's done ``behind closed doors.'' My own husband was not even fully
    aware of his family history. Prostate cancer is not something to be
    ashamed of; it is a disease that needs to be recognized. Just as breast
    cancer has become a common dinner table topic, so should prostate
    cancer.
        I have worked for many years with Vietnam veterans who have
    prostate cancer as a result of Agent Orange exposure but I never
    thought I would encounter it in my family. Having long been a champion
    of veterans' issues, including the work done through my own foundation,
    I have seen the burden this disease places on those who have protected
    our freedom. The Department of Veterans Affairs (VA) estimates that
    there are roughly 23.5 million male veterans living in the United
    States. That means approximately 3.9 million veterans will be diagnosed
    with prostate cancer. The Veterans Health Administration currently
    estimates that nearly 5,800 patients in its system are diagnosed with
    prostate cancer each year. This nation must do all it can to keep these
    men from harm's way, after they have done the same for all Americans.
    What I am asking from you today is to take care of the men who served
    in uniform, past present and future.
        The Department of Defense (DOD) estimates that the direct health
    care costs of prostate cancer on the military are expected to be over
    $42 million in fiscal year 2004. Nearly 85 percent of the current
    1,465,000 serving in America's military are men. That means that about
    200,000 servicemen will be diagnosed with prostate cancer--without
    additional consideration of service related environmental factors that
    may increase risk of the disease. The DOD refers to itself as America's
    largest company; it must protect its employees from a killer that will
    affect 14 percent of its workforce.
        Whether in battle or peacetime, the lives of men all over this
    country depend on your decisions. You have the unique opportunity to
    provide a brighter future for millions of men and families through
    prostate cancer research. With proper funding we can find a way to end
    the pain and suffering caused by prostate cancer.
        To properly fight the war on prostate cancer for families like
    mine, your committee must appropriate $100 million for the DOD
    Congressionally Directed Medical Research Program's (CDMRP) Prostate
    Cancer Research Program (PCRP). As stated in its fiscal year 1997
    business plan, PCRP needs at least $100 million to conduct human
    clinical trial research. My husband chose to have a radical
    prostatectomy, one of several forms of treatment available for prostate
    cancer. Yet, as with all current primary treatments for the disease,
    there are many side effects. Without $100 million, the program is
    unable to test new treatments and thus get new products to patients
    that may not impair the quality of their lives. Without such
    investment, the pipeline remains closed, meaning that valuable prostate
    cancer research remains stuck in laboratories instead of at work in
    clinics.
        Thanks to your leadership, CDMRP has become the gold standard for
    administering cancer research. Prostate cancer advocates and scientists
    throughout this nation have long applauded the program and its peer and
    consumer driven approach to research. PCRP is a unique program within
    the government's prostate cancer research portfolio because it makes
    use of public/private partnerships, awards competitive grants for new
    ideas, does not duplicate the work of other funders, integrates
    scientists and survivors and uses a unique perspective to solve
    problems. Its mission and its results are clear. Each year, the program
    issues an annual report detailing what it has done with taxpayer
    dollars to fight prostate cancer. PCRP's transparency allows people
    like us and others affected by prostate cancer to clearly see what our
    government is doing to fight the disease.
        The PCRP structure is based on a model developed by the National
    Academy of Sciences' Institute of Medicine. Its mission and its
    philosophy for awarding research grants reflect that of DOD's Defense
    Advanced Research Projects Agency (DARPA). The DARPA model, performance
    through competition and innovation, was praised in President Bush's
    fiscal year 2005 budget. This DARPA-esque approach to cancer research
    allows PCRP to identify novel research with large potential payoffs and
    to focus on innovative methods that do not receive funding elsewhere.
        One of the strongest aspects of the program is PCRP's Integration
    Panel. The panel is composed of those who know prostate cancer research
    and the issues facing it: scientists, researchers, and prostate cancer
    survivors, just like Stephen. This peer and consumer driven model
    allows the program to select grants based on merit and their
    translational benefit while incorporating the views of those who need
    research the most, prostate cancer patients. No other publicly funded
    cancer research entity effectively brings together all those with a
    stake in curing prostate cancer.
        This committee requested last year that DOD, in consultation with
    the Institute of Medicine, evaluate collaborations with the private
    sector (Senate Report 108-87). Both NPCC and I agree. Through public-
    private partnerships, prostate cancer researchers can work collectively
    and strategically to produce new preventives, diagnostics and
    treatments to improve the quality of life for prostate cancer patients
    like Stephen. Prior to your directive, NPCC began discussing methods
    for public-private partnerships when it convened, along with the
    National Cancer Institute and DOD, the Prostate Cancer Research Funders
    Conference in 2000.
        The Prostate Cancer Research Funders Conference brings together
    representatives of all the government agencies that fund prostate
    cancer research along with their counterparts in the private sector.
    Participants include NIH/NCI, DOD, the Veterans Health Administration,
    the Centers for Disease Control and Prevention, the Food and Drug
    Administration, Canadian and British government agencies, private
    foundations/organizations and representatives from industry. Members of
    the Conference have come together to focus on shared objectives and
    address commonly recognized barriers in research.
        As a co-convener of the conference, PCRP plays an important role in
    shaping its priorities. Currently, federal agencies participate
    voluntarily, but they can opt in or out based on the tenure of
    executive leadership. For the conference to be successful, federal
    agencies engaged in prostate cancer research should, in our opinion, be
    required to participate, and we ask for your leadership to make that
    happen. Moreover, Congress must also offer sufficient incentives for
    the private sector to participate. Incentives that do not compromise
    the autonomy or integrity of PCRP's peer review structure. I firmly
    believe that a collaborative, multifaceted approach to prostate cancer
    research can bring about better results in a more timely fashion.
        Mr. Chairman, we have done remarkable work and are making progress.
    Public-private collaboration and new scientific discoveries are moving
    us toward a better understanding of how prostate cancer kills, but, for
    our work to be worthwhile, it must be translated into tangible goals
    and results for patients. The War on Cancer must be funded
    appropriately so researchers can get new drugs to the patients who need
    them. For this to happen PCRP needs $100 million to fund human clinical
    trials research.
        On behalf of my entire family, prostate cancer patients everywhere,
    and NPCC I thank you for your time. Thanks to your leadership, I will
    one day be able to tell my children that a disease their daddy has is
    no longer a killer of men.

        Senator Stevens. Our next witness is Daniel Puzon, Director
    of Legislation, Naval Reserve Association.

    STATEMENT OF CAPTAIN IKE PUZON, UNITED STATES NAVAL
                RESERVE (RET.), DIRECTOR OF LEGISLATION,
                NAVAL RESERVE ASSOCIATION
        Mr. Puzon. Mr. Chairman, Senator Inouye, thank you for this
    opportunity. On behalf of my 22,000 members and 86,000 naval
    reservists, we thank you.
        We are obviously in a climate of increased utilization and
    sacrifice by our Guard and Reserve, as you have heard today. We
    are aware of those sacrifices. Our three main equity issues on
    personnel are, as others have said, selective Reserve
    Montgomery GI bill improvement, TRICARE for our selected
    reservists, and some type of parity or improvements on
    retirement. Our most pressing concern is equipment, end
    strength, and force structure.
        The fact that we have recalled 360,000 Guard and Reserve
    members is a true testament of their surge ability and their
    need in our service and also to their readiness and also to the
    requirement to have a healthy Reserve component in all our
    services. They have proved that they are cost effective and
    they add ``just in time'' might when our Nation calls.
        The performance and efforts of today's military is without
    question. We foresee that the reliance on the Guard and Reserve
    will continue this way for some time in execution of our
    national security strategy and evolving homeland security
    strategy. Reserve components again are providing for our Nation
    and they have proven they are affordable.
        The Guard and Reserve is oftentimes the first bill payer in
    any attempt to balance the budget. The recent use of F-18's and
    HCS-4 helicopters, coastal warfare, and multiple other Guard
    and Reserve units, but most notably in the Navy Reserve units
    have been targeted for decommissioning. Again, we embrace
    change in the Naval Reserve Association but we do not embrace
    the elimination. These people that have served are coming back
    from Operation Iraqi Freedom and finding out their unit is
    going to be decommissioned. We think that is a travesty for our
    Nation and for the naval reservists.
        As you know, the Navy is involved from the top down in
    relooking at what billets are needed and not needed. What is
    not being looked at is how those people that are being
    reassigned will be trained. It is going to be hard to be
    trained if you are in middle America and you need to go to
    Norfolk or San Diego. That has not been addressed and is not
    being addressed and is not being funded.
        When our Nation called on these service members in the
    Naval Reserve, they responded. Now, they are finding out these
    units they used to belong to are on the block to be cut. We
    think this needs to be looked at.
        As you know, reservists and Guardsmen are willing to make
    large sacrifices and sacrifices in employment unexpectedly.
    Reservists have shown this time and time again. They will
    volunteer when asked. They will do anything you ask them to do.
        The way the Reserve is used in successful military
    operations is essential to what America is doing. What we are
    asking is are these initiatives, the road we are going down,
    are they the right ones for our national military strategy and
    our homeland security strategy. Is it the right direction? Is
    it sound defense? We are learning lessons, and we hope that the
    Secretary of Defense and the service departments learn those
    lessons.
        Finally, we would like to urge Congress to continue to
    resource the National Guard and Reserve equipment accounts.
    That is the only way Guard and Reserve will keep maintaining
    front line equipment or any equipment in some cases.
        We also think you should address the idea of maintaining
    the force level for the Naval Reserve because if you do not, it
    will be gone. We are a slippery slope, down to 40,000
    reservists in the Naval Reserve. That is again another
    travesty.
        Finally, we encourage you to consider a commission for the
    Guard and Reserve for the 21st century. There are way too many
    issues out there that address this country that the Guard and
    Reserve can do and will do, and this is the only way to get to
    it is through a congressionally mandated commission.
        Thank you for your time.
        Senator Stevens. Well, thank you very much. You make some
    great points. We have labored long and hard to ensure that the
    total force was there, and it has been there. Guard and Reserve
    is part of the total force. You have a very interesting
    suggestion for a commission for the 21st century.
    Unfortunately, I think that is an Armed Services Committee
    problem, but we will work with them. I think it is a good
    suggestion. Thank you very much.
        Mr. Puzon. Yes, sir.
        Senator Stevens. Senator Inouye.
        Senator Inouye. Thank you.
        Senator Stevens. Thank you very much.
        [The statement follows:]

                     Prepared Statement of Daniel I. Puzon

        Chairman Stevens, Senator Inouye and distinguished members of the
    subcommittee, on behalf of our 22,000 members, and in advocacy for the
    86,000 active Naval Reservists we are grateful for the opportunity to
    submit testimony, and for your efforts in this hearing.
        Today, a climate of continued utilization and sacrifice for our
    Guardsmen and Reservists has encircled our nation. We are all more
    aware of sacrifices of our armed forces in Iraq including our Guardsmen
    and Reservists. Our Guard and Reserve personnel are serving 365 days a
    year and have suffered in these casualties. These are the times that
    bring the issue of parity between the active component personnel and
    reserve component personnel to the forefront and into question.
        The three main equity personnel issues important to the Naval
    Reserve Association members is: (1) Selective Reserve MGIB
    improvements, (2) TRICARE for Selected Reservists, and (3) some type of
    parity on early retirement.
        Our most important issue is end strength and force structure.
        We do not have to remind the Congress why you needed to provide for
    these Guard and Reserve forces, but it is noted that it is a good thing
    you did, or where would we be today--by calling on them to go and serve
    in every major conflict that we have experienced in recent memory. As
    of today--350,000 Guard and Reserve members recalled since September
    11, 2001, is a true testimony of their surge-ability and readiness, and
    of the requirement to have a healthy reserve component in all our
    services. These are the forces that add ``just in time'' combat might
    when our Nation calls. Judged by this metric of combat might, they are
    cost-effective and efficient resources.
        The performance and efforts of today's military is without question
    in the forefront of our national and international news. Without
    question our armed forces is at the height of military prominence and
    involvement in our national security strategy. We foresee that this
    reliance will remain this way, as long as we are in this protracted war
    on terrorism, and executing both the National Security Strategy and
    evolving Homeland Security Strategy. Truly our Reserve Components are
    providing for the defense of our nation and proven that they are
    affordable!
        Yet, while these affordable Guard and Reserve forces are fighting
    the war in Iraq and being used throughout the world in peace keeping
    missions, there are some who believe that they add little value; that
    resources authorized and appropriated by Congress could be used better
    somewhere else. The Guard and Reserve is often time the first payer in
    any attempt to balance the budget. In the Navy, dedicated Naval Reserve
    equipment that has been used in this recent war (F-18's, HH-60's,
    Coastal Warfare small boats) is being eliminated and Reserve units have
    been targeted for decommissioning. VFA-203 is scheduled for
    decommissioning in June 2004, however, their sister squadron (VFA-201)
    recently deployed, fought in OIF, and broke all active component
    wartime records. Because they are the Naval Reserve they are being
    decommissioned. The fact that the equipment and personnel would be
    needed in a larger conflict (Korea, China), or could be utilized in
    Homeland Security is of little matter. Some of this is being mislabel
    as transformational, and some of it is being engineered to occur as an
    outcome under BRAC. For these and other reasons Congress must remain
    engaged in maintaining our Reserve and Guard Components.
        We respectfully call on Congress to review and question current
    Transformation and rebalancing efforts because of the aforementioned
    and the following;
      --Guard and Reserve service members are responding without question,
            or hesitation.
      --Guard and Reserve service members' families are responding without
            question.
      --Guard and Reserve service members' employers are responding without
            question.
      --Guard and Reserve hardware units that you have appropriated have
            responded and are responding without question.
      --Guard and Reserve hardware units have performed at and above
            standards and actually above any active component standard.
      --Naval Reserve members and their families as a whole, view
            transformation and active reserve integration acceptable, but
            understand that this means they will no longer have real units,
            with Required Operating Capabilities, and Programmed Operating
            Capabilities justifications. How Reservists will be trained is
            a detail that hasn't been answered under current plans.
      --Successful transformation of a reserve component is rarely
            completed, solely with DOD or service input. Outside assistance
            is necessary to achieve the right mix and right balance.
      --Current situations and emerging threats, clearly shows that we need
            a healthy Naval Reserve force with equipment and with units.
        Rarely has there been this massive effort of organizational--
    equipment, personnel, cultural, and resource--transformation at the
    same time our country is engaged in a global war on terrorism, homeland
    security defense, and several protracted wars overseas.
        As you know, the Navy is occupied from the top down and ground up
    in transformation of the Navy and Fleet response--developing
    expeditionary forces, redoing training matrices, procuring new
    technologies that will transform Naval war fighting efforts, and now at
    the same time, implementing massive change of including the Naval
    Reserve service, in active training matrices.
        This is all being done, when our nation called upon the service
    members of the Naval Reserve--they responded, and now they are finding
    out their units are going to no longer exist--because we need
    supposedly more efficient, more effective, capabilities based surging
    forces. These Naval Reserve Forces cost 50 percent less than any active
    duty members or unit. They maintain their readiness--directed and
    reported by active components, at an overall higher sustained rate over
    time than their active counterpart. The Naval Reserve force knows it
    must change, and some instances understands better business practices
    much better than any active member. However, they are now--under the
    microscope of change, with more to loose than any active force member.
        Reservists are willing to sacrifice family and employment to serve
    their country, unexpectedly. Reservists 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. Yet, they are being
    used again and again.
        Rather than confront budget appropriators, the Active Components
    have been content to fill their force shortfalls with Reserve manpower,
    and this has been arguably good for the country, according to the
    Department of the Navy.
        If there is a raw nerve among Reservists, it is caused by how
    individuals are being utilized, and how often that individual is being
    called up. Pride and professionalism is a large factor in the profile
    of a Reservist as it is with any individual member of the Armed
    Services. They want to be used how they have been trained, and they
    want to be used and complement the Active Forces. Recall and proper use
    of reservists needs constant monitoring and attention. We agree that
    transformation of legacy personnel manpower program is overdue. But,
    Congressional involvement in force structure transformation is
    mandatory, along with outside independent involvement to ensure our
    country does have this affordable and cost efficient capability.
        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. This has proven its worth over and over,
    and is relevant.
        The question we are asking is: ``Are the DOD legislative
    initiatives, rebalancing efforts of the Department of Navy--taking us
    in the right direction for a sound Military and a strong National
    Defense?'' We hope that DOD is learning lessons from the past to avoid
    repeating old mistakes in the future, and the Naval Reserve Association
    stands ready to assist in turning lessons learned into improved policy.
        Leaving nothing to chance however, we strongly urge Congress to
    legislate:
      --Resources for maintaining a strong Naval Reserve Force through the
            NGREA per the attached priority list for the Naval Reserve
            Force;
      --Appropriations language that maintains end strength and restores
            unit structure for the Naval Reserve at fiscal year 2003-04
            levels; and
      --Establish a Commission on the Transformation of Guard and Reserve
            of the 21st Century. The transformation of our military is
            dynamic and includes the extended utilization of the Guard and
            Reserve Forces. We feel it is time for Congress to take a
            thorough look at these issues with a commission in order to
            address the many problems that we are experiencing with our
            Guard and Reserve Forces. A Congressional commission is
            warranted to review these issues properly.
        Mr. Chairman and distinguished members of the committee, thank you
    for this opportunity. Details of specific issues of concern by our
    Association follow; we hope you can help address them.

                              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 strengthening the Reserve and
    Guard equipment in order to maintain--highly qualified trained Reserve
    and Guard personnel.
        Our suggested priority for fiscal year 2005 NGREA:

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
     Pri              Equipment                Cost       No.                           Remarks
    ----------------------------------------------------------------------------------------------------------------
       1 Littoral Surveillance System           $19          1  Procure additional LSS.
          (LSS)
       2 Naval Coastal Warfare Boats             45         28  Procure 28 boats.
       3 P-3C AIP Kits                           29          2  Achieve commonality.
       4 F/A-18 Mod, ECP 560                     24          8  Upgrade F/A-18A PGM capability.
       5 MH-60S Aircraft                         84          4  Replacement for HH-60H Aircraft.
       6 F-5 Radar Upgrade                        7          6  Upgrade to APG-66 radar.
       7 C-40A Transport Aircraft             1,140          2  Replace aging C-9 with C-40A.
       8 F/A-18 Advanced Targeting FLIR         168         12  FLIR's for all Reserve F/A-18 Aircraft.
       9 P-3C BMUP Kits                         467          4  Achieve commonality.
      10 FLIR kits (AAS-51Q) for SH-60B          56          4  Procure 4 FLIR (AAS-51-Q) for SH-60B
    ----------------------------------------------------------------------------------------------------------------

                                   PERSONNEL

    Selective Reserve MGIB improvements
        Issue: Currently SelRes MGIB benefits are at 19 percent of active
    duty entitlements.
        Position: This shows clearly the priority of SelRes service
    members. This benefit should be higher and closer to the 48 percent
    mandated benefit. We must consider upgrading this benefit for those
    members that are responding to our nations call.
    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 USC 641(1)(D) allowing them to remain on the RASL for
    promotion purposes.

    Healthcare
        Issue: Healthcare readiness is the number one problem in mobilizing
    Reservists. The governments own studies shows that between 20-25
    percent of Guardsmen and Reservists are uninsured.
        Position: 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. Congress took decisive action in establishing
    the temporary Healthcare program for Guard and Reserve Forces during
    the fiscal year 2004 NDAA. NRA would like to see a continued effort at
    implementing the established TRICARE Health plan for uninsured drilling
    Reservists, and establishing this program as a permanent program.

    Early Reserve Retirement
        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. The Defense Department study on this issue was
    non conclusive.
        Position: Over the last two decades and recently more has been
    asked of Guardsmen and Reservists than ever before. The nature of the
    contract has changed; Reserve Component members need 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.
        The Naval Reserve Association suggests a cost neutral 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.
        At a minimum, the committee should consider the various initiatives
    and the cost neutral approach during the debate.

                                FORCE STRUCTURE

    Roles and Missions
        Issue: 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 war fighting.
        Position: Navy has yet to deliver a Vision of use of and equipping
    of the Naval Reserve Force. A Commission on the Transformation of the
    Guard and Reserve for the 21st Century is warranted.
    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.

    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.

    Closure of Naval Reserve Activities
        Issue: Discussion has emerged, 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.
        A. 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.
        B. 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.
        C. 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.
        D. 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.
        E. Such a plan would devastate the Naval Reserves; retention would
    plummet, training and readiness would suffer.

                                    SUMMARY

        NGREA and Commission on Guard and Reserve Forces for the 21st
    Century are the most important issues. Congress must maintain parity
    for equipment, because the active component will not. If our country is
    going to use the Guard and Reserve in the manner we are currently
    doing, Congress must provide the resources, the active component is
    not. Finally, a congressionally mandated Commission to study these
    vital National Security issues is needed to provide guidance to the
    balancing and transformation that is occurring.
        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 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 affordable resource only
    if they are treated right. Navy plans do not provide for these key
    points and do not treat the reservist correctly. 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. Next is Dr. Jerome Odom, Provost of the
    University of South Carolina.

    STATEMENT OF DR. JEROME ODOM, PROVOST, UNIVERSITY OF
                SOUTH CAROLINA ON BEHALF OF THE COALITION
                OF EPSCoR STATES
        Dr. Odom. Thank you, Mr. Chairman, Senator Inouye. I
    appreciate the opportunity to submit the testimony regarding
    the Defense Department's basic scientific research program and
    the Defense Experimental Program to Stimulate Competitive
    Research, which is better known as DEPSCoR.
        I am the Executive Vice President for Academic Affairs and
    Provost at the University of South Carolina, and I want to
    speak today in support of both the Defense Department's science
    and engineering research program and an important component of
    that research, the DEPSCoR program. This statement is submitted
    on behalf of the Coalition of EPSCoR States and the 21 States
    and Puerto Rico that participate in EPSCoR. EPSCoR stands for
    Experimental Program to Stimulate Competitive Research, and Mr.
    Chairman, Alaska is an EPSCoR State, and Senator Inouye, Hawaii
    is an EPSCoR State as well.
        The coalition wishes to be associated with the statement of
    the Coalition for National Security Research in support of
    additional funding for defense research and development. The
    coalition strongly urges the administration and Congress to
    provide a robust and stable fiscal year 2005 investment for
    science and technology programs in the Department of Defense.
    This subcommittee has long demonstrated its strong support for
    the Department's science and technology research which have
    produced the innovations and technological breakthroughs that
    have contributed to ensuring that our fighting men and women
    have the best available systems and weapons to support them in
    executing their national defense missions. The bench science
    that this subcommittee has wisely supported in our Nation's
    universities has produced significant benefits for the people
    in the field and on the front lines.
        The Coalition of EPSCoR States strongly supports the
    Department's budget request for basic research. The DEPSCoR
    program is a small but significant part of this larger program.
    The coalition recommends that Congress appropriate $25 million
    to the Defense Department's budget for the DEPSCoR program.
        EPSCoR itself is a research and development program that
    was initiated by the National Science Foundation and is now
    supported by most Federal agencies that fund research. Through
    a merit review process, EPSCoR is improving our Nation's
    science and technology capability by funding research
    activities of talented researchers at universities and
    nonprofit organizations in States that historically have not
    received significant Federal research and development funding.
    EPSCoR is a catalyst for change and is widely viewed as a model
    Federal-State partnership.
        The DEPSCoR program helps build national infrastructure for
    research and education by funding research activities in
    science and engineering fields important to national defense.
    The DEPSCoR program also contributes to the States' goals of
    developing and enhancing their research capabilities while
    simultaneously supporting the research goals of the Department
    of Defense. Research proposals are only funded if they provide
    the Defense Department with research in areas important to
    national defense. The DEPSCoR States have established an
    impressive record of research that has directly contributed to
    our Nation's security interests.
        I would like very much to be able to give you some
    examples. They are in the written testimony and all of the
    DEPSCoR States have made major contributions to defense
    research.
        The DEPSCoR program improves the abilities of institutions
    of higher education to develop, plan, and execute science and
    engineering research that is competitive under DOD's peer
    review system and provides technological products that serve
    the needs of the Department of Defense. In order to ensure that
    the broadest number of States is providing unique and high-
    value research to the Department, the DEPSCoR States propose to
    augment the current program within the parameters of the
    Department's legislative authority.
        Currently awards are provided to mission-oriented
    individual investigators from universities and other
    institutions of higher education. The program, as it is
    currently implemented, has not taken into account the
    significant benefits that can be derived from individual
    investigators pooling their efforts to provide clusters of
    research that meet the ever-increasing challenges and needs of
    the Department and the services.
        I would just like to say to close we would request $10
    million for the investigator grants and $15 million for these
    clusters for a total of $25 million for DEPSCoR. I sincerely
    thank you for your consideration of that request.
        Senator Stevens. Well, we are very familiar with your
    program and we thank you very much for what you are doing.
        Dr. Odom. Thank you.
        Senator Stevens. Do you have any questions?
        Senator Inouye. No, Mr. Chairman.
        Senator Stevens. We are familiar with it in our own States.
    Thank you very much.
        Dr. Odom. Thank you very much.
        [The statement follows:]

                     Prepared Statement of Dr. Jerome Odom

        Mr. Chairman and members of the Subcommittee, I thank you for the
    opportunity to submit this testimony regarding the Defense Department's
    basic scientific research program and the Defense Experimental Program
    to Stimulate Competitive Research (DEPSCoR).
        My name is Jerome Odom. I am the Provost of the University of South
    Carolina. I am here today to speak in support of both the Defense
    Department's science and engineering research program and an important
    component of that research, the Defense Department's Experimental
    Program to Stimulate Competitive Research (EPSCoR). This statement is
    submitted on behalf the Coalition of EPSCoR States and the twenty-one
    states and Puerto Rico that participate in EPSCoR.\1\
    ---------------------------------------------------------------------------
        \1\ Alabama, Alaska, Arkansas, Delaware, Hawaii, Idaho, Kansas,
    Kentucky, Maine, Montana, Nebraska, Nevada, North Dakota, Oklahoma,
    South Carolina, South Dakota, Vermont, West Virginia, Wyoming, Puerto
    Rico, and Virgin Islands.
    ---------------------------------------------------------------------------
        The Coalition wishes to be associated with the statement of the
    Coalition for National Security Research in support of additional
    funding for Defense research and development. The Coalition strongly
    urges the Administration and Congress to provide a robust and stable
    fiscal year 2005 investment for the Science and Technology programs of
    the Department of Defense (DOD). This Subcommittee has long
    demonstrated its strong support for the Department's science and
    technology research, which have produced the innovations, and
    technological breakthroughs that have contributed to ensuring that our
    fighting men and women have the best available systems and weapons to
    support them in executing their national defense missions. The bench
    science the Subcommittee has wisely supported in our Nation's
    universities and laboratories has produced significant benefits for the
    people in the field and on the front lines. The Coalition of EPSCoR
    States strongly urges you to maintain a stable investment in the
    Department's science and technology (S&T) efforts.
        The Coalition of EPSCoR States strongly supports the Department's
    budget request for basic research. The Defense EPSCoR program is a
    small, but significant, part of this larger program. The Coalition
    recommends that Congress appropriate $25 million to the Defense
    Department's budget for the Defense Experimental Program to Stimulate
    Competitive Research (Program Element PE 61114D).
        EPSCoR is a research and development program that was initiated by
    the National Science Foundation. Through a merit review process, EPSCoR
    is improving our Nation's science and technology capability by funding
    research activities of talented researchers at universities and non-
    profit organizations in states that historically have not received
    significant Federal research and development funding. EPSCoR helps
    researchers, institutions, and states improve the quality of their
    research capabilities in order to compete more effectively for non-
    EPSCoR research funds. EPSCoR is a catalyst for change and is widely
    viewed as a ``model'' federal-state partnership. EPSCoR seeks to
    advance and support the goals of the program through investments in
    four major areas: research infrastructure improvement; research cluster
    development and investigator-initiated research; education, career
    development and workforce training; and outreach and technology
    transfer.
        The Defense Experimental Program to Stimulate Experimental Research
    (DEPSCoR) was initially authorized by Section 257 of the fiscal year
    1995 National Defense Authorization Act (Public Law 103-337). The
    Defense Department's EPSCoR program helps build national infrastructure
    for research and education by funding research activities in science
    and engineering fields important to national defense. DEPSCoR's
    objectives are to:
        Enhance the capabilities of institutions of higher education in
    eligible States to develop, plan, and execute science and engineering
    research that is competitive under the peer-review systems used for
    awarding Federal research assistance; and
        Increase the probability of long-term growth in the competitively
    awarded financial assistance that universities in eligible States
    receive from the Federal Government for science and engineering
    research.
        The Defense EPSCoR program contributes to the states' goals of
    developing and enhancing their research capabilities, while
    simultaneously supporting the research goals of the Department of
    Defense. DEPSCoR grants are based on recommendations from the EPSCoR
    state committees and the Department's own evaluation and ranking.
    Research proposals are only funded if they provide the Defense
    Department with research in areas important to national defense. The
    DEPSCoR states have established an impressive record to research that
    has directly contributed to our Nation's security interests. If you
    will allow me, I would like to highlight some of DEPSCoR's success.
        In my state of South Carolina, researchers from Clemson University
    have produced communications protocols to enhance the effectiveness of
    radio networks on the battlefield. Researchers are focused on the
    development of protocols for mitigating the limitations of radio
    devices of widely disparate capabilities that will be required in
    future tactical communication networks used by the Army. The new
    technique will yield a significant improvement in performance and allow
    for more robust radio system operation for the Army. The University of
    South Carolina has completed a study to help the Navy revolutionize
    data processing methods for battlefield operations through the use of
    sophisticated mathematical techniques. Funded by the Navy, the research
    project, carried out at the internationally recognized Industrial
    Mathematics Institute of the University of South Carolina, develops
    state of the art compression methods that can be used in a variety of
    military scenarios including: automated target recognition, mission
    planning, post battlefield assessment, intelligence and counter
    intelligence.
        University of Alabama researchers have conducted important work to
    reducing gearbox noise in Army helicopters. By reducing the noise
    levels, the crew will be more alert and able to communicate more
    effectively while in such a vehicle, thus improving safe operation of
    the rotorcraft. Additionally, reducing structural vibrations can
    decrease fatigue damage in the rotorcraft.
        Montana State University has received funding from the Air Force to
    conduct research into protecting pilots and sensors from attack from
    laser weaponry. This project is of particular interest for protecting
    pilots using Night Vision Goggles (NVG), for laser range finders and
    target designators.
        University of Nevada at Reno investigators are exploring novel
    military applications for non-lethal weaponry for use by the Air Force.
    This research could be used for ultimately developing ``stunning/
    immobilizing'' weapons that do not rely on chemicals and that do not
    cause human injury. University of Nevada researchers are working on a
    project to mitigate the noise in the drive systems of ships and
    submarines. The mitigation of noise and the accompanying vibration will
    significantly improve stealth performance of naval vessels.
        North Dakota State University obtained funding to develop
    mechanisms that allow the Navy's unmanned airborne vehicles (UAVs) to
    carry out mission tasks with little external supervision and control.
    The development of this technology will lead to individual or teams of
    UAVs efficiently carrying out search, surveillance, reconnaissance, and
    delivery of weapons missions in the presence of enemy threat and
    without risk to the lives of military personnel. University of North
    Dakota researchers received Army funding to develop weather models for
    improving the availability of weather information worldwide.
    Improvements in satellite technology research will lead to a better
    forecasting tool that can be utilized by Army personnel to help
    maximize their advantage in a battlefield or homeland defense
    environment. North Dakota State obtained funding from the Navy to
    conduct a project to lengthen the life of ship structures. This
    research will lead to significant savings in military spending on
    marine fuel, maintenance and replacement of ships.
        University of Vermont researchers conducted a study to decompose
    chemical warfare agents such as mustard gas in a safe and
    environmentally sustainable system. This method is similar to one used
    in industry to remove toxic compounds from the smokestacks of coal-
    burning plants. This process can decompose nearly 100 percent of half
    mustard from a gas sample. The chemical by-products of this process are
    environmentally friendly and non-toxic. Similar technologies can be
    used to decompose sarin, soman, and VX stimulants.
        The Defense Experimental Program to Stimulate Competitive Research
    (DEPSCoR) has been established within DOD to build national
    competitiveness for academic research and education by providing
    funding in science and engineering fields of vital importance to DOD's
    mission. The program improves the abilities of institutions of higher
    education to develop, plan and execute science and engineering research
    that is competitive under DOD's peer-review system and provides
    technological products that serves the needs of the Department of
    Defense and the Uniformed Services. In order to ensure that the
    broadest number of states is providing unique and high value research
    to the Department, the DEPSCoR states propose to augment the current
    program within the parameters of the Department's legislative
    authority.
        Currently, awards are provided to mission-oriented individual
    investigators from universities and other institutions of higher
    education. The individual investigators conduct extremely important
    research that has practical military applications. The program as it is
    currently implemented has not taken into account the significant
    benefits that can be derived from individual investigators pooling
    their efforts to provide ``clusters'' of research that meet the ever
    increasing challenges and needs of the Department and the Services. The
    current program could also benefit from an approach that maximizes the
    number of the 21 DEPSCoR states that receive funding for important
    defense-related projects thus ensuring that these states remain engaged
    in cutting edge research that enhances national defense.
        Working in close consultation with the appropriate officials at the
    Department of Defense, DEPSCoR states propose restructuring the program
    into two components. The first component would retain the current
    program whereby the 21 eligible states (and individual investigators)
    are invited, through their NSF EPSCoR Committee, to compete for
    research awards in areas identified by the Department and the Services.
    The second and new component would award funding to mission-oriented
    ``centers''. These centers of defense excellence would be mission
    oriented interdisciplinary areas to build defense research capacity.
    Under this model, a single university or institution of higher learning
    would be awarded a DEPSCoR grant and would manage the various
    investigators charged with providing interdisciplinary defense
    research. In order to ensure the broadest possible participation of
    DEPSCoR states, only four individual awards and two center awards could
    be active for each state over a three-year period at any one time.
        To achieve important defense research objectives of both components
    of the program, the DEPSCoR states need the program to be funded at $25
    million for fiscal year 2005 with approximately $10 million obligated
    to the individual investigator awards and $15 million for the mission-
    oriented centers initiative. This twin approach to funding important
    research will significantly enhance the Department's ability to tap
    into the best ideas that the DEPSCoR states have to offer in support of
    the Nation's security needs. We are currently in discussions with the
    managers at the Office of Defense Research regarding the proposed
    restructuring of the composition of DEPSCoR.
        The Defense Department's Experimental Program to Stimulate
    Competitive Research is a wise and worthwhile investment of scarce
    public resources. It will continue to contribute significantly to
    efforts to build scientific and engineering research efforts in support
    of national defense needs.
        Finally, the Coalition of EPSCoR States believes a $25 million
    Defense EPSCoR program with the modifications suggested will ensure
    that Federal dollars are being used in a cost-effective way and that
    the EPSCoR states are contributing to the Nation's Defense efforts.
    Thank you for your consideration of this request.

        Senator Stevens. Our last witness is Ms. Fran Visco,
    President of the National Breast Cancer Coalition. Good
    morning.

    STATEMENT OF FRAN VISCO, J.D., PRESIDENT, NATIONAL
                BREAST CANCER COALITION
        Ms. Visco. Good morning, Mr. Chairman. Good morning,
    Senator Inouye. I am a 17-year breast cancer survivor and I am
    privileged to lead the National Breast Cancer Coalition, a
    coalition of more than 600 member organizations from across the
    country and 70,000 individuals.
        We have submitted written testimony that gives you some of
    the successes of the Department of Defense breast cancer
    research program, so I am not going to go into that detail. I
    am here to thank you for your ongoing support of this program
    and to once again assure you that these dollars are being
    incredibly well spent. We are here to ask for level funding to
    continue the program.
        As you know, the overhead for this program is exceedingly
    low. It is incredibly flexible and able to respond to changes
    in science on an annual basis. It is a program that is
    transparent and accountable to the public. The information of
    what this program funds and how it works is freely available.
    The website for the program lists everything that the program
    has funded. Every other year, there is a meeting called the Era
    of Hope, which is one of the few times where the Government
    actually reports to the taxpayer exactly where every dollar
    goes.
        The collaboration among the scientific community, the
    consumer community, and the United States Army has set a model
    for further collaborations. General Martinez Lopez has told us
    that so much of what we come up with in the DOD breast cancer
    research program and the collaborations he has used as a model
    for other biomedical research programs and other programs at
    Fort Detrick. The collaborations that have sprung up between
    world renowned scientists and the United States Army are
    unprecedented as a result of this program.
        Most importantly, it truly has the trust and the faith and
    the support of the American public. This program is a model, a
    model that has been copied by other countries, by other
    biomedical research funding programs, by foundations, by so
    many others to support innovative breast cancer and other
    research.
        This program complements the existing traditional funding
    streams. This program rewards innovation. It looks at new ideas
    and concepts that ultimately become traditional research
    proposals that are funded by the National Cancer Institute and
    the National Institutes of Health. It identifies individuals
    with great vision and promise early in their career and gives
    them the funding to allow them to create new technologies and
    new approaches to eradicating breast cancer. There is no other
    program like the DOD breast cancer program.
        Again, we are so grateful for your continued support. Thank
    you very much.
        Senator Stevens. Thank you very much. We appreciate your
    coming to see us and for your visit to our offices.
        Senator Inouye.
        Senator Inouye. I would like to note, Mr. Chairman, that
    this is another congressional initiative program that you
    began.
        Ms. Visco. Yes.
        Senator Inouye. Thank you very much, sir.
        Ms. Visco. And we are very grateful to him for that. Thank
    you.
        [The statement follows:]

                     Prepared Statement of Fran Visco, J.D.

        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 (NBCC).
    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 12 years 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 $150 million appropriation for fiscal year 2005. The
    program was reduced from $175 million to $150 million three 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
    level funding of $150 million for fiscal year 2005.
        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 breast cancer 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 past 12 years, the DOD Peer-Reviewed Breast Cancer Research
    Program has established itself as model medical research program,
    respected throughout the cancer and broader medical 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 respond quickly to what
    is currently happening in the scientific community. It is able to fill
    gaps with little red tape. 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
    effectiveness.
        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 has 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.
    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 or 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 invest in world
    renowned, outstanding individuals, rather than projects, from any field
    of study by providing funding and freedom to pursue highly creative,
    potentially breakthrough research that could ultimately accelerate the
    eradication of breast cancer. The Era of Hope Scholar is intended to
    support the formation of the next generation of leaders in breast
    cancer research, by identifying the best and brightest independent
    scientists early in their careers and give them the necessary resources
    to pursue a highly innovative vision towards ending breast cancer.
        Also, Historically Black Colleges and Minority Universities/
    Minority Institutions Partnership 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 an
    established program 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--$150 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
    have been awarded for investigator-initiated projects that involve a
    clinical trial within the lifetime of the award. The BCRP expanded its
    emphasis on translational research by offering five different types of
    awards that support work at the critical juncture between laboratory
    research and bedside applications.
        The Centers of Excellence mechanism bring together consortia of the
    world's most highly qualified individuals and institutions to address a
    major overarching question in breast cancer research that could make a
    major contribution towards the eradication of breast cancer. These
    Centers put to work the expertise of basic, epidemiology and clinical
    researchers; as well as consumer advocates to focus on a major question
    in breast cancer research. Many of these centers are working on
    questions that will translate into direct clinical 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 HER-2/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 HER-2/neu could slow the
    growth of the cancer cells that over-expressed the gene. This research,
    which led to the development of the drug Herceptin, 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 higher risk of developing 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.
        Investigators funded by the DOD have developed a novel imaging
    technique that combines two-dimensional and 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 underfunded. It is responsive to the
    scientific community and 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 nearly $1.68
    billion in appropriations, from which 3,671 awards for fiscal year
    1992-2002 were distributed. Approximately 400 awards will be granted
    for fiscal year 2003. The areas of focus of the DOD BCRP span a broad
    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.
        From the program's inception through fiscal year 2002, the BCRP has
    funded research at 3,459 institutions in all 50 states and the District
    of Columbia. I would like to submit a chart for the record that
    demonstrates how the funding has been distributed through fiscal year
    2002.
        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 more than
    6,200 publications in scientific journals, more than 4,200 abstracts
    and 140 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 IOM, which originally
    recommended the structure for the program, independently re-examined
    the program in a report published in 1997. Their findings
    overwhelmingly encouraged the continuation of the program and offered
    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 recommended
    continuing the program and established 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 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 next meeting will be held in June 2005.
        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 at http://cdmrp.army.mil/
    bcrp/.

               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 for 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 1997, our members presented a petition with more than 2.6
    million signatures to 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 for.
        Once again, NBCC is bringing its message to Congress. Just last
    week, many of the women and family members who supported the campaign
    to gather the 2.6 million signatures came to NBCCF'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 our efforts to end breast cancer. The overwhelming interest
    in, and dedication to eradicate this disease continues to be evident as
    people not only are signing petitions, but are willing to come to
    Washington, D.C. from across the country to deliver their message about
    their commitment.
        Since the very beginning of this program in 1992, Congress has
    stood in support of this important investment in the fight against
    breast cancer. In the years since, 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. You have set in
    motion an innovative and highly efficient approach to fighting the
    breast cancer epidemic. What you must do now is support this effort by
    continuing to fund 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 3 million women in the United States living with
    breast cancer.

                        ADDITIONAL SUBMITTED STATEMENTS

        [Clerk's Note.--Subsequent to the hearing, the subcommittee
    has received statements from Dennis Duggan of The American
    Legion, MSGT (Ret.) Morgan D. Brown, Manager, Legislative
    Affairs, Air Force Sergeants Association, and the American
    Museum of Natural History which will be inserted in the record
    at this point.]

                   Prepared Statement of The American Legion

        Chairman Stevens and distinguished Members of the Subcommittee: The
    American Legion is grateful for the opportunity to present its views
    regarding defense appropriations for fiscal year 2005. 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 to include the active, Reserve and National Guard
    forces and their families, as well as quality of life for military
    retirees and their dependents. We realize that many of the personnel
    decisions come from your colleagues on the Armed Service Committee;
    however, your Subcommittee continues to play a significant role in the
    Nation's defense.
        Since September 2001, the United States has been involved in two
    wars--the war against terrorism in Operations Iraqi Freedom and
    Enduring Freedom. American fighting men and women are proving that they
    are the 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 continues to adhere to the principle that this
    Nation's armed forces must be well-manned and equipped, not just 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 warships, and Air
    Force fighter wings are eliminated or retired from the force structure,
    they cannot be rapidly reconstituted regardless of the threat or
    emergency circumstances. Although active duty recruiting has achieved
    its goals, the Army's stop-loss policies have obscured retention of the
    active and reserve components. Military morale undoubtedly has also
    been adversely affected by the extension of tours in Iraq.
        The Administration's budget request for fiscal year 2005 totals
    $2.4 trillion and authorizes $402 billion for defense or about 19
    percent of the budget. The fiscal year 2005 defense budget represents a
    seven percent increase in defense spending over the current funding
    level. It also represents 3.6 percent of the Gross Domestic Product,
    more than the 3.5 percent in the fiscal year 2004 budget. Active duty
    military manpower end strength is 1.388 million, only slightly changed
    from fiscal year 2003. Selected Reserve strength is 863,300 or reduced
    by about 25 percent from its strength levels during the Gulf War of 13
    years ago.
        Mr. Chairman, this budget must advance ongoing efforts to fight the
    global war on terrorism, sustain and improve military quality-of-life
    and continue to transform the military. A decade of overuse of the
    military and its under-funding will necessitate sustained investments.
    The American Legion believes that this budget must also address:
    increases in the military end strengths of the Services; accelerate
    ship production; provide increased funding for the concurrent receipt
    of military retirement pay and VA disability compensation for disabled
    military retirees; and improve survivors benefit plan (SBP) for the
    retired military survivors.
        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 active duty force, Reserves and National Guard will continue
    to look for talent in an open market place and to compete with the
    private sector for the best young people this 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 allowances and subject their families to repeated unaccompanied
    deployments and sub-standard housing as well.
        With the eventual lifting of the stop-loss policy, there may be a
    personnel exodus of active duty and reserve components from the Army.
    Retention and recruiting budgets may need to be substantially increased
    if we are to keep, and recruit, quality service members.
        The President's 2005 defense budget requests $104.8 billion for
    military pay and allowances, including a 3.5 percent across-the-board
    pay raise. 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. The fiscal year
    2004 budget lowered out-of-pocket housing costs 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. The American Legion encourages the Subcommittee to continue the
    policy of no out-of-pocket housing costs in future years.
        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 Coast Guard
    personnel.
        American Legion National Commanders have visited American troops in
    Europe, the Balkans and South Korea, as well as a number of
    installations throughout the United States, including Walter Reed Army
    Medical Center and Bethesda National Navy Center. During these visits,
    they were able to see first hand the urgent, immediate need to address
    real quality-of-life challenges faced by service members and their
    families. Commanders' have spoken with families on Womens' and Infants'
    Compensation (WIC), where quality-of-life issues for service members,
    coupled with combat tours and other heightened operational tempos, play
    a key role in recurring recruitment and retention efforts and should
    come as no surprise. The operational tempo and lengthy deployments,
    other than combat tours, must be reduced or curtailed. 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 end
    strengths for the services. Military pay must be on par with the
    competitive civilian sector. Activated Reservists must receive the same
    equipment, the same pay and timely health care as active duty
    personnel. If other benefits, like health care improvements,
    commissaries, adequate quarters, quality childcare, and Impact Aid for
    education or DOD education are reduced, they will only serve to further
    undermine efforts to recruit and retain the brightest and best this
    Nation has to offer.
        The budget deficit is about $374 billion, the largest in U.S.
    history, and it is heading higher perhaps to $500 billion. National
    defense spending must not be a casualty of deficit reductions.

        INCREASING END STRENGTHS AND BALANCING THE ACTIVE/RESERVE FORCE
                                   STRUCTURE

        The personnel system and force structure currently in use by the
    United States Armed Forces was created 30 years ago, in the aftermath
    of the Vietnam War. By the mid-1980's, the All Volunteer Force (AVF)
    became the most professional, highly qualified military the United
    States had ever fielded. With 18 Army divisions and 2.1 million on
    active duty, we were geared for the Cold War and that preparedness
    carried over into the Persian Gulf War. Whenever Reservists were
    called-up for the Persian Gulf War or peacekeeping, in the Balkans or
    Sinai, they were never kept on duty for more than six months. In fact,
    many Reservists volunteered to go. This system began to breakdown after
    September 11, 2001 with an overstretched Army which only had ten
    divisions which included a mix of infantry, armor, cavalry, air
    assault, airborne, mechanized and composite capabilities. The
    Quadrennial Defense Review, released one month after the September 11
    attacks, did not alter the mix of active duty and Reserve units. Nor
    did the plans for the invasion of Iraq. The Defense Department admitted
    that rebalancing the way Reserve forces were used was to be a top
    priority. DOD also said that it had seen no evidence to support calls
    to increase the size of the active Army from its current level of
    480,000. The Reserves still account for 97 percent of the military's
    civil affairs units, 70 percent of its engineering units, 66 percent of
    its military police and 50 percent of its combat forces. Moreover, the
    size of the active duty Army has shrunk to 34 percent of the total U.S.
    military and is currently proportionally smaller than at any time in
    its history. This split in the active and Reserve forces have led to
    four major problems, which has been exacerbated by the inability of the
    United States to get troop contributions from other nations.
        First, the Army is severely overstretched and is actively engaged
    with hostile forces in two countries. It has nearly 370,000 soldiers
    deployed in 120 countries around the globe. Of its 33 combat brigades,
    24 (or 73 percent) are engaged overseas. This leaves the United States
    potentially vulnerable in places like the Korean Peninsula, and it
    means that many combat units are sent on back-to-back deployments or
    have had their overseas tours extended unexpectedly.
        Secondly, the failure to increase active forces and reorganize the
    military's personnel and force structures resulted in National Guard
    and Reserve units being mobilized without reasonable notice nor
    equipping. A Maryland National Guard MP battalion, for example, has
    been mobilized three times in the last two years.
        The third problem created by these mobilizations is that many of
    the Reservists have been called up without proper notice and kept on
    duty too long and happen to be police officers, firefighters and
    paramedics in their civilian lives. When these personnel are called for
    military service and kept active for long periods, besides jeopardizing
    their employment, it can reduce the ability of their communities to
    deal with terrorism.
        The fourth problem with the current system is that it has led to a
    decline in the overall readiness of the Army. In fiscal year 2003, the
    Army had to cancel 49 of its scheduled 182 training exercises. The
    first four divisions returning from Iraq in the first five months of
    this year will not be combat-ready again for at least six months since
    their equipment has worn down, troops have worn down and war-fighting
    skills have atrophied while they were doing police work. Through its
    stop-loss measures, the Army has prevented 24,000 active duty troops
    and some 16,000 reservists from leaving its ranks. The Army Reserve
    missed its reenlistment goals for fiscal year 2003.
        Former Assistant Secretary of Defense Lawrence Korb recommends
    three major steps to correct these imbalances: First, the balance of
    active and Reserves must take place even during a war. Forces needed
    for occupation duty, such as military police, civil affairs and
    engineers should be permanently transferred to active duty. Secondly,
    the size of the Army should be quickly increased by at least two more
    divisions or 40,000 spaces. Third, given the threat to the American
    homeland, DOD cannot allow homeland security personnel to join the
    National Guard and Reserves.
        The American Legion supports these recommendations, in particular,
    by permanently increasing the end strengths of the United States Army
    by two additional divisions or by at least 40,000 personnel. The Army
    simply does not have enough division-size units to adequately
    accommodate rotation of units in Iraq in a timely manner and without
    units becoming non-combat ready when they return home.
        Apparently, DOD has resisted making these changes because of the
    expenses they would incur. But given the size of the overall defense
    budget--$420 billion--the money could be found if Congress and DOD
    reordered its priorities.
        By 2007, the Army expects to have created a modern Army by moving
    to brigade-based organizations, rather than division-based. The Army's
    current 33 brigades will expand to as many as 48 brigade units of
    action, which will include five Stryker brigades. The National Guard
    would have the same common design as the Army. To accomplish these
    planned changes, the Army will temporarily add 30,000 spaces to help
    form the new organizations. However, The American Legion understands
    that about 7,000 service members of the 30,000 would be holdovers from
    the stop-loss policy. DOD also anticipates continuing to call Guardsmen
    and Reservists to active duty, which indicates a continuing unit and
    manpower shortage.

                                QUALITY-OF-LIFE

        The major national security concern continues to be the enhancement
    of the quality-of-life issues for active duty service members,
    Reservists, National Guardsmen, military retirees, and their families.
    During the last congressional session, President Bush and Congress made
    marked improvements in an array of quality-of-life issues for military
    personnel and their military families. These efforts are visual
    enhancements that must be sustained for active duty personnel,
    Guardsmen and Reservists.
        In previous defense budgets, 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 elimination of the disabled veterans' tax for severely
    disabled military retirees. 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 for all disabled retirees needs to
    be resolved, as well as the need to improve survivors' benefits by
    eliminating the 20 percent offset at age 62.
        The American Legion will continue to convey that simple, equitable
    justice is one reason to authorize and fund concurrent receipt.
    Military retirees are the only Federal employees who continue to have
    their retired pay offset 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. The American Legion feels it is time that
    retirees receive compensation for these fiscal sacrifices. Likewise,
    military survivors have their survivors' benefits reduced from 55
    percent to 35 percent when they become social security eligible.
        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 force has
    operated under a higher operational tempo with longer work hours,
    greater dangers, and increased family separations. The very fact that
    over 300,000 Guardsmen and Reservists have been mobilized since
    September 11, 2001 is first-hand evidence that the United States Army
    has needed at least two more active divisions for nearly a decade.
        Throughout the draw down 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 contained in past National Defense Authorization Acts. 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 years of pay caps in previous years took its toll and
            military pay continues to lag behind the private sector at
            about 5.4 percent. With U.S. troops battling terrorism in Iraq
            and Afghanistan, The American Legion supports at least a 3.5
            percent military pay raise. The American Legion believes the
            gap should be erased within three years or less.
      --Basic Allowance for Housing (BAH).--For those who must live off
            base, the payment of 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 by
            2005. Please continue to work to keep the gap closed between
            BAH and the members' average housing costs during future years.
      --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. The American
            Legion recommends the system not be privatized or consolidated;
            and that DECA manpower levels not be further reduced. The
            American Legion would oppose any attempts by DOD to impose
            ``variable pricing'' in commissaries.
      --DOD Domestic Dependents Elementary and Secondary Schools (DDESS).--
            The American Legion is concerned about the possible transfer of
            DDESS, which is the target of an ongoing study in DOD. The
            American Legion urges the retention and full funding of the
            DDESS as they have provided a source of high quality education
            for children attending schools on military installations.

                               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 have a 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. In addition, since
    the terrorist attacks on the American homeland on September 11, 2001,
    more than 300,000 Guard and Reserve troops have been activated to
    support homeland defense and overseas operations in the war on terror.
    Soon, 40 percent of the forces in Iraq will consist of activated
    reservists.
        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. Much was accomplished last year
    for the Guard and Reserves. Benefit issues of particular concern in
    this area include:
      --Review and upgrade the Reserve compensation and retirement system
            without creating disproportional incentives that could
            undermine active force retention; change the retirement age
            from 60 to 55 for Guardsmen and Reservists;
      --Continue to restore the tax deductibility of non-reimbursable
            expenses directly related to Guard and Reserve training;
      --Reduce the operations tempo; increase Army force levels; allocate
            adequate recruiting and retention resources;
      --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 the Guard and Reserve to accrue for retirement purposes all
            points earned annually;
      --Make TRICARE permanently available to all drilling Guardsmen and
            Reservists and their families;
      --Give tax credits for employers who choose to make up the difference
            between military pay and Reservists salary when they are
            activated;
      --Growing concerns are that the Reserve Components, especially the
            National Guard, are being overused in contingency and
            peacekeeping operations, as these service members 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 has 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.

                         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 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 service members 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. The American
            Legion supports restoration of retired pay (concurrent receipt)
            for all disabled military retirees. We would like to thank the
            Subcommittee for authorizing concurrent receipt for disabled
            retirees rated 50 percent and higher and for including
            Temporary Early Retirement Authority (TERA) retirees as well as
            disabled retired Reservists who are receiving retired pay for
            longevity. The American Legion is also grateful for the
            Enhanced Combat-Related Special Compensation (CRSC), which was
            enacted in the fiscal year 2003 National Defense Authorization
            Act. Mr. Chairman, we have a long way to go in extending
            concurrent receipt to those disabled retirees for longevity
            rated 50 percent and less; and including TERA retirees in CRSC
            eligibility; and by extending concurrent receipt to those
            disabled retirees who were medically retired before reaching 20
            years of service. The American Legion has visited Walter Reed
            Army Medical Center on numerous occasions to talk with wounded
            and injured young soldiers, many with amputated limbs suffered
            as a result of combat action in Iraq and Afghanistan. They too
            are prohibited from receiving both military retirement pay for
            their physical disability and VA disability compensation. This
            puts an additional financial strain on these severely disabled
            soldiers and their families. The American Legion is extending
            its Family Support Network to these soldiers and their families
            when they are medically retired from the service. The purposes
            of these two compensation elements are fundamentally different.
            A veteran's disability compensation is paid to a veteran who is
            disabled by injury or disease incurred or aggravated during
            active duty 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. Action should be taken this
            year to provide full compensation for those military retirees
            who served both more than and fewer than 20 years in uniform
            and incurred service-connected disabilities. Disabled military
            retirees are the only retirees who pay for their own disability
            compensation from their retirement pay; and they cannot receive
            both military disability retirement pay and VA disability
            compensation. It is time to completely cease this inequitable
            practice. What better time to authorize and fund concurrent
            receipt for all disabled retirees than during this period of
            War.
      --Social Security Offset 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 of, 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 an improvement
            of survivor benefits from 35 percent to 55 percent over a ten-
            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
            members of the Guard and Reserve are now being used to replace
            active duty forces in Afghanistan and Iraq and are projected to
            become 40 percent of total forces in those theaters. 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.--Service members, 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
            condition and the retiree 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 27,000 military widows/widowers affected by
            the offset under current law. Congress should repeal this
            unfair law that penalizes these military survivors.

                                  CONCLUSIONS

        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
    2005 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 for all
            disabled retirees 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 least 3.5 percent annually which this
            budget does achieve.
      --The end strengths of the active armed forces need to be increased
            to at least 1.6 million for the Services and the Army needs to
            be increased by two more divisions.
      --The Quadrennial Defense Review strategy needs to call for enhanced
            military capabilities to include force structures, increased
            end strengths 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,
            health care, benefits and employment rights need to be
            continually improved.
      --Although the fiscal year 2004 Supplemental Appropriations increased
            funding to purchase body armor and armored HMMVV's, we are very
            disappointed by numerous news accounts of individuals buying
            their own body armor and recommend increased funding.
        Mr. Chairman, this concludes The American Legion statement.
                                     ______

           Prepared Statement of the Air Force Sergeants Association

        Mr. Chairman and distinguished committee members, on behalf of the
    135,000 members of the Air Force Sergeants Association, thank you for
    this opportunity to offer the views of our members on the military
    quality-of-life programs that affect those serving (and who have
    served) 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, and our members are grateful. Listed below are
    several specific goals for which we hope this committee will
    appropriate funds for fiscal year 2005 on behalf of current and past
    enlisted members and their families. As always, we are prepared to
    present more details and to discuss these issues with your staffs. This
    presentation includes many items reflecting the communication we
    receive from our members, and it offers an insight into perceived
    inequities within the military compensation program.

                         MILITARY PAY AND COMPENSATION

        Enlisted military members receive lower pay and lower allowances
    for food and housing. To put it simply, enlisted members are paid the
    least in basic pay, and are expected to spend less for their food and
    to house their families. Of course, this simply means they will have to
    spend more ``out of pocket'' to protect their families. Obviously,
    enlisted members want no less than commissioned officers for their
    families to live in good neighborhoods and to attend good schools. So,
    enlisted members are forced to make this happen by spending more of
    their basic pay--because their allowances are inadequate. We urge this
    committee to support more equitable compensation/allowance levels for
    enlisted members, with emphasis on targeted increases for senior NCOs
    to more fairly compensate them for their responsibilities and the
    military jobs they do for their nation. Some specific areas that we
    hope the committee will examine:
      --Provide Hazardous Duty Incentive Pay (HDIP) for military
            firefighters. DOD and all services have reached agreement on
            this and are ready to support and fund it. The committee can
            easily verify this through military legislative liaison
            contacts and through service leadership. AFSA believes this pay
            is long overdue for these military servicemembers who serve
            under incredible risk--even during peacetime. If any military
            occupational specialty should receive HDIP, military
            firefighters should receive it. It would cost $9.4 million per
            year to provide this funding for all services. It is strongly
            endorsed by this association and by the associations in the
            Military Coalition. We urge the committee to make this happen--
            this year.
      --Reform military pay to more equitably reflect enlisted
            responsibilities in relation to the overall Air Force mission.
            Further targeting is warranted.
      --Make the recent increases in Family Separation Allowance ($250),
            and Imminent Danger Pay ($225) permanent. These levels are
            reasonable and more reflective of the financial burdens of
            those serving and those left at home.
      --Provide Assignment Incentive Pay to those stationed in Korea.
            Military and government leaders often speak of the imminent
            danger posed by the North Koreans and how the troops stationed
            there are at the ``tip of the spear,'' forming the front lines
            of our defenses. These brave men and women should receive some
            type of special pay or tax advantage. Perhaps the answer is to
            mandate an amount of the Assignment Incentive Pay signed into
            law during the 107th Congress.
      --Establish a standard, minimum reenlistment bonus at the time of
            reenlistment for all enlisted members regardless of component,
            time-in-service, or AFSC. We often hear from our members that
            it is demotivating that subordinates often receive bonuses,
            while those who lead them do not. In fact, such bonuses are
            generally not offered after the 15th year of service. While we
            realize that such bonuses are nothing more than force
            manipulation tools, it would be proper to provide some level of
            bonus each time a military member commits to put his/her life
            on the line for an additional extended period of military
            service.

                              EDUCATIONAL BENEFITS

        While a number of issues must be addressed in relation to the
    Montgomery G.I. Bill, we realize they do not specifically fall under
    the jurisdiction of this committee. However, it is imperative that
    those (from that era) who did not enroll in the old Veterans
    Educational Assistance Plan get an opportunity to enroll in the
    Montgomery G.I. Bill. Many are now retiring after devoting a career of
    military service, yet they have no transitional education benefit.
    Additionally, military members give more than enough to this nation
    that they should not have to pay $1,200 into the Montgomery G.I. Bill
    in order to use it. Members ought to be able to transfer their G.I.
    Bill benefits to their family members--perhaps as a career incentive
    (e.g., after serving 12 or 14 years). The 10-year benefit limitation
    after separation needs to be repealed; it is unfair to enlisted members
    and serves no purpose other than to discourage use of this important
    benefit. We ask that you provide the funding necessary to enact these
    changes to the MGIB. In addition, we ask this committee to:
      --Eliminate any service Tuition Assistance caps. As military members
            increase their education levels, they are able to progressively
            increase their contribution to the mission. As has often been
            said, every dollar this nation spends on education returns many
            fold in the contribution the more-educated citizen (military
            member) makes to society and the U.S. economy.
      --Ensure full funding of the Impact Aid Program. This committee is
            forced to address the Impact Aid issue each year. It has had to
            do so regardless of the Administration in power. In order to
            protect the families (especially the children) of military
            members, we ask you to continue your great work in providing
            Impact Aid funding.
      --Enhance the Selected Reserve Montgomery G.I. Bill (SR-MGIB)
            benefit. AFSA asks this committee to provide the funding
            necessary to increase the value of the SR-MGIB to ensure it
            measures up to 47 percent of the value of the active duty MGIB.
            This was the congressional intent when the SR-MGIB began. At
            the present time, the SR-MGIB is only worth 29 percent of the
            MGIB. We ask you to support increasing the value of the SR-MGIB
            and establishing an automatic indexing with the active duty
            program. Additionally, we ask you to provide the necessary
            funding which would allow Guardsmen and Reservists to use the
            SR-MGIB beyond the current 14-year duration of the program.
            They should be able to use the program during their time of
            service and for a reasonable period after they have completed
            their military obligation.
      --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 institutions to consider military members
            assigned in their state as ``residents,'' for the purposes of
            tuition levels.

                    AIR NATIONAL GUARD AND AIR FORCE RESERVE

        The role of the Guard and Reserve (G&R) has increased dramatically.
    Our military establishment simply could not execute the War on
    Terrorism nor this nation's worldwide military operations without the
    direct participation of G&R members. We learned much after 9/11 as
    mobilization took place and as G&R members were increasingly deployed.
    The following initiatives have been called for by AFSA members. Many of
    these are equity issues. AFSA believes that each of the items is the
    right thing to do.
      --Reduce the earliest G&R retirement age from 60 to 55. It is simply
            wrong that these patriots are the only federal retirees that
            have to wait until age 60 to fully enjoy retirement benefits.
            While we realize that DOD considers this a budgetary burden, it
            is the right thing to do. Additionally, it would allow for
            greater movement from rank-to-rank since most G&R promotions
            are by vacancy. While there are many bills on the table (many
            inspired by budgetary considerations rather than doing the
            right thing), we urge this committee to fully support S. 1035,
            sponsored by Senator Jon Corzine. That bill would provide full
            retirement benefits as early as age 55.
      --Provide full (not fractioned) payment of flying, hazardous duty,
            and other special pays; i.e., eliminate ``1/30'' rules. These
            ``fractioned'' allowances are wrong. They denigrate the service
            and the risk faced by members of the Guard and Reserve. We ask
            the committee to fund these important ``risk-based'' allowances
            on the same basis for G&R members as they are paid for active
            duty members.
      --Provide BAH ``Type 1'' to all G&R members TDY or activate,
            including those activated or TDY for less than 139 days. Unlike
            an active duty member, G&R members typically have civilian
            employment and always return to their residence upon completion
            of military duty. Their house payment does not go away.
            Providing full BAH to deployed G&R members would allow them to
            adequately protect their investment in their homes and the
            financial wellbeing of their families, if applicable.
      --Provide G&R First Sergeants and Command Chief Master Sergeants with
            full, special duty assignment pay on the same basis it is paid
            to active duty members. Like active duty members, the
            extraordinary duties and expenses of these two groups of
            leaders does not take place only during duty hours. G&R First
            Sergeants and Command Chiefs have duties throughout the month
            (whether they are ``officially'' on duty or not). For that
            reason, equity would call for this special pay to be paid on
            the same basis as it is for active duty enlisted leaders.

                              RETIREMENT BENEFITS

        AFSA applauds this committee for its support of the partial
    resolution to the Concurrent Receipt issue included in Section 641 of
    the fiscal year 2004 NDAA and the expansion of Combat-Related Special
    Compensation under Section 642. Despite the specter of a veto threat
    throughout the year and intense political wrangling, in the end the
    right thing was done. The principle has now been established in law.
    Congress has recognized that retirees who are disabled by their
    military service should be allowed to collect the full retirement pay
    they earned through long-term honorable service to the nation. They
    also ought to receive just compensation for maladies caused by military
    service--injuries that will have an impact on their employability and
    their quality of life during their remaining days on Earth. Now, AFSA
    urges that the effort shift toward restoring military retired pay for
    those with disabilities of 40 percent and lower. We ask the committee
    to help establish a timetable to address this important issue for those
    with VA disability ratings of 40 percent and lower.

                    MORALE, WELFARE AND RECREATION PROGRAMS

        These programs form an essential part of military life. They build
    a sense of community, enhance morale, promote fitness, provide support
    to family members left behind when the military member is deployed, and
    financially support military families. It is extremely important that
    this committee support full funding of Child Development Centers. These
    facilities are not a luxury, they are absolutely necessary for the
    completion of this nation's military mission.

                         HOUSING AND SHIPMENT PROGRAMS

        The process of shipping military personal property has historically
    been a nightmare for military service members. They have had to accept
    that their personal goods will be lost, stolen, or damaged. In fact,
    that is a normal part of nearly every military move. One reason that
    military household goods have been treated so shoddily is that carriers
    are selected based on ``low bid''--not high quality and/or customer
    satisfaction. Also, the claims process to recover the financial loss
    caused by loss or damage is so cumbersome that many people don't bother
    to file a claim. Those who do file a claim soon learn that they will be
    reimbursed only a fraction of the cost of the actual loss or damage. We
    recommend this committee appropriate funds to specifically address the
    following housing and shipment-related issues.
      --Provide a household goods weight allowance for military spouses to
            accommodate professional books, papers, and/or equipment needed
            to support employment of military spouses. Because the majority
            of military spouses now work (especially in enlisted families),
            it is appropriate that they be afforded a weight allowance to
            accommodate their professional documents, books, and supplies.
            This would be in keeping with DOD's recent focus on ``family
            readiness.'' This allowance would also support such things as
            supplies for family in-home day care, etc.
      --Authorize reimbursement for alternate POV storage. If advantageous
            to the government, reimburse transportation expenses for
            members to take their POVs to a location other than a
            commercial storage facility when PCSing (e.g., to leave the
            vehicle with a relative). Currently, when a member is sent
            overseas to a location where the government will not ship a
            POV, the government must pay to store the vehicle and reimburse
            the member for mileage accumulated while taking the POV to a
            commercial storage facility. Sometimes it would cost the
            government less to reimburse a member for driving his/her
            vehicle to store it at no cost at a relative's or friend's
            home. On top of that, the government would not have to pay the
            storage fees! Of course, those who got reimbursed for taking
            their vehicle to other than a commercial storage facility would
            waive the government storage benefit. In many cases this
            approach would save the government money, as well as passing
            the common sense test.
      --Provide all military members being reassigned to CONUS or OCONUS
            locations the option of government-funded shipment or storage
            of a second privately owned vehicle. Current demographics,
            family employment realities, and average number of family
            vehicles justify making this change. This would be seen as a
            positive step forward, particularly for enlisted military
            members. For them, a privately owned vehicle is a major
            investment in their overall financial well-being. Leaving a
            vehicle behind is usually not an option since few enlisted
            members can afford to store one. As such, a PCS move can have a
            significantly onerous financial impact on an enlisted family.
            Especially if they are forced to sell their vehicle.
            Additionally, because both spouses have to work to support the
            family, we are forcing the family to purchase a second vehicle
            at the PCS location--often at overseas locations where the
            vehicles are significantly overpriced.

                               SURVIVOR BENEFITS

        AFSA appreciates this committee's attention to the needs of those
    left behind when a current or past military member passes away. The
    spouses of military members also serve their nation, facing the rigors
    of that lifestyle, and always being aware that their military spouse
    has agreed to the ultimate sacrifice. It is important that we correct
    some inequities that military survivors face.
        Eliminate the age 62 Survivor Benefit Plan annuity reduction. We
    urge you to take action to eliminate the unfair Survivor Benefit Plan
    (SBP) ``Widows Tax.'' A widow's SBP annuity is reduced by 36 percent
    when she reaches age 62. Before age 62, she receives 55 percent of the
    deceased military retiree's base retirement pay; at age 62, it drops to
    35 percent of the base retirement pay. This is a financially
    devastating blow to many survivors, many of whom are on fixed incomes.
    On top of that it is just plain wrong!
        When Congress passed SBP in 1972, the intent was for the retiree to
    pay 60 percent of program costs, with a 40 percent government subsidy.
    However, due to miscalculations and annuitant changes, the government
    subsidy now is just 19 percent. The retiree is paying 81 percent of SBP
    costs! In 1989 when the subsidy had dropped to just 28 percent,
    Congress reduced premiums to readjust the government's fair share. With
    the government subsidy only 19 percent, a major readjustment is needed
    immediately. One can only imagine the requests that would come from DOD
    if the situation were reversed. One very fair way to rectify the
    situation would be to raise the modest survivor annuities. Many
    military members were misled to believe that the survivor's annuity
    would be 55 percent for life. Many are shocked when they find that the
    annuity will drop to 35 percent at age 62. Additionally, there is no
    such reduction in the federal civilian SBP which is much more highly
    subsidized. It is wrong that the most senior military survivors are not
    protected in a similar manner.
      --Accelerate the fully-paid-up status for SBP and RSFPP participants
            who have reached age 70 and have paid into the program 30
            years. When Congress passed the paid-up provision five years
            ago, it set the effective date at 2008. While that change will
            be welcomed by those who reach age 70 around that time, many
            more will no so benefit. In fact, many current SBP enrollees
            will have to have paid more than 35 years at the time that
            their program is considered paid up. AFSA urges this committee
            to support changing the paid-up effective date to the date of
            enactment of the Fiscal Year 2005 National Defense
            Authorization Act.
      --Allow Dependency and Indemnity Compensation (DIC) widows to remarry
            after age 55 without losing their entitlement. Last year
            Congress took a great step forward by allowing such widows to
            remarry after age 57 without losing their benefit. We ask the
            committee support making that ``age 55'' to make DIC consistent
            with all other federal programs.

                                  HEALTH CARE

        Military health care and readiness are inseparable, and military
    members and their families must know that no matter where they are
    stationed or where the families live, their health care needs will be
    taken care of.
      --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 have had many members say that they know of doctors
            that will not treat them because the doctor does not respect
            nor accept TRICARE. Further questioning usually indicates that
            the doctors do not welcome TRICARE patients because they have
            to accept significantly less reimbursement for their services.
            That begs the question--why should they? We urge this committee
            to consider increasing the CHAMPUS Maximum Allowable Charge to
            higher levels to ensure quality providers stay in the system.
      --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.
        Mr. Chairman, thank you for this opportunity to present some of the
    challenges faced by enlisted military members. As you know, they ask
    little in return for serving their nation. The items they ask us to
    bring to you, such as those above, would provide equity in some cases
    and program improvement in others. On behalf of the members of the Air
    Force Sergeants Association, we ask you to include consideration of
    these items in your deliberations as you formulate your mark-up for the
    Defense portion of the fiscal year 2005 Appropriations Act. We would be
    happy to provide more information or to answer any questions you might
    have on these important matters.
                                     ______

          Prepared Statement of the American Museum of Natural History

    About the American Museum of Natural History
        The American Museum of Natural History [AMNH] is one of the
    nation's preeminent institutions for scientific research and public
    education. Since its founding in 1869, the Museum has pursued its
    mission to ``discover, interpret, and disseminate--through scientific
    research and education--knowledge about human cultures, the natural
    world, and the universe.'' With nearly four million annual visitors--
    approximately half of them children--its audience is one of the largest
    and most diverse of any museum in the country. Museum scientists
    conduct groundbreaking research in fields ranging from all branches of
    zoology, comparative genomics, and bioinformatics to earth, space, and
    environmental sciences and biodiversity conservation. Their work forms
    the basis for all the Museum's activities that seek to explain complex
    issues and help people to understand the events and processes that
    created and continue to shape the earth, life and civilization on this
    planet, and the universe beyond.
        More than 200 Museum scientists, led by 46 curators, conduct
    cutting-edge research programs as well as fieldwork and training.
    Scientists in five divisions (Anthropology; Earth, Planetary, and Space
    Sciences; Invertebrate Zoology; Paleontology; and Vertebrate Zoology)
    are using leading technologies to sequence DNA and create new
    computational tools to retrace the evolutionary tree, document changes
    in the environment, make new discoveries in the fossil record, and
    describe human culture in all its variety. The Museum also conducts
    undergraduate, graduate, and postdoctoral training programs in
    conjunction with a host of distinguished universities.
        The Museum's collections of more than 32 million specimens and
    artifacts are a major resource for Museum scientists as well as for
    more than 250 national and international visiting scientists each year.
    Including endangered and extinct species as well as many of the only
    known ``type specimens,'' or examples of species by which all other
    finds are compared, the collections provide an irreplaceable record of
    life on earth and the critical baseline resources for 21st century
    research in life, earth, environmental, and other sciences. The Museum
    has also recently expanded its collections to include biological
    tissues and isolated DNA maintained in a super-cold tissue facility.
    Preserving genetic material and gene products from rare and endangered
    organisms that may become extinct before science fully exploits their
    potential, this frozen tissue collection is an invaluable research
    resource in many fields, including genetics, comparative genomics, and
    biodefense.
        The Museum interprets the work of its scientists, addresses current
    scientific and cultural issues, and promotes public understanding of
    science through its renowned permanent and temporary exhibits as well
    as its comprehensive education programs. These programs attract more
    than 400,000 students and teachers and more than 5,000 teachers for
    professional development opportunities. The Museum also takes its
    resources beyond its walls through the National Center for Science
    Literacy, Education, and Technology, launched in 1997 in partnership
    with NASA.

    Advancing Department of Defense Science Goals
        The Department of Defense (DOD) safeguards the nation's security
    and is committed to the research, tools, and technology that will
    ensure the capabilities needed to counter 21st century security threats
    most effectively and efficiently. With its highest priority winning the
    global war on terrorism, DOD supports research development to prepare
    for and respond to the full range of terrorist threats, including
    bioterrorism. The American Museum, in turn, is home to preeminent
    programs in molecular biology, comparative genomics, and computation
    that closely tie to DOD's research goals for advancing the nation's
    security and defense capabilities, including biodefense and protection
    of troops in the field.
        Genomic science is critical to the nation's defense interests.
    Moreover, studying genomic data in a natural history context makes it
    possible to more fully understand the impacts of new discoveries in
    genomics and molecular biology. Genomes of the simplest organisms
    provide a window into the fundamental mechanics of life, and
    understanding their natural properties and their evolution (for
    example, the evolution of pathogenicity in bacteria) can help to solve
    challenges in biodefense and bring biology and biotechnology to bear in
    defense applications.
        The American Museum's distinguished molecular research programs are
    deeply engaged in genome research aligned with DOD's various research
    thrusts, and, as discussed below, its unique expertise in evolutionary
    analysis is particularly relevant in these areas. In the Museum's
    molecular laboratories, in operation now for eleven years, more than 40
    researchers in molecular systematics, conservation genetics, and
    developmental biology conduct genetic research on a variety of study
    organisms, utilizing state of the art sequencers and other advanced
    technologies. The labs also nourish the Museum's distinguished training
    programs that serve up to 80 undergraduates, doctoral, and postdoctoral
    trainees annually.
        Advanced computation is also critically important in understanding
    and responding to threats of bioterrorism. The Museum is a leader in
    developing vital computational tools, as parallel computing is an
    essential enabling technology for phylogenetic (evolutionary) analysis
    and intensive, efficient sampling of a wide array of study organisms.
    Museum scientists have constructed an in-house 900-CPU computing
    facility that is the fastest parallel computing cluster in an
    evolutionary biology laboratory and one of the fastest installed in a
    non-defense environment. Their pioneering efforts in cluster computing,
    algorithm development, and evolutionary theory have been widely
    recognized and commended for their broad applicability for biology as a
    whole. The bioinformatics tools Museum scientists are creating will not
    only help to generate evolutionary scenarios, but also will inform and
    make more efficient large genome sequencing efforts. Many of the
    parallel algorithms and implementations (especially cluster-based) will
    be applicable in other informatics contexts such as annotation and
    assembly, breakpoint analysis, and non-genomic areas of evolutionary
    biology and other disciplines.

    Institute of Comparative Genomics
        Building on its strengths in molecular biology, genomics science,
    and computation, in 2001 the Museum launched the Institute for
    Comparative Genomics. The importance of the comparative approach cannot
    be overstated, as investigating genomics with a natural history
    perspective enlarges our understanding of the evolutionary
    relationships among organisms including threat agents and
    pathogenicity, and ultimately, of humans, medicine, and life itself.
    Equipped with DNA sequencers in its molecular labs, vast biological
    collections, researchers with expertise in the methods of comparative
    biology, the computing cluster, and the new frozen tissue collection,
    the Institute is positioned to be one of the world's premier research
    facilities for mapping the genome across a comprehensive spectrum of
    life forms.
        The Institute is establishing a distinguished research record in
    areas of core concern to DOD. Museum scientists are leading major new
    international research projects in assembling the ``tree of life,'' and
    have obtained a patent for an innovative approach to analyzing
    microarray data, which can be used to support more accurate diagnosis
    of pathogens or physiological states that would reduce or interfere
    with human performance. Current projects also include: tracing the
    evolution of pathogenicity and transfer of disease-causing genes over
    time and between species with NIH and DOE support; building a
    comprehensive database of all known finished and incomplete genomes of
    microbial species; developing computational and phylogenetic techniques
    to analyze chromosomal sequence data; developing effective methods of
    culturing difficult to culture species as well as new methods for
    obtaining embryos for antibody staining; and conducting whole genome
    analysis of disease causing microorganisms to understand the
    evolutionary changes that take place in a genome to make it more or
    less virulent. The methodologies, approaches, and algorithms developed
    in all these projects can be extended and applied fruitfully to a
    variety of questions involving pathogens that pose a threat to military
    and civilian populations, including pathogen identification and
    inactivation and host-pathogen interactions.

    Federal Partnership
        So as to contribute the unique capacities of its Institute of
    Comparative Genomics, the Museum proposes a federal partnership with
    DOD to advance common goals in areas including the Biological Sciences
    program in DARPA's Defense Research Sciences, committed to protecting
    our military forces and the public from bio-warfare attacks; and the
    Army Research Office's Life Sciences emphasis in Molecular Genetics and
    Genomics (Research; Development, Test, and Evaluation, Army account;
    Medical Advanced Technology subaccount). The following are examples of
    programs we propose to undertake in key areas where the research and
    training work of Museum scientists supports DOD's fundamental missions:
      --Field identification of vectors of pathogenicity.--Involving DNA
            barcoding of insect vectors and their pathogens, this project
            promises a major innovation in field technology for identifying
            and fighting insect borne diseases. The initiative will lead to
            the development of a handheld device that rapidly and
            accurately identifies insect vectors of infectious diseases.
            Adaptable to any number of biological identification problems,
            the specific focus is on insect vectors of malaria, West Nile,
            and trypanosomiasis. The project entails developing: a
            reference collection of insect vectors, a DNA barcoding method
            to type vectors and their pathogens, and the field-based
            barcoding tool (most likely using microarray technologies) for
            identifying insect vectors and pathogens.
      --Utilizing bacterial genomics to understand the evolution of
            pathogenesis.--This project uses the HACEK group of bacterial
            pathogens as a model system to understand the role of
            horizontal gene transfer (HGT) in the evolution of pathogenesis
            and may provide important clues relevant to new efforts in
            pathogen origin and deactivation.
      --Novel computational approaches to understanding pathogenicity.--
            Biology presents a number of problems of extreme computation
            complexity known as NP-hard problems. One such problem is the
            determination of evolutionary trees, the basis for the
            understanding of the origination and loss of biological
            features, including the origin and loss of pathogenicity. The
            Museum proposes to apply a new approach that uses statistical
            physics analogues, such as the quantum mechanical process of
            particle decay, to model NP-hard problems in evolutionary tree
            construction. Through this approach, we hope to aid in the
            design of novel algorithmic approaches to long-standing
            biological problems, generating new insight into processes such
            as the evolution of pathogenicity.
        The Museum seeks $5 million for its Institute for Comparative
    Genomics to partner with DOD to advance these shared research goals for
    combating bioterrorism and to contribute its singular capacities to
    research critical to the nation's defense. The Museum intends to
    support the initiatives with funds from nonfederal as well as federal
    sources and proposes to use the requested $5 million to advance
    research and training programs in microbial genomics research and
    computation.

                              SUBCOMMITTEE RECESS

        Senator Stevens. Thank you very much. Appreciate your being
    here and the testimony of all the witnesses this morning.
        We are going to reconvene our subcommittee next Wednesday,
    May 12, when we will hear from the Secretary of Defense and the
    Chairman of the Joint Chiefs of Staff. The subcommittee is in
    recess until that time.
        [Whereupon, at 11:40 a.m., Wednesday, May 5, the
    subcommittee was recessed, to reconvene at 9 a.m., Wednesday,
    May 12.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            WEDNESDAY, MAY 12, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:03 a.m., in room SH-216, Hart
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Specter, Domenici,
    Bond, McConnell, Shelby, Gregg, Hutchison, Burns, Inouye,
    Hollings, Byrd, Leahy, Harkin, Dorgan, Durbin, Reid, and
    Feinstein.

                             DEPARTMENT OF DEFENSE

                            Office of the Secretary

    STATEMENTS OF:
            HON. DONALD H. RUMSFELD, SECRETARY
            GENERAL RICHARD B. MYERS, CHAIRMAN, JOINT CHIEF OF STAFF
            DR. DAVID S. CHU, UNDER SECRETARY OF DEFENSE (PERSONNEL AND
                READINESS)
    ACCOMPANIED BY LAWRENCE LANZILLOTTA, COMPTROLLER

                    OPENING STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Good morning, Secretary Rumsfeld, General
    Myers. We welcome you back before our subcommittee at this
    important time for our Nation and for the Department of
    Defense. We also welcome the acting Comptroller, Larry
    Lanzillotta.
        The focus of our hearing today is the fiscal year 2005
    Defense budget. This is our normally scheduled hearing, where
    we ask the Secretary of Defense and the Chairman of the Joint
    Chiefs of Staff to testify at the end of our hearing cycle and
    provide their important perspectives on the budget and answer
    questions that have come up in connection with the other
    subcommittee hearings.
        Last week, we learned a fiscal year 2005 request totaling
    $25 billion is forthcoming. We plan to hold a separate hearing
    on that request when more details are available. If it comes to
    this committee, I urge members to defer their questions
    concerning that request until we have it.
        Sadly, we also have learned a lot over the past week about
    the abuse of Iraqi inmates at the Abu Ghraib prison. These
    actions were absolutely appalling and an embarrassment to our
    great country, as you have said, Mr. Secretary. Congress must,
    and we shall, investigate the matter thoroughly. It is our
    view, however, that the primary jurisdiction of this issue lies
    with the Senate Armed Services Committee and the Senate
    Intelligence Committee, not the Appropriations Committee. This
    committee needs to focus attention on funding required to train
    and equip our men and women in uniform throughout the world.
        Our military remains engaged in critical missions in Iraq,
    Afghanistan, and other areas around the world. It's imperative
    for us to exercise our due diligence in reviewing the $401.7
    billion in Defense spending requests that's already before us.
    We're committed to ensuring the Defense Department is properly
    resourced to win our global war on terrorism. Failure in this
    endeavor is not an option for us, as you have stated, Mr.
    Secretary.
        Mr. Secretary and General Myers, we look forward to this
    hearing today about your priorities in the current budget
    request, as well as any other operational update you may wish
    to provide. I understand you may have a time problem, Mr.
    Secretary. Please keep us informed on that.
        We will make--your full statements are already a part of
    our record.
        Each Member, without objection, will be limited to 5
    minutes in the opening round of questions. Time permitting, we
    will proceed with a second round of questioning.
        Before you begin your opening statements, I'll ask my
    colleague, my co-chairman from Hawaii, if he has comments.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Mr. Chairman, I thank you very much. And
    good morning, Mr. Secretary and General Myers. And I join my
    Chairman and welcome you to our Subcommittee.
        During our hearings this year, we received testimony from
    the military departments, the Guard and Reserves, Missile
    Defense Agency, and the Surgeons General. As we have examined
    the testimony of these officials, it is very clear that most
    are very supportive of your budget request. In our review, we
    learned that, at the same time as our forces are fighting
    overseas, your Department is engaged in many major and somewhat
    controversial changes. The Navy and Marines are looking at
    swapping crews overseas to save money and time for deploying
    ships, a policy which could impact how many ships we need. The
    Army is adding forces by reconstructing brigades, but there's
    no agreement to permanently provide the end strength to achieve
    this. The Air Force is preparing to introduce the F-22 to its
    force structure, which dramatically increases combat
    capability. And there are some who still question whether the
    system is required. All the services are examining their forces
    overseas to alter the global footprint while we prepare for
    base closures domestically. And we are now aware that a budget
    amendment will be forthcoming to help pay for the rising cost
    of war in Iraq when for months we thought we could defer any
    increase until next year.
        So, Mr. Secretary and General Myers, we know these are very
    challenging and critical times for the Defense Department. The
    challenges have been heightened by the events coming to light
    in recent weeks, and I'm sure I don't have to tell you that it
    has been very difficult for all Americans to witness scenes of
    torture and human-rights abuses.
        Mr. Chairman, I know that many are likely to want to
    discuss this today, but we should remember that our primary
    jurisdiction is the budget of the Defense Department, not
    investigating criminal acts. It is, nonetheless, very important
    that the Congress and the administration continue to
    investigate these incidents, and I'm certain they will.
        Mr. Secretary, General Myers, I know you recognize the
    gravity of this matter and the serious impact it is having on
    our Nation's prestige and influence. I, for one, am very
    concerned about the long-term effect it will have on our
    military recruiting and retention. It is equally important that
    we realize we're all in it together. I'm one of the few on this
    committee that voted against going to war in Iraq. But now that
    we are engaged in this policy, we must simply find a way to see
    it through to a successful and swift conclusion.
        And I thank you, Mr. Chairman.
        Senator Stevens. Without objection, we're going to postpone
    opening statements of other members and go right to the
    Secretary's statement. As I said, it's printed in the record.
        Mr. Secretary, we're happy to have you here with us today.
        Secretary Rumsfeld. Thank you, Mr. Chairman, Senator
    Inouye, members of the committee. I'd like to make a brief
    statement, and I certainly thank you for this opportunity to
    meet on the President's proposed budget.
        First, I want to commend the men and women in uniform and
    the civilians in the Department of Defense who support them.
    It's important, in times like this, that we publicly indicate
    that we value their service, we value their sacrifice. They are
    doing a superb job for this country.

                           ACCOMPLISHMENTS SINCE 2001

        When this administration took office 3 years ago, the
    President charged us to try to prepare the Department to meet
    the new threats that our Nation will face in the 21st century.
    To meet that charge, we fashioned a new defense strategy, a new
    force-sizing construct. We've issued a new unified command
    plan, instituted more realistic budgeting so that the
    Department now looks to emergency supplementals for the unknown
    cost of fighting wars and not simply to sustain readiness. We
    transformed the way the Department prepares its war plans, and
    adopted a new lessons-learned approach during Operation Iraqi
    Freedom. And we have undertaken a comprehensive review of our
    global force structure.
        The scope and scale of what has been accomplished is
    substantial. Our challenge is to build on these activities even
    as we fight the global war on terror. One effect of the global
    war on terror has been a significant increase in the
    operational tempo and an increased demand on the force. To
    manage the demand, we must first be clear about the problems so
    that we can work together to fashion appropriate solutions. We
    hope the increased demand on the force we're experiencing today
    will prove to be a spike driven by the deployment of some
    138,000 troops in Iraq.

                          MANAGING DEMAND ON THE FORCE

        For the moment, the increased demand is real, and we have
    taken a number of immediate actions. We're working to increase
    international military participation in Iraq, and have had good
    success. More recently, we've lost two or three countries from
    that coalition, which was unfortunate. We've accelerated the
    training of Iraqi security forces, and we now have something
    like 206,000 strong, heading toward 265,000. And our forces are
    working to hunt down those who threaten Iraq's stability and
    Iraq's transition to self reliance.
        Another way to deal with the increased demand on the force
    is to add more people, and we've already done so, a fact that
    seems not to be fully recognized. Using the emergency powers
    granted by Congress, we have already increased the active duty
    force levels by something in the neighborhood of 30,000 to
    35,000 above the pre-emergency authorized end strength. We've
    done this over the past 2 years. If the war on terror demands
    it, we will not hesitate to increase force levels still more
    using the same emergency authority. But it should give us pause
    that even a temporary increase in our force levels was and
    remains necessary.
        Think about it. At this moment, we have a pool of about 2.6
    million men and women in the Active, Reserve, and Guard,
    including the Individual Ready Reserve, yet the deployment of
    135,000 out of a pool of 2.6 million has required that we
    temporarily increase the size of the force by some 35,000. That
    suggests that the real problem is not the size of the force,
    per se, but rather the way the force has been organized over
    the years and the mix of capabilities at our disposal. And it
    suggests that our challenge is considerably more complex than
    simply adding more troops.
        General Pete Schoomaker, the Army Chief of Staff, compares
    the problem to a barrel of water on which the spigot is placed
    near the top of the barrel, and you open the spigot and very
    little comes out because all you can access is the top of the
    barrel. The answer, at least from the taxpayer's standpoint, it
    seems to me, is not to get a bigger barrel or more barrels;
    it's to move the spigot down on the barrel so we can access all
    of, in this case, the 2.6 million men and women that we should
    have access to, and take full advantage of their skills and
    their talents and the fact that every one of them is a
    volunteer.
        We have too few Active and Guard and Reserve forces with
    the skill sets that are in high demand, and we have too many
    Guard and Reserve with skills that are in too little demand.
    Therefore, we urgently need to re-balance the skill sets within
    the Reserve components, and also between the Active and the
    Reserve components, so that we have enough of the right kinds
    of forces available to accomplish the missions. And we need to
    focus on transforming the forces for the future, making sure we
    continue to increase the capability of the force and, thus, our
    ability to do more with those forces. The services are working
    to do just that.
        In looking at our global force posture, some observers have
    focused on the number of things--troops, tanks, ships--that we
    might add or remove to one portion of the world or another. I
    would submit that that may very well not be the best measure
    for today. For example, the Army has put forward a plan that,
    by using its emergency powers, we will increase force levels by
    roughly 6 percent. But because of the way they will do it,
    General Schoomaker estimates that the Army will add, not 6
    percent, but up to 30 percent more combat power--that is to
    say, go from 33 brigades up to 43 brigades, with a possibility
    of going to 48 brigades. Instead of adding more divisions, the
    Army is focusing on creating a 21st century modular army made
    up of self-contained, more self-sustaining brigades that are
    available to work for any division commander. As a result, 75
    percent of the Army's brigade structure should always be ready
    in the event of a crisis. The Army's plan will increase the
    number of active brigades significantly. But because we will be
    using emergency powers, we will have the flexibility to reduce
    the number of active troops if the security situation permits.

                     SUPPORTING THE GLOBAL WAR ON TERRORISM

        Before highlighting the 2005 budget request, let me talk
    briefly about the funding for the global war on terror. As the
    year has unfolded, not surprisingly the security situation and
    the requirements in Iraq have changed. As a result, General
    Abizaid has requested additional combat capability for the
    period ahead, and the President has approved that request. We
    regret having to extend those individuals necessary to provide
    that capability. They had anticipated serving in Iraq, or in
    theater, for up to 365 days, and this extension will extend
    their time in Iraq by up to 90 days. We have recently
    identified, and are now preparing to deploy, other forces to
    replace them.
        Because our Nation is at war, we need to provide combat
    forces with the resources they need to complete their missions.
    While we do not yet know the exact cost of operations in 2005,
    we do need to plan for contingencies so that there's no
    disruption in the resources for the troops. The cost of
    supporting these operations increases the chance that certain
    accounts, such as Army operations and maintenance,
    particularly, will experience funding shortfalls beyond
    February or March 2005.
        As Senator Inouye mentioned, the President has, therefore,
    asked Congress for a $25 billion contingency reserve fund that
    can be used for operations in Afghanistan and Iraq until we can
    get a clearer picture of what will be necessary for a fiscal
    year 2005 supplemental. This fund would be used primarily for
    operation and maintenance requirements, such as personnel
    support costs, combat operations, supplies, force protection,
    and transportation.
        I want to emphasize that this $25 billion proposed reserve
    fund would not be all that would be needed in 2005. We are
    anticipating submitting a full 2005 supplemental appropriation
    request early next year, when we can better estimate the exact
    cost.

                 HIGHLIGHTS OF FISCAL YEAR 2005 BUDGET REQUEST

        Returning now to the 2005 budget request, we have requested
    additional funds to strengthen intelligence, including
    increases in human intelligence, persistent surveillance, as
    well as technical analysis and information-sharing. We have
    also strong funding for transformation and other acquisition
    needs. The President's budget requests funds for pay and
    quality-of-life improvements for the troops. These funds
    properly focus on the men serving--men and women serving in the
    Armed Forces. In recent years, Congress has, from time to time,
    added entitlement-like changes beyond recommendations such as
    these that have been, for the most part, concentrated on those
    who have already served. We certainly applaud the desire to
    honor that service. But I should point out that the effects of
    these decisions, cumulatively, are important. They're
    increasing substantially the permanent cost of running the
    Department of Defense (DOD). By fiscal year 2009, they,
    cumulatively, will add over $20 billion a year to the Defense
    budget, with only modest effect on recruiting and retaining the
    current active force.
        I recognize there are legitimate questions and legitimate
    differences about the best way to compensate the forces. For
    this reason, I'm appointing an Advisory Committee on Military
    Compensation to conduct a comprehensive review of military
    compensation and benefits, with a view towards simplifying and
    improving them. Before making further changes, I hope that you
    will allow us to first develop a comprehensive and integrated
    set of compensation proposals, which we would submit to you
    next year.

                              SPECIAL LEGISLATION

        One of the most important ways in which Congress can
    support the global war on terror is to support three special
    authorities that we have requested. First is $500 million to
    train and equip military and security forces in Iraq,
    Afghanistan, and friendly nearby regional nations to enhance
    their capability to combat terrorism and to support U.S.
    operations in Iraq and Afghanistan. It is a great deal cheaper
    for the taxpayer if we are able to train and equip forces in
    Iraq and Afghanistan than it is to maintain U.S. forces in
    those countries.
        Second, the Commander's Emergency Response Program, $300
    million, to enable military leaders in Iraq and Afghanistan--
    U.S. military leaders--to respond to urgent humanitarian relief
    and reconstruction needs. This has been a remarkably successful
    program, with quick turnaround projects averaging in the
    neighborhood of $5,000 to $10,000 each. Commanders not only
    help people in their operations area, but they also gain
    support in defeating terrorists and building themselves a
    better future.
        And third is increased drawdown authority--we're requesting
    $200 million under the Afghan Freedom Support Act--to provide
    additional help for the Afghan National Army. The President's
    2005 budget does not request specific authorization for these
    three authorities. Therefore, the Department would need to
    reprogram funding to use them. This underscores the importance
    of Congress increasing the Department's general transfer
    authority to $4 billion, which would represent slightly under 1
    percent of total DOD funding. Higher general transfer authority
    would give us a needed ability to shift funds from less
    pressing needs to fund must-pay bills and emerging requirements
    as the circumstances on the ground change over time. As we've
    seen in the last three years, such requirements have been a
    constant feature of our military programs.

                               PREPARED STATEMENT

        Mr. Chairman, the President has asked Congress $401.7
    billion for fiscal year 2005. That is a very, very large amount
    of money, the taxpayers' hard-earned money. Such investments
    will likely be required for some years, because our Nation is
    engaged in a struggle that could very likely go on for a number
    of years. Our objective is to ensure that the Armed Forces
    remain the best-trained, the best-equipped fighting force in
    the world, and that we treat volunteers who make up that force
    with the respect equal to their sacrifice and their dedication.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you very much, Mr. Secretary.
        [The statement follows:]
                    Prepared Statement of Donald H. Rumsfeld

                                  INTRODUCTION

        Mr. Chairman, members of the Committee, I am pleased to be here to
    discuss the progress in the global war on terrorism, our transformation
    efforts, and to discuss the President's 2005 budget request for the
    Department of Defense.
        First, I want to commend the courageous men and women in uniform
    and the Department civilians who support them. They are remarkable--and
    what they have accomplished since our country was attacked 30 months
    ago is impressive. In 2\1/2\ years, they have helped to: Overthrow two
    terrorist regimes, rescued two nations, and liberated some 50 million
    people; capture or kill 46 of the 55 most wanted in Iraq--including
    Iraq's deposed dictator, Saddam Hussein; hunt down thousands of
    terrorists and regime remnants in Iraq and Afghanistan; capture or kill
    close to two-thirds of known senior al-Qaeda operatives; disrupt
    terrorist cells on most continents; and likely prevent a number of
    planned terrorist attacks.
        Our forces are steadfast and determined. We value their service and
    sacrifice, and the sacrifice of their families.
        With your support, we have the finest Armed Forces on the face of
    the Earth.
        We have a challenge: to support the troops and to make sure they
    have what they will need to defend the nation in the years ahead.
        We are working to do that in a number of ways: By giving them the
    tools they need to win the global war on terror; by transforming for
    the 21st century, so they will have the training and tools they need to
    prevail in the next wars our nation may have to fight--wars which could
    be notably different from today's challenges; and by working to ensure
    that we manage the force properly--so we can continue to attract and
    retain the best and brightest, and sustain the quality of the all-
    volunteer force.
        Each represents a significant challenge in its own right. Yet we
    must accomplish all of these critical tasks at once.
        When this Administration took office three years ago, the President
    charged us with a mission--to challenge the status quo, and prepare the
    Department of Defense to meet the new threats our nation will face as
    the 21st century unfolds.
        We have done a good deal to meet that charge. Consider just some of
    what has been accomplished:
      --We have fashioned a new defense strategy and a new force sizing
            construct.
      --We have 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 more on how we might be
            threatened, and what portfolio of capabilities we will need to
            deter and defend against those new threats.
      --We have fashioned a new Unified Command Plan, with a new Northern
            Command, that became fully operational last September, to
            better defend the homeland; the Joint Forces Command focused on
            transformation; and a new Strategic Command responsible for
            early warning of, and defense against, missile attack and the
            conduct of long-range attacks.
      --We have transformed the Special Operations Command, expanding its
            capabilities and its missions, 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, supported by other combatant commands.
      --We have taken critical steps to attract and retain talent in our
            Armed Forces--including targeted pay raises and quality of life
            improvements for the troops and their families.
      --We have instituted realistic budgeting, so the Department now looks
            to emergency supplementals for the unknown costs of fighting
            wars, not to sustain readiness.
      --We have reorganized the Department to better focus our space
            activities.
      --Congress has established a new Under Secretary of Defense for
            Intelligence and an Assistant Secretary of Defense for Homeland
            Defense.
      --We have completed the Nuclear Posture Review, and adopted a new
            approach to deterrence that will enhance our security, while
            permitting historic deep reductions in offensive nuclear
            weapons.
      --We have pursued a new approach to developing military capabilities.
            Instead of developing a picture of the perfect system, and then
            building the system to meet that vision of perfection--however
            long it takes or costs--the new approach is to start with the
            basics, roll out early models faster, and then add capabilities
            to the basic system as they become available.
      --We have reorganized and revitalized the missile defense research,
            development and testing program--and are on track to begin
            deployment of our nation's first rudimentary ballistic missile
            defenses later this year.
      --We have established new strategic relationships, that would have
            been unimaginable just a decade ago, with nations in Central
            Asia, the Caucasus, and other critical areas of the world.
      --We transformed the way the Department prepares its war plans--
            reducing the time it takes to develop those plans, increasing
            the frequency with which they are updated, and structuring our
            plans to be flexible and adaptable to changes in the security
            environment.
      --We adopted a new ``Lessons Learned'' approach during Operation
            Iraqi Freedom, embedding a team with U.S. Central Command that
            not only studied lessons for future military campaigns, but
            provided real-time feedback that had an immediate impact on our
            success in Iraq.
      --We made a number of key program decisions that are already having a
            favorable impact on the capability of the force. Among others:
        --We are converting 4 Trident nuclear SSBN subs into conventional
                SSGN subs capable of delivering special forces and cruise
                missiles into denied areas.
        --The Army has deployed its first Stryker brigade to Iraq, is
                completing conversion of the second, and is replacing the
                Crusader with a new family of precision artillery that is
                being developed for the Future Combat System.
        --We have revitalized the B-1 bomber fleet by reducing its size and
                using the savings to modernize the remaining aircraft with
                precision weapons and other critical upgrades.
      --We have also undertaken a comprehensive review of our global force
            posture, so we can transform U.S. global capabilities from a
            structure driven by where the wars of the 20th century ended,
            to one that positions us to deal with the new threats of the
            21st century security environment.
      --We have established a new Joint National Training Capability, that
            will help us push joint operational concepts throughout the
            Department, so our forces train and prepare for war the way
            they will fight it--jointly.
      --We have worked with our Allies to bring NATO into the 21st
            century--standing up a new NATO Response Force that can deploy
            in days and weeks instead of months or years, and transforming
            the NATO Command Structure--including the creation of a new
            NATO command to drive Alliance transformation.
      --With the help of Congress last year, we are establishing a new
            National Security Personnel System that should help us better
            manage our 746,000 civilian employees, and we are using the new
            authorities granted us last year to preserve military training
            ranges while keeping our commitment to responsible stewardship
            of the environment.
        The scope and scale of what has been accomplished is remarkable. It
    will have an impact on the capability of our Armed Forces for many
    years to come.
        We will need your continued support as we go into the critical year
    ahead.
        Our challenge is to build on these successes, and continue the
    transformation efforts that are now underway. In 2004, our objectives
    are to:
      --Successfully prosecute the global war on terror;
      --Further strengthen our combined and joint war fighting
            capabilities;
      --Continue transforming the joint force, making it lighter, more
            agile and more easily deployable, and instilling a culture that
            rewards innovation and intelligent risk-taking;
      --Strengthen our intelligence capabilities, and refocus our
            intelligence efforts to support the new defense strategy and
            our contingency plans;
      --Reverse the existing WMD capabilities of unfriendly states and non-
            state actors, and stop the global spread of WMD;
      --Improve our management of the force;
      --Refocus our overseas presence, further strengthen key alliances,
            and improve our security cooperation with nations that are
            likely partners in future contingencies;
      --Continue improving and refining DOD's role in homeland security and
            homeland defense; and
      --Further streamline DOD processes, continuing financial management
            reform and shortening acquisition cycle times.
        So, we have an ambitious agenda. But none of these tasks can be put
    off.
        Our task is to prepare now for the tomorrow's challenges, even as
    we fight today's war on terror.

                               MANAGING THE FORCE

        One effect of the global war on terror has been a significant
    increase in operational tempo, which has resulted in an increased
    demand on the force. Managing the demand on the force is one of our top
    priorities. But to do so, we must be clear about the problem--so we can
    work together to fashion the appropriate solutions.
        We hope the increased demand on the force we are experiencing today
    will prove to be a ``spike,'' driven by the deployment of nearly
    135,000 troops in Iraq. We hope and anticipate that that spike will be
    temporary. We do not expect to have 135,000 troops permanently deployed
    in any one campaign.
        But for the moment, the increased demand is real--and we are taking
    a number of immediate actions. Among other things:
      --We are working to increase international military participation in
            Iraq.
      --Japan began deploying its Self-Defense Forces to Iraq in January--
            the first time Japanese forces have been deployed outside their
            country since the end of World War II.
      --As more international forces deploy, we have accelerated the
            training of Iraqi security forces--now some 200,000 strong--to
            hasten the day when the Iraqis themselves will be able to take
            responsibility for the security and stability of their country,
            and all foreign forces can leave.
      --And as we increase Iraq's capability to defend itself, our forces
            are dealing aggressively with the threat--hunting down those
            who threaten Iraq's stability and transition to self-reliance.
        Another way to deal with the increased demand on the force is to
    add more people. We have already done so. Using the emergency powers
    granted by Congress, we have increased force levels by more than 35,000
    above the pre-emergency authorized end strength.
      --The Army is up roughly 11,400 above authorized end strength;
      --The Navy is up roughly 3,600;
      --The Marine Corps is up some 600, and
      --The Air Force is up about 19,800.
        If the war on terror demands it, we will not hesitate to increase
    force levels still more using the emergency authorities. And because of
    the emergency powers, we have the flexibility to increase or reduce
    force levels in the period ahead, as the security situation permits,
    and as the transformation efficiencies bear fruit.
        But it should give us pause that even a temporary increase in our
    force levels was, and remains, necessary. Think about it: At this
    moment we have a force of 2.6 million people, both active and reserve:
    1.4 million active forces; 869,000 in the Selected Reserve--that is the
    guard and reserve forces in units; and an additional 286,000 in the
    Individual Ready Reserves.
        Yet, despite these large numbers, the deployment of 135,000 troops
    in Iraq has required that we temporarily increase the size of the force
    by some 35,000.
        That should tell us a good deal about how our forces are organized.
        It suggests that the real problem is not the size of the force, per
    se, but rather the way the force has been organized over the years, and
    the mix of capabilities at our disposal. And it suggests that our
    challenge is considerably more complex than simply adding more troops.
        General Pete Schoomaker, the Army Chief of Staff, compares the
    problem to a barrel of water, on which the spigot is placed too high
    up. When you turn it on, it only draws water off the top, while the
    water at the bottom can't be accessed. The answer to that problem is
    not a bigger barrel; rather, the answer is to move the spigot down, so
    that more of the water is accessible and can be used.
        In other words, our challenge today is not simply one of increasing
    the size of the force. Rather, we must better manage the force we
    have--to make sure we have enough people in the right skill sets and so
    that we take full advantage of the skills and talents of everyone who
    steps forward and volunteers to serve.
        We have too few Guard and Reserve forces with certain skill sets
    that are high demand--and too many Guard and Reserve with skills that
    are in little demand.
        Therefore, we urgently need to rebalance the skill sets within the
    reserve component, and between the active and reserve components, so we
    have enough of the right kinds of forces available to accomplish our
    missions.
        And we need to do a far better job of managing the force. That
    requires that we focus not just on the number of troops available
    today--though that is of course important--but on transforming the
    forces for the future, making sure we continue to increase the
    capability of the force, and thus our ability to do more with fewer
    forces.
        And the Services are working to do just that.

                              MASS VS. CAPABILITY

        One thing we have learned in the global war on terror is that, in
    the 21st century, what is critical to success in military conflict is
    not necessarily mass as much as it is capability.
        In Operation Iraqi Freedom, Coalition forces defeated a larger
    adversary. They did it not by bringing more troops to the fight, which
    we were ready to do, but by overmatching the enemy with superior speed,
    power, precision and agility.
        To win the wars of the 21st century, the task is to make certain
    our forces are arranged in a way to ensure we can defeat any
    adversary--and conduct all of the operations necessary to achieve our
    strategic objectives.
        In looking at our global force posture review, some observers have
    focused on the number of troops, tanks, or ships that we might add or
    remove in a given part of the world. I would submit that that may well
    not be the best measure.
        If you have 10 of something--say ships, for the sake of argument--
    and you reduce the number by two, you end up with fewer of them. But if
    you replace the remaining ships with ships that have double the
    capability of those removed, then obviously you have not reduced
    capability even though the numbers have been reduced.
        The same is true as we look at the overall size of the force. What
    is critical is the capability of the Armed Forces to project power
    quickly, precisely, and effectively anywhere in the world.
        For example, today the Navy is reducing force levels. Yet because
    of the way they are arranging themselves, they will have more combat
    power available than they did when they had more people.
        In Operation Iraqi Freedom, the Navy surged more than half the
    fleet to the Persian Gulf region for the fight. With the end of major
    combat operations, instead of keeping two or three carrier strike
    groups forward deployed, as has been traditional Navy practice, they
    quickly redeployed all their carrier strike groups to home base. By
    doing so, they are resetting their force in a way that will allow them
    to surge over 50 percent more combat power on short notice to deal with
    future contingencies.
        The result? Today, six aircraft carrier strike groups are available
    to respond immediately to any crisis that might confront us. That
    capability, coupled with the application of new technologies, gives the
    Navy growing combat power and greater flexibility to deal with global
    crises--all while the Navy is moderately reducing the size of its
    active force.
        The Army, by contrast, has put forward a plan that, by using
    emergency powers, will increase the size of its active force by roughly
    6 percent or up to 30,000 troops above authorized end strength. But
    because of the way they will do it, General Schoomaker estimates the
    Army will be adding not 6 percent, but up to 30 percent more combat
    power.
        This is possible because, instead of adding more divisions, the
    Army is moving away from the Napoleonic division structure designed in
    the 19th century, focusing on creating a 21st century ``Modular Army''
    made up of self-contained, more self-sustaining brigades that are
    available to work for any division commander.
        So, for example, in the event of a crisis, the 4th Infantry
    Division commander could gather two of his own brigades, and combine
    them with available brigades from, say, the 1st Armored Division and
    the National Guard, and deploy them together. The result of this
    approach is jointness within the service, as well as between the
    services. And that jointness--combined with other measures--means that
    75 percent of the Army's brigade structure should always be ready in
    the event of a crisis.
        The Army's plan would increase the number of active brigades
    significantly over the next four years. But because we will be using
    emergency powers, we will have the flexibility to reduce the number of
    troops if the security situation permits--so the Army would not be
    faced with the substantial cost of supporting a larger force as the
    security situation and the efficiencies permit.
        Yet even if the security situation, and progress in transformation,
    were to permit the Army eventually to draw down the force, the new way
    they are arranging their forces will ensure the United States still has
    more ground combat power--more capability.
        So we have two different approaches:
      --In one case, the Navy is reducing force levels while increasing
            capability;
      --In the other, the Army is increasing troop levels--but doing so in
            a way that will significantly increase its capability;
      --And in both cases, the increase in capability of each service will
            be significant.
        The point is: our focus needs to be on more than just numbers of
    troops. It should be on finding ways to better manage the forces we
    have, and by increasing the speed, agility, modularity, capability, and
    usability of those forces.

                                DOD INITIATIVES

        Today, using authorities and flexibility Congress has provided, DOD
    has several dozen initiatives underway to improve management of the
    force, and increase its capability.
        Among other things:
      --We are investing in new information age technologies, precision
            weapons, unmanned air and sea vehicles, and other less
            manpower-intensive platforms and technologies.
      --We are working to increase the jointness of our forces, creating
            power that exceeds the sum of individual services.
      --We are using new flexibility under the fiscal year 2004 National
            Defense Authorization Act to take civilian tasks currently done
            by uniformed personnel and convert them into civilian jobs--
            freeing military personnel for military tasks.
        --This year, we will begin to move 10,000 military personnel out of
                civilian tasks and return them to the operational force--
                effectively increasing force levels by an additional 10,000
                service members in 2004. An additional 10,000 conversions
                are planned for 2005.
      --We have begun consultations with allies and friends about ways to
            transform our global force posture to further increase
            capability.
        We are already working to rebalance the active and reserve
    components. We are taking skills that are now found almost exclusively
    in reserve components and moving them into the active force, so that we
    are not completely reliant on the Guard and Reserve for those needed
    skills. And in both the active and reserve components, we are moving
    forces out of low demand specialties, such as heavy artillery, and into
    high-demand capabilities such as military police, civil affairs, and
    special operations forces.
        Already, in 2003, the services have rebalanced some 10,000
    positions within and between the active and reserve components. For
    example, the Army is already transforming 18 Reserve field artillery
    batteries into military police. We intend to expand those efforts this
    year, with the Services rebalancing an additional 20,000 positions in
    2004, and 20,000 more in 2005--for a total of 50,000 rebalanced
    positions by the end of next year.
        We are also working to establish a new approach to military force
    management called ``Continuum of Service.'' The idea is to create a
    bridge between the Active and Reserve Components--allowing both active
    and reserve forces greater flexibility to move back and forth between
    full-time and part-time status, and facilitating different levels of
    participation along that continuum.
        Under this approach, a Reservist who normally trains 38 days a year
    could volunteer to move to full time service for a period of time--or
    some increased level of service between full-time and his normal
    reserve commitment, offering options for expanded service that do not
    require abandoning civilian life. Similarly, an active service member
    could request transfer into the Reserve component for a period of time,
    or some status in between, without jeopardizing his or her career and
    opportunity for promotion. And it would give military retirees with
    needed skills an opportunity to return to the service on a flexible
    basis--and create opportunities for others with specialized skills to
    serve, so we can take advantage of their experience when the country
    needs it.
        For example, Coalition forces in Iraq need skilled linguists--so
    under the Continuum of Service approach we have recruited 200 Iraqi-
    Americans into a special Individual Ready Reserve program, and are
    deploying the first program graduates to Iraq.
        The ``Continuum of Service'' would allow the Armed Forces to better
    take advantage of the high-tech skills many Reservists have developed
    by virtue of their private sector experience--while at the same time
    creating opportunities for those in the Active force to acquire those
    kinds of skills and experiences. It encourages volunteerism, and
    improves our capability to manage the military workforce in a flexible
    manner, with options that currently exist only in the private sector.
        We have also been working to fix the mobilization process. We have
    worked hard over the past year to add more refined planning tools to
    the process, and make it more respectful of the troops, their families,
    and their employers. Among other things:
      --We have tried to provide earlier notifications, giving troops as
            much notice as possible before they are mobilized, so they can
            prepare and arrange their lives before being called up;
      --We have worked to ensure that when they are called up, it is for
            something important and needed--and not to replace someone in
            task that could wait until a contingency is over;
      --We have tried to limit tours, and give the troops some certainty
            about the maximum length of their mobilization and when they
            can expect to resume civilian life. We are doing better, but in
            my opinion, the process is still not good enough.
        And we are working each day to make the process better, and more
    respectful of the brave men and women who make up the Guard and
    Reserve.
        As you can see, we have a number of initiatives underway that we
    are confident will improve the management and treatment of the Guard
    and Reserve forces.
        The men and women who make up the Guard and Reserve are all
    volunteers. They signed up because they love their country, and want to
    serve when the country needs them.
        A number of you on this Committee have served in the Guard and
    Reserve, as have I. Each of us knew when we signed up, it was not to
    serve one weekend a month and two weeks active duty. We signed up so
    that if war were visited upon our country, we would be ready to leave
    our work and family, and become part of the active duty force.
        Well, on September 11th, war was visited on our country. Our nation
    was attacked--more than 3,000 innocent men, women, and children were
    killed in an instant. And at this moment, in caves and underground
    bunkers half-a-world away, dangerous adversaries are planning new
    attacks--attacks they hope will be even more deadly than the one on
    September 11th.
        We are a nation at war. If we were not to call up the Guard and
    Reserves today, then why would we want to have them at all? Why were we
    asking them to sacrifice time with their families every month to train?
    And why are the taxpayers paying for postservice benefits, including
    healthcare and retirement pay, that add up to between $250,000 and
    $500,000 per reservist?
        Availability for service is the purpose of the Guard and Reserve.
    It is what they signed up for. And I know that a large number of them
    have stepped forward and volunteered to be mobilized for service in
    Iraq.
        Our challenge--our responsibility--is to do everything we can to
    see that they are treated respectfully, managed effectively, and that
    they have the tools they need to win today's war, and to deter future
    wars.
        We are working to do just that--to better manage the force, and to
    transform the force to make it more capable for the 21st century.
        Today, with authority granted by Congress, DOD has the flexibility
    to adjust troop levels as the security situation requires.
      --We have authority to increase or decrease, as need arises.
      --We are using that authority; and
      --We are working on a number of new initiatives that will allow us to
            better manage and transform the force.
        However, we believe that a statutory end strength increase would
    take away the current flexibility to manage the force:
      --First, if the current increased demand turns out to be a spike and
            if we are successful in the transformation and rebalancing
            initiatives underway, the Department would face the substantial
            cost of supporting a larger force when it may no longer be
            needed--pay and benefits, such as lifetime healthcare, for each
            service member added, not to mention the additional costs in
            equipment, facilities, and force protection.
      --Second, if Congress permanently increases the statutory end
            strength, instead of using the already available emergency
            powers, we would have to take the cost out of our top line.
            That would require cuts in other parts of the defense budget--
            crowding out investments in the very programs that will allow
            us to manage the force and make it more capable.
        None of us has a crystal ball to see into the future. You have
    given us the authority to adjust the size of the force, and the
    flexibility to deal with unknowns. We have been using that authority
    over the past two plus years, even as we work to implement
    comprehensive measures to better manage the force. I urge Congress to
    not lock us into a force size and structure that may or may not be
    appropriate in the period ahead.
        Instead, help us to support the Armed Services with the
    transformational initiatives they now have underway; help us rebalance
    the active and reserve force, and give the troops more options to
    contribute along an expanded continuum of service; help us add
    capability, and transform the force for the future.

                                  2005 BUDGET

        The President's 2005 budget requests the funds to do that.
        Before highlighting the 2005 request, let me talk briefly about
    funding the Global War on Terrorism.
        As the year has unfolded, the security situation and requirements
    in Iraq have evolved. General Abizaid has requested additional combat
    capability for the period ahead, and I have approved his request.
        We regret having to extend those individuals necessary to provide
    that capability; they had anticipated being in country or in theater
    for up to 365 days and this will extend their time there. We are
    currently identifying and preparing to deploy other forces to replace
    them.
        We have been using emergency powers granted by Congress to increase
    the overall number of U.S. military forces above statutory end strength
    and will continue to use those authorities to adjust force levels as
    necessary.
        Because our nation is at war, we must provide our warfighters all
    the resources they need to conduct operations and complete their
    missions. While we do not yet know the exact costs for operations in
    2005, we need to plan for contingencies so there is no disruption in
    resources for our troops. The costs of supporting these operations
    increase the chance that certain accounts, such as Army operations and
    maintenance, will experience funding shortfalls beyond February or
    March of 2005.
        The President has therefore asked Congress for a $25 billion
    contingency reserve fund that can be used for operations in Afghanistan
    and Iraq until we can get a clearer picture on what will be necessary
    for the fiscal year 2005 supplemental. This reserve fund would be used
    primarily for operation and maintenance requirements such as personnel
    support costs, combat operations, supplies, force protection, and
    transportation. Specifics include:
      --Fuel for helicopters, tanks, and other vehicles.
      --Transportation costs for movement of personnel and equipment in and
            out of the theater of operations.
      --Equipment maintenance (such as lubricants, repair parts) and
            logistics supplies.
      --Clothing and individual equipment.
      --Operation and maintenance of troop billeting, base camps, dining
            facilities, airfields, and other logistics activities.
      --Communications, such as leased telecommunications lines.
        This $25 billion reserve fund will not be all that is needed for
    2005. We are anticipating submitting a full fiscal year 2005
    supplemental appropriation request early next year when we can better
    estimate exact costs.
        Returning now to the 2005 request, the President's first defense
    budgets were designed while our defense strategy review was still
    taking place. It was last year's budget--the 2004 request--that was the
    first to fully reflect the new defense strategies and policies.
        One of the key budget reforms we implemented last year is the
    establishment of a 2-year budgeting process in the Department of
    Defense--so that the hundreds of people who invest time and energy to
    rebuild major programs every year can be freed up and not be required
    to do so on an annual basis, and can focus more effectively on
    implementation.
        The 2005 budget before you is, in a real sense, a request for the
    second installment of funding for the priorities set out in the
    President's 2004 request.
        We did not rebuild every program. We made changes to just 5 percent
    of the Department's planned 2005 budget, and then only on high-interest
    and must-fix issues--and then only when the costs incurred to mitigate
    risks could be matched by savings elsewhere in the budget.
        The President's 2005 budget requests continued investments to
    support the six transformational goals we identified in our 2001
    defense review:
      --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 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.
        In all, in 2005, we have requested $29 billion for investments in
    transforming military capabilities that will support each of these
    critical objectives.
        A critical priority in the President's 2005 budget is the $10.3
    billion for missile defense, including: $9.2 billion for the Missile
    Defense Agency--an increase of $1.5 billion above the President's 2004
    request; and $1 billion for Patriot Advanced Capability-3, the Medium
    Extended Air Defense System, and other short and medium range
    capabilities.
        The budget also includes $239 million in funding for accelerated
    development of Cruise Missile Defense, with the goal of fielding an
    initial capability in 2008.
        The 2005 budget request includes critical funds for Army
    Transformation, including: $3.2 billion to support continued
    development of the Future Combat Systems--an increase of $1.5 billion
    over the 2004 budget; and $1.0 billion to fund continued deployment of
    the new Stryker Brigade Combat Teams, such as the one now serving in
    Iraq.
        We have also requested additional funds to strengthen intelligence,
    including increases for DOD human intelligence (HUMINT) capabilities,
    persistent surveillance, as well as technical analysis and information
    sharing to help us better ``connect the dots.''
        To enhance our communications and intelligence activities, we are
    requesting:
      --$408 million to continue development of the Space Based Radar (SBR)
            which will bring potent and transformational capabilities to
            joint warfighting--the ability to monitor both fixed and mobile
            targets, deep behind enemy lines and over denied areas, in any
            kind of weather. SBR is the only system that can provide such
            capability.
      --$775 million for the Transformational Communications Satellite
            (TSAT) which will provide the joint warfighter with
            unprecedented communication capability. To give you an idea of
            the speed and situational awareness the TSAT will provide,
            consider: transmitting a Global Hawk image over a current
            Milstar II, as we do today, takes over 12 minutes--with TSAT it
            will take less than a second.
      --$600 million for the Joint Tactical Radio System, to provide
            wireless internet capability to enable information exchange
            among joint warfighters.
        The budget also requests $700 million for Joint Unmanned Combat Air
    Systems (J-UCAS)--a program that consolidates all the various unmanned
    combat air vehicle programs, and focuses on developing a common
    operating system.
        The budget requests $14.1 billion for major tactical aircraft
    programs, including: $4.6 billion for the restructured Joint Strike
    Fighter (JSF) program; $4.7 billion to continue acquisition of the F/A-
    22; $3.1 billion to continue procurement of the F/A-18E/F; and $1.7
    billion to support development and procurement of 11 V-22 aircraft.
        The budget requests funds for Navy fleet transformation, including
    $1 billion to continue funding the new CVN-21 aircraft carrier, and
    $1.6 billion to continue development of a family of 21st century
    surface combatants including the DDX destroyer, the littoral combat
    ship, and the CG(X) cruiser.
        We have requested $11.1 billion to support procurement of 9 ships
    in 2005. Fiscal 2005 begins a period of transition and transformation
    for shipbuilding as the last DDG 51 destroyers are built, and the first
    DD(X) destroyer and Littoral Combat Ship are procured. This increased
    commitment is further shown in the average shipbuilding rate for fiscal
    2005-2009 of 9.6 ships per year. This will sustain the current force
    level and significantly add to Navy capabilities.
        In all, the President has requested $75 billion for procurement in
    2005 and $69 billion for Research, Development, Testing and
    Evaluation--funds that are vital to our transformation efforts.
        Another area critical to transformation is joint training. Last
    year, Congress approved funding to establish a new Joint National
    Training Capability (JNTC), an important initiative that will
    fundamentally change the way our Armed Forces train for 21st century
    combat.
        We saw the power of joint war fighting in Operation Iraqi Freedom.
    Our challenge is to bring that kind of joint war fighting experience to
    the rest of the forces, through both live and virtual joint training
    and exercises. Thanks to the funds authorized in the 2004 budget, the
    JNTC's initial operating capability is scheduled to come online in
    October of this year. We have requested $191 million to continue and
    expand the JNTC in 2005.
        With your help, we have put a stop to the past practice of raiding
    investment accounts to pay for the immediate operation and maintenance
    needs. The 2005 request continues that practice. We have requested full
    funding for the military's readiness accounts, providing $140.6 billion
    for Operation and Maintenance (O&M) including $43 billion for training
    and operations. These funds are critical to transformation--because
    they allow us to pay today's urgent bills without robbing the future to
    do so.
        We have also requested funds to support pay and quality of life
    improvements for the troops--including a 3.5 percent military base pay
    raise. We have requested funds in the 2005 budget that will also help
    the Department keep its commitment to eliminate 90 percent of
    inadequate military family housing units by 2007, with complete
    elimination projected for 2009. And we have requested funds to complete
    the elimination of out-of-pocket housing costs for military personnel
    living in private housing. Before 2001, the average service member had
    to absorb over 18 percent of these costs. By the end of fiscal year
    2005, it will be zero. These investments are important to the troops,
    and also to their families, who also serve--and deserve to live in
    decent and affordable housing.
        These improvements properly focus on the serving men and women of
    the armed forces. The recommendations are based on what is believed
    necessary to attract, retain, and motivate the fine young Americans who
    make up our All-Volunteer Force.
        But in recent years, Congress has often added entitlement-like
    changes beyond recommendations such as these, concentrated on those who
    have already served. I applaud the desire to honor this service, but at
    the same time I must point out the fiscal effects of these decisions.
    They are increasing substantially the permanent costs of running the
    Department of Defense. By fiscal year 2009, they cumulatively add over
    $20 billion a year to the defense budget, with only modest effect on
    recruiting and retaining the present generation of personnel. Put
    another way, against a fixed topline for Defense, these decisions will
    affect the Department's future ability to compensate properly those
    then serving, and to procure the new systems and capabilities that are
    so essential to our continued effectiveness.
        I recognize there are legitimate questions, and legitimate
    differences of opinion, about the best way to compensate our forces.
    For this reason, I am appointing an Advisory Committee on Military
    Compensation, to conduct a comprehensive review of military
    compensation and benefits, with a view toward simplifying and improving
    them. Today, we have too many pay categories that serve overlapping
    purposes, or do not provide incentives where they are most needed.
    Before making further major changes, I urge you to allow the Department
    to first develop a comprehensive and integrated set of compensation
    proposals, which we will submit to you next year.
        We are also making progress in getting our facilities replacement
    and recapitalization rate in proper alignment. When we arrived in 2001,
    the Department was replacing its buildings at a totally unacceptable
    average of once every 192 years. Today, we have moved the rate down for
    the third straight year, though it is still too high--to an average of
    107 years. The 2005 budget requests $4.3 billion for facilities
    recapitalization, keeping us on track toward reaching our target rate
    of 67 years by 2008. And we have funded 95 percent of facilities
    maintenance requirements--up from 93 percent in fiscal year 2004.
        The budget also supports our continuing efforts to transform the
    way DOD does business. With the passage of the National Defense
    Authorization Act last year, we now have the needed authority to
    establish a new National Security Personnel System, so we can better
    manage DOD's civilian personnel. Initial implementation will begin next
    year.
        Yet, while progress has been made, the Defense Department still
    remains bogged down by bureaucratic processes of the industrial age,
    not the information age. We are working to change that. To help us do
    so, we have requested funds for a Business Management Modernization
    Program that will help us overhaul DOD management processes and the
    information technology systems that support them.
        One of the most important ways in which Congress can support the
    global war on terrorism is to support three special authorities we have
    requested:
      --(1) $500 million to train and equip military and security forces in
            Iraq, Afghanistan, and friendly nearby regional nations to
            enhance their capability to combat terrorism and support U.S.
            operations in Iraq and Afghanistan. It is critical that this
            authority include security forces because the terrorism threat
            in Iraq is inside its borders. Security forces--not the New
            Iraqi Army--play the primary role in confronting this threat.
      --(2) The Commanders Emergency Response Program ($300 million) to
            enable military leaders in Iraq and Afghanistan to respond to
            urgent humanitarian relief and reconstruction needs. This has
            been a remarkably successful program. With quick turnaround
            projects averaging about $7,000 each, commanders not only help
            people in their operations area, but also gain their support in
            defeating terrorists and building themselves a better future.
      --(3) Increased drawdown authority ($200 million) under the
            Afghanistan Freedom Support Act, to provide additional help for
            the Afghan National Army. During this pivotal year, this
            authority is critical for advancing democracy and stability in
            Afghanistan.
        The President's fiscal year 2005 budget does not request specific
    appropriations for these three authorities, and therefore the
    Department would need to reprogram funding to use them. This
    underscores the importance of Congress increasing the Department's
    General Transfer Authority (GTA) to $4 billion--which would still
    represent just one percent of total DOD funding. Higher General
    Transfer Authority also would give us a greater ability to shift funds
    from less pressing needs to fund must-pay bills and emerging
    requirements. As we have seen in the past three years, such
    requirements have become a constant feature of our military programs.
        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, it is critical that we have the ability to
    shift funds between priorities.
        We also need your continuing support for two initiatives that are
    critical to 21st century transformation: the Global Posture Review, and
    the Base Realignment and Closure (BRAC) Commission round scheduled for
    2005.
        We need BRAC to rationalize our infrastructure with the new defense
    strategy, and to eliminate unneeded bases and facilities that are
    costing the taxpayers billions of dollars to support.
        And we need the global posture review to reposition our forces
    around the world--so they are stationed not simply where the wars of
    the 20th century ended, but are arranged in a way that will allow them
    to deter, and as necessary, defeat potential adversaries that might
    threaten our security in the 21st century.
        These two efforts are inextricably linked.
        It is critical that we move forward with both BRAC and the Global
    Posture Review--so we can rationalize our foreign and domestic force
    posture. We appreciate Congress' decision to authorize a BRAC round in
    2005--and will continue to consult with you as we proceed with the
    global posture review.

                                   CONCLUSION

        Mr. Chairman, the President has asked Congress for a total of
    $401.7 billion for fiscal year 2005--an increase over last year's
    budget. Let there be no doubt: it is a large amount of the taxpayer's
    hard-earned money. Such investments will likely be required for some
    years--because our nation is engaged in a struggle that could well go
    on for a number of years to come.
        Our objective is to ensure that our Armed Forces remain the best
    trained, best equipped fighting force in the world--and that we treat
    the volunteers who make up the force with respect commensurate with
    their service, their sacrifice, and their dedication.
        Their task is not easy: they must fight and win a global war on
    terror that is different from any our nation as fought before. And they
    must do it, while at the same time preparing to fight the wars of 2010
    and beyond--wars which may be as different from today's conflict, as
    the global war on terror is from the conflicts of the 20th century.
        So much is at stake.
        Opportunity and prosperity are not possible without the security
    and stability that our Armed Forces provide.
        The United States can afford whatever is necessary to provide for
    the security of our people and stability in the world. We can continue
    to live as free people because the industriousness and ingenuity of the
    American people have provided the resources to build the most powerful
    and capable Armed Forces in human history--and because we have been
    blessed with the finest young men and women in uniform--volunteers
    all--that the world has known.
        They are courageous, they are selfless, and they are determined.
    They stand between this nation and our adversaries, those who wish to
    visit still further violence on our cities, our homes and our places of
    work. The men and women of the Armed Forces are hunting the enemies of
    freedom down--capturing or killing them in the far corners of the
    world, so they will not kill still more innocent men, women, and
    children here at home.
        We are grateful to them and proud of them. We stand ready to work
    with you to ensure they are treated with the dignity they deserve, and
    the respect they earn every day.
        Thank you, Mr. Chairman. I'd be pleased to respond to questions.

                     STATEMENT OF GENERAL RICHARD B. MYERS

        Senator Stevens. Do you have a statement, General Myers?
        General Myers. Mr. Chairman, I do have a short statement.
        Senator Stevens. Would you pull that mic a little closer to
    you, please?
        General Myers. Mr. Chairman, I do have a short statement.
        Thank you, Mr. Chairman, Senator Inouye, Senator Byrd,
    members of the committee. Once again I thank you for your
    unwavering support of our Armed Forces, and, more specifically,
    our men and women in uniform as they fight this all-important
    war on terrorism.
        Recently, the world's attention has been focused,
    understandably, on the horrendous incidents of detainee abuse
    at Abu Ghraib prison. Let me, once more, restate that these
    acts are absolutely unacceptable, and I assure you that
    commanders at every level are taking prompt and decisive action
    to ensure that the accused receive due process and that the
    guilty are punished.
        One of the United States (U.S.) military's greatest
    strengths comes from the fact that we hold our servicemen and
    women accountable for their actions. I am confident in our
    military justice system, and I'm confident that our commanders
    are doing the right things to prevent further compromise of
    military standards and American values.
        I can also assure you today we are as firm as ever in our
    resolve to help create a free, prosperous, and democratic Iraq.
    We are dealing deliberately and aggressively with the anti-
    coalition forces in Fallujah, as well as Sadr's band of thugs,
    to ensure they do not derail the progress that we're making.
        The truth is, the majority of the Iraqi people want
    democracy in Iraq to succeed, and they're positive about what
    the future holds, thanks, in large part, to the efforts of our
    servicemen and women. And I know our servicemen and women are
    all suffering unfairly with a collective sense of shame over
    what happened at Abu Ghraib.
        I would like to quote a letter from a soldier in the 1st
    Armor Division. He said that every time he eats in the dining
    hall, he sees the prison abuse story on TV, and he says, quote,
    ``Everyone is so angry. It's as if those soldiers hurt us more
    than the enemies here in Iraq have. My battalion has caught car
    bombers, weapons smugglers, and those laying mines to kill us.
    And, every time, we treated them with respect.''
        This is the type of soldier who accurately, in my view,
    represents the values of our military and our Nation. The
    credibility of our troops will be restored day by day as they
    interact with the Iraqi people, and I'm confident that our
    servicemen and women will continue to prove worthy of the trust
    and respect of our Nation and of the world. They are so
    tremendously dedicated. They understand their mission very
    well. And they understand what a huge difference they are
    making. They've seen the enemy unload weapons from ambulances,
    use mosques as operating bases, deliberately put children in
    the line of fire as human shields, and attack innocent
    civilians indiscriminately by firing mortars and grenades at
    marketplaces, yet our servicemen and women are going to
    extraordinary lengths to conduct the most humane operation they
    possibly can. That means at times that we accept greater risk
    in order to avoid civilian casualties.
        I see the same kind of professionalism and compassion in
    Afghanistan, as well. There are now 13 provincial
    reconstruction teams working on security and civil affairs for
    the Afghan people.
        We are making great progress in the war on terrorism with
    the help of more than 90 other nations. Despite Spain and three
    other countries' decisions to depart Iraq, the coalition
    remains very strong.
        Recent events in Fallujah, Najaf, and other parts of
    central Iraq have resulted in the decision to extend some
    20,000 U.S. troops beyond their expected rotation date. We are
    now working to backfill these troops. It's not 100 percent
    clear what the security environment will be after 30 June and
    beyond, but we will continue to support General Abizaid with
    the number of forces that he needs.
        What is clear is that we have not finished our task of
    reviewing all our options for making better use of our
    authorized forces. As Secretary Rumsfeld said, we're looking at
    the stress on our forces from every possible angle. A cold war
    approach to simply counting divisions or ships or fighter wings
    will not help us refine our capabilities to meet the national
    security environment of the future. All solutions need to be
    flexible and, most importantly, transformational.
        As the Secretary said, General Schoomaker's review of how
    the Army structures their combat units, and Admiral Clark's new
    approach to carrier strike group deployments, are two very
    visible examples of this transformation.
        We don't have time today to list all the significant
    transformational issues we're working on, but these initiatives
    span from Guard and Reserve mobilization, to our planning
    processes, to deployable command and control systems. And with
    your support, we will continue to transform our warfighting
    capability.
        Despite the significant stresses on our Armed Forces today,
    readiness remains good. We are keeping a close eye on
    recruiting and retention, and we can say that so far it's going
    very, very well. We have the trained personnel and resources to
    accomplish the military objectives outlined in the Department's
    strategic planning guidance.
        I support the President's request for a $25 billion
    contingency reserve fund to support ongoing operations in the
    war on terrorism. This money is vital to ensuring our troops
    continue to be trained and resourced for the missions they are
    assigned, and to avoid any decrease in readiness or capability
    while they're deployed.

                               PREPARED STATEMENT

        We still have a long way to go in this war, beyond the
    transfer of sovereignty in Iraq and elections in Afghanistan,
    but our troops are making a huge difference every day, and they
    know it. We are truly blessed with amazing men and women to do
    this very, very important work. I thank all of you for your
    continued strong support of our men and women in the Armed
    Forces.
        [The statement follows:]
                 Prepared Statement of General Richard B. Myers

        I am privileged to report to Congress on the state of the United
    States Armed Forces.
        As they were a year ago, our Nation's Soldiers, Sailors, Airmen,
    Marines and Coastguardsmen are currently operating within our borders
    and around the globe with dedication, courage and professionalism,
    alongside our Coalition partners, to accomplish a variety of very
    demanding missions. Global terrorism remains a serious threat, and the
    stakes in the Global War on Terrorism remain high.
        Over the past year, I have told you that with the patience, will,
    and commitment of our Nation we would win the War on Terrorism. The
    support we have received from the Congress has been superb. From
    Congressional visits to deployed personnel, to support for
    transformational warfighting programs, to funding for security and
    stability operations, to improved pay and benefits for our troops, your
    support for our servicemen and women has enabled us to make significant
    progress in the War on Terrorism.
         In spite of the difficulties in Fallujah and the radical Sadr
    militants, we are making progress in Iraq. Saddam Hussein no longer
    terrorizes the Iraqi people or his neighbors; he is in custody awaiting
    justice. The Iraqi people are on their way to establishing a prosperous
    and peaceful future. It won't come easy. Freedom never does, and events
    over the last month have been challenging. The list of important
    accomplishments in every sector--education, medical care, business,
    agriculture, energy, and government, to name a few--is long and
    growing. We have made substantial progress in Afghanistan as well. The
    Constitutional Loya Jirga is an encouraging example of democracy in
    action. In both countries, as in the Horn of Africa and other areas,
    United States and Coalition personnel work together to capture or kill
    terrorists, while at the same time improving infrastructure and
    economic conditions so that peace and freedom can take hold.
        Despite the operational demands on our forces, we remain ready to
    support the President's National Security Strategy and Secretary of
    Defense's draft National Defense Strategy to assure our allies, while
    we dissuade, deter and defeat any adversary. The draft National
    Military Strategy (NMS), developed in consultation with the Service
    Chiefs and Combatant Commanders describes the ways we will conduct
    military operations to protect the United States against external
    attack and aggression, and how we will prevent conflict and surprise
    attack and prevail against adversaries. The strategy requires that we
    possess the forces to defend the U.S. homeland and deter forward in
    four critical regions. If required, we will swiftly defeat the efforts
    of two adversaries in an overlapping timeframe, while having the
    ability to ``win decisively'' in one theater. In addition, because we
    live in a world marked by uncertainty, our forces must also be prepared
    to conduct a limited number of lesser contingencies while maintaining
    sufficient force generation capabilities as a hedge against future
    challenges.
        We appreciate your continued support giving our dedicated personnel
    the warfighting systems and quality of life they deserve. Our challenge
    for the coming year and beyond is to stay the course in the War on
    Terrorism as we continue to transform our Armed Forces to conduct
    future joint operations. We cannot afford to let our recent successes
    cause us to lose focus or lull us into satisfaction with our current
    capabilities. The war is not over, and there is still dangerous work to
    do. To meet this challenge, we continue to focus on three priorities:
    winning the War on Terrorism, enhancing joint warfighting, and
    transforming for the future.

                                WAR ON TERRORISM

        Thirty-two months after the terrorist attacks on September 11,
    defeating global terrorism remains our military's number one priority.
    We will continue to fight this war on many different fronts, because
    terrorism comes in many different forms. The stakes remain high, but
    our resolve remains firm.
        The more experience we gain in this fight, the more we recognize
    that success is dependent on a well-integrated military, interagency
    and coalition effort. This means the coordinated commitment of the
    military, diplomatic, informational, economic, financial, law
    enforcement, and intelligence resources of our Nation--all instruments
    of our national power. On the international level, Coalition military
    and interagency cooperation has been remarkable. In Iraq, Coalition
    forces from over 30 nations are working hard to bring peace and
    stability to a country brutalized for 3 decades. In Afghanistan, 41
    nations are working to secure a democratic government and defeat al
    Qaida and remnants of the Taliban regime, with NATO assuming an
    increasing role in stability and reconstruction efforts.
        We have made significant strides coordinating U.S. Government
    efforts within the interagency and with our Coalition partners. One of
    the ways we have been successful at coordinating interagency efforts is
    through venues such as the Strategy Working Group, the Senior
    Leadership Review Board and the Regional Combating Terrorism
    Strategies. Continued success in this war will depend largely on our
    ability to organize for a sustained effort and coordinate seamlessly
    among all government agencies. An even more demanding task is
    coordinating the efforts of our Coalition partners, now numbering more
    than 90 nations. Coalition contributions have been significant, ranging
    from combat forces, to intelligence, logistics and medical units. They
    have complemented our existing capabilities and eased the requirement
    for current U.S. forces in Iraq and Afghanistan. Coordinating the
    efforts of our Coalition partners is critical to combating the
    remaining terrorist threat.
        The al Qaida network, though damaged, remains resilient, adaptable
    and capable of planning and executing more terrorist acts, such as the
    attacks in Saudi Arabia, Turkey and most recently in Spain. Al Qaida
    continues to receive support and recruit operatives from sympathizers
    around the world. Al Qaida will increasingly focus on Iraq as today's
    jihad. As the network consolidates its efforts in Iraq, the threats of
    attacks will grow. In fact, four al Qaida audiotapes released in 2003
    prominently mentioned Iraq, demonstrating Usama Bin Ladin's emphasis on
    staging attacks there. Ansar al-Islam also remains a formidable threat
    in Iraq, despite damage inflicted by Coalition forces during OIF. Its
    key leadership remains at large and continues to plot attacks against
    US and Coalition interests.
        The ceasefire with anti-Coalition militants in and around Fallujah
    is fragile. The Coalition is responding to attacks by militants who
    frequently fire upon Coalition forces and hide among the populace, and
    who fire from mosques and hospitals. The combatants in this area
    apparently are a combination of former regime elements, Islamic
    extremists, terrorists, foreigners, and other disenchanted Sunnis who
    oppose Coalition efforts to reconstruct Iraq. Delegations of Iraqi
    leaders continue efforts to mediate surrender and the turn-in of
    weapons.
        In the South, Muqtada al-Sadr's armed backers largely have been
    forced by Coalition military pressure to coalesce within the city of An
    Najaf. They continue to engage Coalition forces with mortars and small
    arms, likely from inside or nearby shrines sacred to Shia. Al Sadr
    continues to intimidate the citizens of An Najaf, the majority of whom
    want to see this situation resolved and the shrines protected. Sadr has
    convinced some impressionable Shia youth to fight to legitimize his
    influence in Iraq. However, senior Shia intervention may push Sadr to
    concede to a political settlement.
        Other terrorist groups also pose significant threats to U.S.
    interests, and we believe that some of these terrorist groups have
    developed contingency plans for terrorist attacks against U.S.
    interests abroad. The Revolutionary Armed Forces of Colombia continue
    to conduct terrorist attacks throughout Colombia. They currently hold
    three U.S. hostages captured in early 2003, and directly threaten
    efforts to bring peace, stability and an end to the drug trade in
    Colombia. Jemaah Islamiyah in Southeast Asia is another terrorist group
    that shares al Qaida's goals and methods, adding to the transnational
    terrorist threat. The intelligence that led to recent heightened alert
    levels during the holidays in December show that the threat of a major
    terrorist attack against the U.S. homeland remains very real.
        Disturbingly, terrorist groups continue to show interest in
    developing and using Chemical, Biological, Radiological and Nuclear
    (CBRN) weapons in terrorist attacks. Terrorists have attempted to
    acquire military-grade materials, and interest in CBRN weapons and
    materials by several groups is well documented.
        The Coalition's efforts in the War on Terrorism (WOT) represent the
    significant first step in curtailing WMD proliferation. Our strategy
    for combating WMD calls for the Combatant Commanders to detect, deter,
    deny, counter, and if necessary, interdict WMD and its means of
    delivery. Combating WMD relies on a continuum of interrelated
    activities, employing both defensive and offensive measures, and
    confronting the threat through mutually reinforcing approaches of
    nonproliferation, counterproliferation, and consequence management.
    This multi-tiered and integrated effort will greatly reduce the threat
    of WMD falling into the hands of terrorists. Following the liberation
    of Iraq and the collapse of Saddam Hussein's brutal regime, the
    countries of Iran, and most recently, Libya have been more forthcoming
    about their illegal WMD programs to the international community. This
    should also help to apply international pressure on North Korea and its
    nuclear declarations.
        To counter the potential threat of the proliferation of WMD, the
    President's Proliferation Security Initiative (PSI) is the most far-
    reaching attempt to expand our efforts to impede and interdict the flow
    of weapons of mass destruction, their means of delivery, and related
    materials, between state and non-state actors of proliferation concern.
    It is part of a larger effort to counter proliferation of weapons of
    mass destruction and missile-related technology by interdicting
    shipments of these materials by air, land, and sea. To date, there are
    14 partner nations actively participating in PSI operations and
    exercises. Our goal is to expand PSI participation in order to be
    postured to respond quickly to assist in the interdiction of the
    proliferation trade. United Nations Security Council Resolution 1540,
    adopted by a vote of 15-0 on April 28, 2004, underscores the
    international importance of this issue and enhances the legal basis for
    PSI and related efforts to combat proliferation of WMD, related
    materials, and their delivery systems.

                             OIF AND OEF OPERATIONS

        U.S. Central Command (CENTCOM) is still center-stage in the WOT,
    and doing a magnificent job under difficult circumstances. The Iraqi
    Governing Council unanimously approved its Transitional Administrative
    Law (TAL) on March 8, providing the framework for elections and
    transition to a permanent constitution and an elected, democratic
    government in 2005. On June 30, a fully sovereign Iraqi interim
    government will take office in Iraq. Iraqis recognized the need for a
    security partnership with the Multinational Force (MNF), under unified
    MNF command, in the TAL. The TAL provides that ``consistent with Iraq's
    status as a sovereign state--the Iraqi Armed Forces will be a principle
    partner in the MNF operating in Iraq under unified command'' and that
    this arrangement will last ``until the ratification of a permanent
    constitution and the election of a new government.'' Furthermore,
    United Nations Security Council Resolution 1511 acknowledges the
    responsibility and authority of the MNF for the security of Iraq.
        Since the end of major combat operations, we have made steady
    progress towards meeting our objectives. Essential services are being
    restored, and a political transformation is already underway in Iraq.
    We continue to train and equip Iraqi security forces. It is important
    for the Iraqis to see Iraqi faces on their security forces, with the
    Coalition forces remaining in the background. Although a few countries
    are withdrawing their troops from Iraq, our Coalition remains strong,
    with over 30 other countries directly supporting stability and security
    in Iraq.
        Today, Coalition forces continue to rout out remnants of the former
    regime attempting a desperate last stand. Using intelligence provided
    by Iraqi citizens, we are conducting thousands of raids and patrols per
    week alongside Iraqi security forces. We have seized massive amounts of
    ammunition, and captured or killed 46 of the 55 most wanted former
    Iraqi leaders, as well as thousands of other Saddam loyalists,
    terrorists and criminals. We have captured or killed all of the top 5,
    most notably Saddam Hussein and his sons, Uday and Qusay.
        The Iraq Survey Group is continuing its examination of Saddam's WMD
    programs by interviewing Iraqi citizens, examining physical evidence,
    and analyzing records of the old regime. We know that this process will
    take time and patience, and must be able to stand up to world scrutiny.
        Our Soldiers, Sailors, Airmen, Marines and Coastguardsmen in Iraq
    are now supporting over 203,000 Iraqi security forces. The Iraqi police
    continue to expand their training pipelines in Jordan and Iraq,
    producing hundreds of trained officers each month. We are well on track
    to meet our goal of 31,000 trained Iraqi police by August 2004, and a
    fully trained force of 75,000 by June 2005. The Facilities Protective
    Service has fewer training requirements and has already reached its
    goal of 50,000 members. They have taken over security from Coalition
    Forces at most fixed site locations, such as power lines and parts of
    the oil infrastructure--key targets for sabotage. Our goal for the
    Border Enforcement Force is to have 20,400 members by May 2005. They
    will relieve Coalition forces guarding checkpoints along Iraq's border.
    U.S. military forces continue to vet former members of the Iraqi
    military and other security services for employment in the new Iraqi
    security services, but Iraqis are formally in charge of de-
    Ba'athification efforts and have established guidelines for that
    process. The Emergency Supplemental Appropriations Act for Defense and
    for the Reconstruction of Iraq and Afghanistan 2004 that Congress
    approved last year was instrumental in enabling our planned accelerated
    development of these security forces, and we are grateful for that
    support.
        The New Iraqi Army continues to train additional battalions. Iraq's
    Army needs more than just military skills. They must have a deep-rooted
    sense of professionalism, focused on protecting all Iraqis while
    operating firmly under civilian control. The new army will reflect
    Iraq's religious, regional, and ethnic mix, will be apolitical, and
    indoctrinated in their role of defense and security. We will spend the
    time and resources necessary to ensure the Iraqi Army is a well-trained
    and highly capable force.
        The linchpin of our security efforts during this transition period
    is the Iraqi Civil Defense Corps (ICDC), currently planned to be a
    fully trained force of 40,000 by September 2004. The ICDC is a light
    military force, created to deal with the current stability issues in
    Iraq. As we have done from the beginning, we continue to reassess the
    security environment in Iraq. These security assessments could change
    force goals for the various components of Iraqi security forces. ICDC
    units' performance in recent counter-insurgency operations was mixed.
    In almost every case, the units that performed effectively had
    completed the prescribed training programs, were fully equipped, had a
    history of close integration with Coalition forces, served under
    effective chains of command, and had developed a high level of unit
    cohesion from having worked together for some time. The units that
    failed to perform well generally lacked several of these
    characteristics.
        CJTF-7, the Coalition Police Advisory Training Team and the
    Coalition Military Advisory Training Teams, are all re-evaluating the
    security force training programs in light of the mixed performance over
    the last three weeks, and have identified a number of key enablers that
    should produce a cadre of trained and capable forces. These include
    acceleration of academy training programs, increasing the number of
    coalition advisors embedded into units, increasing the involvement of
    Iraqi security forces in Coalition operations and introducing former
    Iraqi officers as liaison officers to coalition units.
        Equipment shortages remain one of the greatest obstacles to
    establishing capable security forces, but our recent efforts to
    energize the equipment procurement process are beginning to pay off. We
    should see the acceleration of equipment deliveries beginning in May.
    Because of losses associated with operations in early April, we will
    have to establish additional contracts for equipment above those
    already in place to get the Iraqi Security Forces up to the 100 percent
    equipped mark. If the additional contracts are awarded this month, we
    expect most of the forces can cross the 50 percent required equipment
    threshold in July, and 100 percent by September.
        Fiscal year 2004 supplemental funds provided commanders with one of
    the most successful tools in winning the hearts and minds of the Iraqi
    and Afghan people, the Commander's Emergency Response Program (CERP).
    These funds provide commanders and the resourceful young troops they
    lead with the means to respond to urgent humanitarian and stabilization
    and reconstruction needs such as water and sanitation projects,
    irrigation and small-scale agriculture assistance, school house repairs
    and civic cleanup projects. This program is an invaluable tool for
    establishing relationships with the Iraqi and Afghan people, assisting
    in economic development, and creating a safer environment.
        The United Nations and the international community are also playing
    vital roles in the political and economic transformation of Iraq. Over
    70 countries and international organizations including the United
    States, pledged $33 billion at the Madrid Donors Conference. U.N.
    Security Council Resolution 1511 called upon Iraqis, initially through
    the Iraqi Governing Council, to determine the course and speed of their
    political reformation. In response, the Iraqi Governing Council has
    submitted its plan and timetable for selecting a transitional National
    Assembly and interim government, drafting a constitution and holding
    elections. It is an ambitious schedule, but one that they can
    accomplish with our help.
        In addition to security and political progress, we continue to help
    Iraq rebuild the infrastructure required for economic progress and a
    stable democracy. The Coalition Provisional Authority (CPA) and Gulf
    Region Division-Restore Iraqi Electricity (GRD-RIE) are managing a
    comprehensive maintenance and upgrade program designed to improve power
    generation, transmission, efficiency and capacity to meet the future
    needs of the Iraqi people. Through the coordinated efforts of the Army
    Corps of Engineers and the Iraqi Ministry of Electricity, we met the
    initial October 2003 goal of 4,400 MW of peak power generation. The
    next goal is 6,000 MW of power by June 1, 2004. In order to meet this
    goal the CPA developed the Power Increase Plan to offset recent system
    failures from severe weather and continuing sabotage and looting. This
    plan increases electrical power generation through an increase of
    generator rehabilitation and maintenance projects, the increase of new
    power generators to the national power grid, increasing electrical
    power imports from other nations, and improving system-wide power
    transmission and distribution. Other progress continues throughout Iraq
    in potable drinking water projects, supplying hospitals with medical
    supplies, providing school supplies for Iraqi school children and
    rebuilding classrooms. Living conditions are improving everyday in
    Iraq, as many of you have seen for yourselves on recent trips to Iraq.
        In Afghanistan, our military strategy combines both combat and
    stability operations. U.S. and Coalition forces are conducting combat
    operations to rid Afghanistan of al Qaida and Taliban remnants, and
    stability operations to assist in building Afghan security
    institutions, governing bodies, and economic prosperity. In January,
    the interim Afghan government held their first Constitutional Loya
    Jirga, approving a new constitution for Afghanistan. In September,
    Afghanistan will hold its first presidential and parliamentary
    elections in over three decades. This is extraordinary progress, by any
    measure.
        Security and stability operations are being conducted by 13
    Provincial Reconstruction Teams (PRTs) operating throughout
    Afghanistan, with at least 5 more PRTs planned for this year. Coalition
    and NATO PRT representatives are making great strides improving the
    quality of life for the Afghan people by building schools, clinics,
    wells, roads and other community infrastructure projects. Reopening the
    Kabul-to-Kandahar road was a major success. Our efforts have increased
    security and stability in Afghanistan.
        In August 2003, NATO assumed responsibility for the International
    Security Assistance Force (ISAF) in Afghanistan. In October 2003 the
    United Nations Security Council passed a resolution extending ISAF's
    mission in Afghanistan for one year, and authorizing ISAF to operate
    outside Kabul and its environs. In February 2004, a Canadian officer
    assumed command of the NATO ISAF headquarters from the German
    commander. NATO's role in Afghanistan is expanding. Germany now leads
    the NATO PRT at Konduz. NATO is planning future ISAF expansion across
    northern and western Afghanistan.
        The Afghan National Army (ANA), now numbering over 8,000 trained
    personnel, is at the forefront of efforts to improve security and
    stability and establish a strong national identity among the Afghan
    people. To date the ANA has performed well, fighting side-by-side with
    United States and Coalition forces during recent successful combat
    operations to capture or kill Taliban, Hezb-I-Islami-Gulbiddin, and al
    Qaida elements. In January 2004 training capacity was increased to
    graduate 10,800 ANA trained personnel per year. Most of the funding
    provided in the Afghanistan portion of the fiscal year 2004 Emergency
    Supplemental has strengthened ANA efforts, including the acceleration
    of training and improved retention and recruitment.
        Congress has demonstrated its commitment to the future of
    Afghanistan, but there is still much more the international community
    could and should contribute to the reconstruction of Afghanistan. The
    Berlin Donor's Conference was a significant success with $4.5 billion
    pledged for this fiscal year and $8.2 billion for the next 3 years. The
    Afghan government, with the help of the U.S. government, is seeking
    more donations for several infrastructure projects such as a new
    Ministry of Defense headquarters, a hospital in Kabul, and a military
    academy, as well as donations of certain equipment, weapons and
    ammunition.
        In neighboring Pakistan, working closely with President Musharraf,
    we have been able to increase coordination among United States,
    Coalition, Afghan and Pakistani forces along the Pakistan-Afghanistan
    border. The Pakistani government has taken some initiatives to increase
    their military presence on the border, such as manned outposts, regular
    patrols and security barriers. From time to time they have aggressively
    confronted Taliban and al Qaida supporters in the areas of the Pakistan
    Federally Administered Tribal Areas and suffered casualties in the
    process. The Tripartite Commission consisting of United States, Afghan
    and Pakistan representatives concluded its seventh session in mid-
    April. Among the many accomplishments of the Tripartite Commission has
    been the establishment of a sub-committee to investigate means to
    prevent cross-border conflict. United States/Pakistani military
    cooperation continues to improve, and we are helping Pakistan identify
    equipment requirements for their counter-terrorism efforts.
        Operations in the Horn of Africa remain an essential part of the
    WOT. The Joint Task Force Horn of Africa at Camp Lemonier, Djibouti is
    conducting counter-terrorist and civil affairs operations in Eastern
    Africa. Although these operations have impacted al Qaida's influence in
    the region, a continued military presence is essential to stop the
    movement of transnational terrorists and demonstrating to the region
    our resolve to wage the WOT in Africa.
        In support of OEF--Philippines, U.S. Pacific Command (PACOM) used
    congressionally approved funds this past year to continue counter-
    terrorism training for the Armed Forces of the Philippines. A small
    contingent of U.S. military personnel remains in the southern
    Philippines managing these efforts and other humanitarian assistance
    projects.

                           OTHER OVERSEAS OPERATIONS

        U.S. European Command (EUCOM), in accordance with SECDEF guidance,
    has developed a concept for the reduction of U.S. forces supporting
    U.S. Stability Forces in Bosnia-Herzegovina. USEUCOM is closely
    monitoring the stability of the Province of Kosovo, given recent
    violence, to determine required U.S. force levels to support the U.S.
    Kosovo Force. Any force reductions will be done in concert with the
    North Atlantic Council's Periodic Mission Review recommendation for the
    Balkans.
        When EUCOM concludes the Georgia Train and Equip Program in May
    2004, they will meet their objective of improving Georgia's ability to
    confront transnational terrorism operating within Georgia. Training is
    being provided for two staffs, four battalions and one mechanized/armor
    company team. To build on this success and momentum, EUCOM is reviewing
    a possible follow-on Georgia Capabilities Enhancement Program to
    sustain and improve the Georgian military's newly acquired
    capabilities, and demonstrate a continued U.S. commitment to the
    Georgian Armed Forces' development.
        Maritime Interdiction Operations took on a new global focus last
    year, beyond the historical CENTCOM and EUCOM missions, when the
    President approved Expanded Maritime Interception Operations to
    interdict terrorists and their resources globally. Expanded Maritime
    Interception Operations are now significant mission areas for every
    deployed battle group, especially along maritime transit lanes and
    choke points. Results from these maritime operations, such as in the
    Mediterranean Sea, have produced lower insurance premiums in the
    shipping industry, considerably less illegal immigration in countries
    such as Spain, Italy, and Greece, and a reduction in crime at sea.
    Maritime Interdiction Operations are a truly international effort.
    German and Spanish led multi-national naval forces patrol the CENTCOM
    area of responsibility, and this past year Coalition naval forces have
    been responsible for boarding over thirty ships within EUCOM's area of
    responsibility.
        U.S. Southern Command (SOUTHCOM) continues to support counter-
    narcotics trafficking and counter-terrorism efforts in the Caribbean
    and Central and South America. They are assisting the Colombian
    military in its fight against designated terrorist organizations by
    providing military advice, training, and equipment with an emphasis on
    the pursuit of narco-terrorist leadership, counter-narcotics tactics,
    and security for major infrastructure such as the Cano Limon pipeline.
    SOUTHCOM supported the formation of the Colombian Army Special
    Operations Command and is continuing its efforts to train the Commando
    Battalion, and a Ranger-type unit. Training was successfully completed
    for the first Colombian Commando Battalion, and training has begun for
    the second battalion. The Colombian military has been very successful
    over the past year in their fight against narco-terrorism. The Tri-
    Border Area between Argentina, Brazil and Paraguay is another focal
    point for drug and arms trafficking, money laundering, document fraud
    and Islamic terrorist-supported activities in South America. U.S.-
    sponsored multilateral exercises are promoting security, improving
    effective border control, and denying terrorist groups such as
    Hizballah, Hamas and other Middle Eastern terrorist safe havens,
    restricting their ability to operate.
        SOUTHCOM is also providing nearly 2,000 military personnel to
    manage detainee operations at Guantanamo Bay, Cuba. We operate in close
    coordination with several U.S. agencies. We are constantly reviewing
    the status of each detainee, and to date have transferred 128 of the
    detainees who were determined to be of no intelligence or law
    enforcement value, or no threat to the United States or its interests,
    back to their countries of origin for release. 18 detainees have been
    transferred back to their country of origin, under an agreement for
    continued detention by that country. More await similar agreements to
    allow for transfer or continued detention. A number of detainees have
    been assessed as high intelligence and or law enforcement value, or
    pose a significant threat to U.S. interests. These detainees will
    remain for further exploitation. Other cases are being considered for
    referral to the Military Commission, although no one has been referred
    to date. Information gleaned from detainees, many of whom continue to
    make threats against Americans, has already helped prevent further
    terrorist attacks against the United States and our allies.
    Furthermore, continued detention of those who pose a threat to U.S.
    interests prevents those enemy combatants from returning to the
    battlefield.
        SOUTHCOM is also conducting security and stability operations in
    Haiti following the departure of President Aristide, with a
    Multinational Interim Force (MIF) of nearly 4,000 personnel. The
    presence of the MIF has improved the security and humanitarian
    situation in Haiti. The MIF is composed of approximately 2,000 U.S.
    military personnel with the remainder from Canada, Chile and France.
    Under U.N. Security Council Resolution 1542, adopted unanimously on
    April 30, SOUTHCOM and the Multinational Force will transition the
    current Haiti operation to a new United Nations Stabilization Mission
    in Haiti on or about June 1, 2004. The United Nations has authorized a
    force of 6,700 troops and 1,600 police.
        In accordance with the Unified Command Plan 2002 Change 2, on
    January 1, 2004 U.S. Strategic Command (STRATCOM) reported significant
    progress in all of their new mission areas: global strike; missile
    defense; DOD information operations; and command, control,
    communications, computers, intelligence, surveillance and
    reconnaissance missions. Further, they are on schedule to achieve full
    operational capability in each of the newly assigned mission areas this
    year. SECDEF has already approved the Information Operations Roadmap,
    which has 57 wide-ranging recommendations that aid Combatant Commanders
    in planning and executing fully integrated information operations.
        As we become more reliant upon information to conduct operations,
    the defense of our network is paramount. This requires properly trained
    people, common operating standards, and a well-stocked arsenal of
    Information Assurance tools. We are working diligently to centralize
    network operations and defense, and to formalize information sharing
    policy, guidance and procedures. These steps, along with our
    cryptographic modernization plan, will safeguard our vital information.
        We are formalizing the role of U.S. Special Operations Command
    (SOCOM) in the War on Terrorism. In the near future, we will be
    recommending a change to the Unified Command Plan assigning SOCOM
    specific responsibility to coordinate DOD actions against terrorist
    networks. In March, SOCOM's trans-regional psychological operations
    program was approved to unify existing programs, streamline approval
    authorities and synchronize psychological operations across regional
    boundaries in support of the War on Terrorism. These changes will
    provide SOCOM and all of DOD improved focus in our global effort to
    combat terrorism.

                      CURRENT HOMELAND DEFENSE OPERATIONS

        Last year, U.S. Northern Command (NORTHCOM) reached full
    operational capability in their mission to deter, prevent and defeat
    threats and aggression aimed at the United States and its territories.
    Upon SECDEF approval, NORTHCOM can now deploy Quick Response Forces
    (company-sized units) and Rapid Response Forces (battalion-sized
    forces) to support time-sensitive missions such as defense of critical
    infrastructures or consequence management in support of the Department
    of Homeland Security (DHS). To improve interagency collaboration, DOD
    has been working with DHS to develop and implement the National
    Response Plan, a national-level, all-hazards plan that will integrate
    the current family of Federal Domestic Emergency Response Plans into a
    single plan.
        The Joint Staff has developed a CONPLAN for consequence management
    operations, and NORTHCOM and PACOM have developed supporting plans.
    NORTHCOM's Joint Task Force Civil Support maintains strong interagency
    relationships to integrate command and control of DOD forces with
    federal agencies to manage the mitigation of Chemical, Biological,
    Radiological and Nuclear and High-Yield Explosive (CBRNE) incidents.
    This past summer, DOD, Nevada National Guard and Reserve units, FEMA,
    27 other Federal agencies, and Nevada State and local agencies
    participated in a consequence management exercise in Nevada called
    DETERMINED PROMISE 2003. I was thoroughly impressed by the coordination
    and cooperation among active and reserve component forces, and Federal,
    State and local authorities. We are conducting similar exercises across
    the country.
        In regards to anti-terrorism and force protection measures, the
    Joint Staff is working to ensure that Combatant Commanders at home and
    abroad have the resources to mitigate threats and respond to emergent
    requirements through the Combating Terrorism Readiness Initiatives
    Fund. My staff is involved in developing and updating anti-terrorism
    standards and policies to reflect current worldwide operations and
    lessons learned so that we can address any vulnerabilities. We
    coordinate with various agencies in the areas of training, planning,
    operations and intelligence sharing, all essential for developing sound
    anti-terrorism policies.
        In an effort to improve the security of U.S. military installations
    and personnel around the world, the Joint Staff has created the
    Antiterrorism Enterprise Portal, an evolving web-based portal that
    aggregates the resources and programs required to support the DOD
    Antiterrorism Program. This portal is fast becoming DOD's one-stop
    location for antiterrorism/force protection information.
        A program that complements this portal capability is the Joint
    Protection Enterprise Network (JPEN). Operated by NORTHCOM, this
    network provides the means to share unclassified force protection
    information rapidly between military installations in the Continental
    United States, increasing their situational awareness and security
    significantly. Although currently operating only on military
    installations, JPEN has the potential to be expanded to share terrorist
    information with Federal, State and local agencies as well.
        The WOT requires collecting relevant data and turning it into
    knowledge that will enable us to detect and preempt the plans of an
    elusive, skilled enemy dispersed across the globe. Although many
    obstacles remain, we are making significant progress in the area of
    information sharing. The Joint Intelligence Task Force for Combating
    Terrorism (JITF-CT) at DIA is a prime example of effective intelligence
    cooperation in the WOT. In the area of counterterrorism, we are making
    significant progress toward transparency and full information sharing.
    JITF-CT has experts from 12 intelligence and law enforcement
    organizations, and JITF-CT personnel are embedded in 15 other
    organizations, including some forward deployed personnel.

                        READINESS FOR FUTURE OPERATIONS

        Our Nation's number one military asset remains the brave men and
    women serving in our Armed Forces. This past year, they demonstrated to
    the world their dedication, perseverance and compassion as they
    liberated the Iraqi people and worked to bring peace and prosperity to
    the region. The Administration, Congress and DOD have made raising our
    military's standard of living a top priority. The 2004 budget provided
    an average military pay raise of 4.15 percent and targeted increases of
    up to 6.5 percent for some enlisted personnel. The 2005 budget's
    proposed reduction of out-of-pocket housing expenses from 3.5 percent
    to 0 is a sound investment, as are future pay increases based on the
    Employment Cost Index plus .5 percent.
        DOD has a focus group that continues to look at programs to enhance
    the combat effectiveness and morale of service and family members
    associated with OIF and OEF. Areas where we have made significant
    progress are Rest and Recuperation Leave, danger area benefits to
    include incentive options for extended tours of duty in Iraq and
    Afghanistan, exchanges, childcare and communications initiatives.
        All Services generally met or exceeded active duty and reserve
    component recruiting and retention goals in both fiscal years 2002 and
    2003 and are currently on target to meet fiscal year 2004 goals.
    However, recruiting and retention of both active and reserve personnel
    will continue to require attention and continued investment as we face
    the challenges of an improving economy and the high operations tempo
    associated with the war. I view all of the Quality of Life issues as
    inseparable from overall combat readiness, and we greatly appreciate
    Congressional support for all of these initiatives.
        The overall readiness of our armed forces--whether forward
    deployed, operating in support of contingency operations, or employed
    in homeland defense--remains good. Our forces are the world's best
    trained and, possess the requisite personnel, equipment, and resources
    necessary to accomplish the military objectives outlined in the
    Strategic Planning Guidance. Challenges do exist, especially with
    regard to ground forces in Iraq. By mid-May, we will have completed the
    movement of personnel and equipment to Iraq that rivals any such
    military deployment in history. Coincident with this deployment of
    forces is a corresponding redeployment back to home bases of our
    service personnel after one year of service in Iraq. Some 20,000
    personnel, mostly members of two Brigades of the 1st Armored Division,
    the 2nd Light Cavalry Regiment and associated Combat Support and Combat
    Service Support units, have been retained in theater past 365 days
    because of the present security situation in central Iraq. We will
    continue to examine force levels and size our combat forces
    appropriately as the security situation dictates in both Iraq and
    Afghanistan.
        We continue to rely heavily on our Reserve and Guard personnel, who
    are playing critical roles in Homeland Defense, and serving with
    distinction around the world in the War on Terrorism. Some missions
    like the ones in Bosnia-Herzegovina and Kosovo are almost exclusively
    made up of Reserve and Guard units, and they are doing a magnificent
    job. We are well aware of the strains on members, their families, and
    their employers, and continuously seek better ways to support them.
        There are several initiatives underway, collectively by DOD, the
    Services, Combatant Commands, and the Joint Staff to reform the
    mobilization process and to relieve the stress on the force. USJFCOM,
    in conjunction with the Services, is leading the mobilization reform
    effort by evaluating policy changes and identifying other solutions to
    streamline the mobilization/demobilization process, and preliminary
    recommendations are expected in early 2004. Two Operational
    Availability sub-studies were conducted last year and identified the
    Active Component/Reserve Component Mix and Low Density/High Demand
    assets as two areas of immediate concern to relieve stress on the
    Reserve Component forces. As an example, the Army has already begun
    converting some Reserve Component artillery forces into Military Police
    forces to meet one of the expected high demand roles of the foreseeable
    future. This, and other ongoing rebalancing efforts will ensure that
    active and reserve forces continue to complement each other. The
    Services are actively engaged in reviewing how much of a given
    capability they need for this new security environment, and which
    capabilities belong in each component. Other key DOD areas of concern
    are reducing the need for involuntary mobilization of the Reserve
    Component early on in rapid response operations, establishing a more
    rigorous process for reviewing joint force requirements, and ensuring
    efficient use of mobilized Reserve Component personnel. A comprehensive
    Rebalancing the Force Report by ASD (RA) will summarize these efforts,
    while a study by ASD (HD) will define Reserve Component requirements
    for Homeland Defense.
        U.S. Armed Forces are capable of achieving all assigned objectives
    in the draft National Military Strategy. However, current stresses on
    the force remain considerable. The increased demands of the War on
    Terrorism, sustaining post-conflict operations in Iraq and Afghanistan,
    and other global commitments are unlikely to change significantly in
    the near-term. Moreover, while committed globally, our Armed Forces
    must continue to defend the homeland, reconstitute forces returning
    from contingency operations, transform to meet future challenges,
    strengthen joint and combined warfighting capabilities, and maintain
    readiness. Today, given these commitments and requirements, we are
    carefully managing the risk in executing an additional major combat
    operation.
        When units return home from combat operations, they must undergo a
    reconstitution process, which generally means a drop in their
    readiness. However, this does not necessarily indicate that a unit is
    either unavailable for or incapable of executing part or all of their
    assigned wartime missions. We have initiated new measures in the
    current readiness reporting system to identify Service and combatant
    command requirements, determine the scope of required reset actions,
    and develop appropriate solutions to mitigate shortfalls and manage
    risk. Our workload remains high, but we remain prepared to accomplish
    those missions assigned to us.
        Army units returning from OIF I/OEF require focused maintenance
    efforts to return them to pre-hostility readiness levels, while
    continuing to meet Combatant Commanders' maintenance requirements. The
    Army's goal is to return OIF I/OEF active duty units to pre-deployment
    readiness within 6 months and reserves within 1 year after return to
    home station. However, some critical aviation systems may require
    additional time in order to complete depot level repairs. Funding was
    programmed from the 2004 Supplemental for these organizational and
    depot level maintenance requirements. Army Materiel Command is the lead
    agency for developing a plan to repair major equipment items from OIF
    I/OEF. The Army has developed repair estimates for all OIF I units. The
    workload consists of approximately 1,000 aviation systems, 124,400
    communications & electronics systems, 5,700 combat/tracked vehicles,
    45,700 wheeled vehicles, 1,400 missile systems, 6 Patriot battalions,
    and 232,200 various other systems are included in this repair plan. As
    OIF II and beyond maintenance requirements are further defined, DOD
    will refine estimates and update costs.
        Combatant Commanders and the Services identified preferred
    munitions as one of their risk areas of concern via periodic readiness
    reporting. Supplemental funding, as well as augmented annual budget
    requests, has allowed us to meet our requirement for Joint Direct
    Attack Munitions and laser-guided bomb kit production. In the near
    term, we are focused on improving how we determine our munitions
    requirements. Over the long-term, we plan to field improved guided
    munitions systems that build on our already superb precision-delivery
    capabilities.
        Our military training areas are facing competition from population
    growth, environmental laws, and civilian demands for land, sea, and
    airspace. The Services are proud of their success in protecting the
    environment, endangered species and cultural resources. We are grateful
    to Congress for their assistance in the fiscal year 2004 Defense
    Authorization Act, which precluded designating certain DOD lands as
    critical habitat, and preserved valuable Navy training while ensuring
    protection of marine mammal species. Having the world's most
    sophisticated weapons systems and simulators cannot substitute for our
    most important military training activities, air, land and sea maneuver
    and live-fire training. Some installations, ranges, and training areas
    are losing critical military value because encroachment is impairing
    their capability to provide useful readiness and operational support.
    We will continue to seek Congressional support that balances
    environmental concerns and readiness.
        Our Nuclear Readiness continues to evolve. In December 2001, the
    Nuclear Posture Review established a New Triad composed of Offensive
    Strike capabilities (both nuclear and non-nuclear), Defenses (active
    and passive) and Responsive Infrastructure in order to respond to a
    wide range of contingencies. DOD is in the midst of a Strategic
    Capabilities Assessment to assess the progress in fielding the New
    Triad and determine the number and types of forces to meet the Moscow
    Treaty commitment of reductions of 1,700 to 2,200 operationally
    deployed strategic nuclear warheads by 2012.
        We continue our efforts to ensure we can operate effectively in a
    CBRN environment, since our potential adversaries, both nation states
    and terrorists, seek to acquire and develop weapons of mass
    destruction, including biological warfare agents. Vaccinations
    represent an important countermeasure against biological threats and
    provide our military personnel with the best available protective
    measures. To date, approximately 695,000 military personnel have been
    vaccinated against anthrax and more than 520,000 military personnel
    have received smallpox vaccinations. The anthrax and smallpox
    vaccination programs are very successful, and it is imperative to
    develop effective countermeasures against other biological threats to
    protect our warfighters.
        While our warfighting team has always included contractors, their
    involvement is increasing. The Joint Staff is leading a joint group to
    develop overarching DOD policy and procedures for management of
    contractor personnel during contingency operations.
        We must also reexamine our ability to get to the fight. The
    Mobility Requirements Study 2005, completed in 2000, is the current
    baseline mobility requirements document. DOD is actively engaged in
    conducting a new full-scale mobility study that reflects our current
    defense strategy and incorporates lessons learned from OEF and OIF to
    further clarify strategic lift requirements. The goal is to complete a
    new Mobility Capabilities Study by March 2005, in time to influence
    preparation of POM-08 and the Quadrennial Defense Review.
        Sustaining our overseas presence, responding to complex
    emergencies, prosecuting the global war on terrorism, and conducting
    operations far from our shores are only possible if our ships and
    aircraft are able to make unencumbered use of the sea and air lines of
    communication. Our naval and air forces must be able to take advantage
    of the customary, established navigational rights that the Law of the
    Sea Convention codifies. We strongly support U.S. accession to the
    Convention.
        Although C-17 production is not planned to terminate until fiscal
    year 2008, portions of C-17 production lines will begin to close in
    fiscal year 2006. The Air Force and DOD are studying the benefits and
    risks (including financial and war fighting) of continuing or
    terminating the C-17 production lines, and plan to complete this
    assessment in time to inform the fiscal year 2006 POM.
        The significant age of our KC-135 fleet and the importance of air-
    refueling capabilities dictate modernization of our aerial-refueling
    fleet. Based on the results of ongoing investigations and studies, the
    Air Force will recommend a cost-effective strategy for acquiring a
    suitable replacement for the KC-135 fleet to meet joint warfighting
    requirements to support our National Security Strategy.
        The F-35 Joint Strike Fighter (JSF) will be a giant leap over
    existing attack/fighter capabilities. JSF is in the third year of an
    11-year development program, and we have seen some design challenges.
    The current design challenge for all three variants is weight, which
    impacts performance requirements, particularly for the Short Takeoff
    and Vertical Landing variant. Design teams are working diligently to
    solve this issue, and we have moved the first planned production
    procurement to the right one year, and added extra money to the
    development. The weight issue is within normal parameters of design
    fluctuation, and this issue will be worked out through the development
    and design process.
        Protection of our troops remains a top priority. Interceptor Body
    Armor (IBA) was in the initial fielding phase at the start of OIF. The
    DOD has been aggressively managing this critical item, and accelerated
    fielding and production rates when CENTCOM identified the need due to
    the threat situation. IBA consists of an Outer Tactical Vest (OTV) and
    a set of Small Arms Protective Inserts (SAPI). Currently, there is
    enough IBA (with SAPI) in theater to meet the CENTCOM military and
    civilian requirements, for their entire area of operations, including
    Iraq, Kuwait, Afghanistan and the Horn of Africa. We will continue to
    work diligently to provide the best protective equipment for our
    servicemen and women and DOD civilians.
        The Up Armored version of the High Mobility Multi-Purpose Wheeled
    Vehicle (HMMVV) has proven to be effective at protecting our soldiers
    against mines, improvised explosive devices (IED) and direct fire
    weapons. Currently there is a shortfall in Iraq and worldwide. To fill
    this shortfall, in the near term, the Joint Staff, the Services and the
    Combatant Commanders are conducting an aggressive campaign to
    redistribute worldwide inventories of UP Armored HMMVVs to Iraq. In the
    longer-term, Congress' Emergency Supplemental and reprogramming have
    provided funding to accelerate production of Up Armored HMMVVs to meet
    CENTCOM requirements by October 2004.
        OIF reaffirmed how critical the deployment and distribution process
    is to joint warfare. The Joint Staff is working with DOD and the
    Service logistics experts to develop an integrated end-to-end
    deployment and distribution process that is responsive to rapid
    projection of forces, the delivery and handoff of joint forces, and
    worldwide sustainment in support of the Joint Forces Commander.
        During the fiscal year 2004 budget cycle, Congress voiced concern
    over the Department's overseas basing plans. Since then, our global
    posture strategy has matured. We are now in the process of detailed
    consultation with our allies and members of Congress. The overseas
    portion of the fiscal year 2005 Military Construction budget submission
    includes projects at enduring locations. These projects reflect our
    Combatant Commanders' most pressing base and infrastructure needs. I
    urge Congress to support our Combatant Commanders and fund the overseas
    MILCON projects submitted in the fiscal year 2005 budget request. These
    projects contribute directly to our readiness and the quality of life
    our personnel deserve.

                               JOINT WARFIGHTING

        Protecting the United States, preventing future conflicts, and
    prevailing against adversaries require our military to sustain and
    extend its qualitative advantage against a very diverse set of threats
    and adversary capabilities. Maintaining our qualitative advantage
    begins with improving education programs across the Services. We must
    also adapt and transform organizations and functions to eliminate gaps
    and seams within and between combatant commands, agencies at all levels
    of government, and potential coalition partners. Information sharing is
    at the forefront of this effort.
        Recent operations in Afghanistan, Iraq, the Philippines, and Africa
    have demonstrated the impact timely sharing of intelligence has on
    planning and executing military operations. Since this is a global war
    requiring an international effort, we must also improve coalition
    command and control capabilities, and consolidate the numerous networks
    that exist today. These disparate networks hinder our ability to plan
    in a collaborative environment and exercise timely and effective
    command and control with our multinational partners.
        We must also review policies and implement technology that
    safeguard our vital sensitive information while ensuring critical
    operational information is shared with all those who fight beside us.
    JFCOM has been tasked to take the lead in identifying specific
    multinational information sharing requirements and recommending policy
    changes. Our goal is to establish a multinational family of systems
    with common standards as part of the Global Information Grid enterprise
    services. I view this as a top priority and ask for Congressional
    support--information sharing with our allies is critical to winning the
    War on Terrorism.
        During OIF, our military forces benefited from unprecedented
    situational awareness through a common operational picture. In
    particular, one new system, Blue Force Tracker, was critical to the
    success of our forces as they sped towards Baghdad. Some of the 3rd
    Infantry Division, V Corps, and I MEF vehicles were equipped with
    transponders that automatically reported their positions as they
    maneuvered across the battlefield--greatly improving situational
    awareness for our battlefield commanders, and reducing the potential
    for blue-on-blue engagements. Despite significant improvements in joint
    combat identification, challenges remain to reduce incidents of
    friendly fire, and maximize the synergy of combined arms to provide all
    front-line tactical units with friendly and threat information during
    decisive engagements. To address these challenges, JFCOM has the lead
    in the comprehensive effort to improve Joint Battle Management Command
    and Control, which includes the integration of Common Operational and
    Tactical Pictures, Combat Identification, and Situational Awareness
    across the force.
        We are taking command and control lessons learned from OIF like the
    capability to track Blue Forces, and running them through the Joint
    Capabilities Integration and Development System process to help shape
    future systems requirements. The objective is to ensure all of the
    critical considerations of Doctrine, Organization, Training, Material,
    Leadership and Education, Personnel, and Facilities (DOTMLPF) are
    employed in an approach that synchronizes material and non-material
    solutions.
        We are also improving our military war planning process. The Joint
    Staff has developed an Adaptive Planning process--whose key concepts
    are agility and speed--to reduce the time to develop and update war
    plans, while adding flexibility and adaptability to respond to the
    rapid changes in the global strategic security environment. The goal is
    to provide the President and SECDEF the best options possible. We have
    also been developing a collaborative campaign-planning tool for crisis
    action planning and execution. These tools should allow commanders the
    ability to assess multiple courses of action, rapidly compressing plan
    development time while increasing plan flexibility.
        Our warfighting effectiveness is also enhanced by our Joint
    Exercise Program, which provides Combatant Commanders with the means to
    train battle staffs and forces in joint and combined operations,
    evaluate their war plans, and execute security cooperation plans with
    our allies and Coalition partners. In order to improve joint training
    opportunities, JFCOM is developing a Joint National Training Capability
    (JNTC), which will achieve Initial Operational Capability in October
    2004. JNTC will combine live and virtual play at multiple locations.
    The goal is to provide realistic joint combat training against an
    adaptive and credible opposing force, with common ground truths, and
    high quality exercise feedback.
        Strategic airlift is available to exercises only on an as-available
    basis, since it is prioritized for operational needs first. Providing
    the personnel and assets to accomplish meaningful joint training during
    this period of high OPTEMPO has also been challenging. To balance these
    competing requirements, the Combatant Commanders are reviewing their
    fiscal year 2004 exercise programs with a view to canceling, downsizing
    or postponing exercises. We must continue to balance operational and
    exercise requirements against OP/PERSTEMPO and available lift.
        Prior to combat operations in Iraq, we established a process for
    adapting OIF lessons learned for future operations as rapidly as
    possible. JFCOM has the lead role in turning identified operational
    level lessons learned into required capabilities through the Joint
    Capabilities Integration and Development System. After completing the
    OIF Strategic and Operational Lessons Learned reports, we are following
    up with a specific report to the Congressional Defense Committees, the
    Select Committee on Intelligence of the Senate, and the Permanent
    Select Committee on Intelligence of the House of Representatives. OIF
    Strategic Lessons Learned require additional commitment at the
    national-strategic level, including an improved deployment process,
    redistributing specialties between the Active and Reserve Components,
    Reserve Component readiness and mobilization, and improving the
    planning and transition to post conflict operations.
        Planning and transition to post conflict stability operations
    require significant adjustments in how we plan, train, organize, and
    equip our forces. We can expect future adversaries to attempt to offset
    U.S. military strengths through asymmetric means, to include terrorist
    insurgency, as combat operations transition to post conflict
    operations. The lessons learned process continues during stability
    operations in Afghanistan and Iraq.
          considerations and recommendations for goldwater-nichols act
        For the past 18 years, joint operations have been improving under
    the provisions of the Goldwater-Nichols Act. The act strengthened
    civilian control of the military and facilitated better military advice
    to the President, SECDEF, NSC and Congress. Today, the Armed Forces are
    involved in a worldwide fight against terrorism, well beyond anything
    envisioned by the framers of Goldwater-Nichols. Now, it is time to
    consider new ideas for improving the effectiveness and efficiency of
    the military instrument of power in today's new security environment.
        The WOT and other recent military operations have demonstrated the
    need for improved interagency cooperation, integration and execution of
    National Security Council decisions. We also need to improve how we
    coordinate the efforts of international, regional and non-governmental
    organizations. I fully support initiatives to formalize a mechanism
    that creates effective lines of authority and provides adequate
    resources to execute interagency operations. For example, designating
    the Chairman of the Joint Chiefs of Staff as the principal military
    advisor to the Homeland Security Council would improve homeland defense
    and prosecution of the WOT beyond our borders.
        As new defense reform initiatives are considered, the Chairman must
    retain a dedicated Joint Staff, with expertise across the full range of
    military issues, to assist in formulating quality, independent military
    advice to the President, the National Security Council, and the
    Secretary of Defense.
        Joint Officer Management codified in the 1986 Goldwater-Nichols
    legislation was based on the threats and force structure evident late
    in the Cold War. We are developing a strategic plan to shape joint
    officer management based on the type and quantity of officers needed to
    perform current and future joint missions, and the education, training,
    and experience joint officers require. This strategic approach will
    ensure future joint officers meet the needs of joint commanders.
        We are already taking some initiatives to improve our Joint
    Professional Military Education system, with the goal of educating and
    training the right person for the right task at the right time.
    Historically, we waited until officers became majors and lieutenant
    colonels before we provided them with joint education. We are finding
    that the War on Terrorism requires noncommissioned officers and junior
    officers from all Services to work in the joint environment more often
    than they have before. We are developing courses tailored to the needs
    of our younger troops that expose them to joint warfighting far earlier
    in their careers. To improve joint officer management and education,
    and prepare officers for joint duty earlier in their professional
    careers, I request consideration to allow the Service War Colleges to
    teach Joint Professional Military Education (JPME) Phase Two and the
    authority to determine the appropriate length of the Joint Forces Staff
    College's JPME Phase II course. We also have pilot programs providing
    joint education to Senior Noncommissioned Officers and our Reserve and
    Guard component members. Additionally, we are reviewing our joint
    general and flag officer training programs to ensure our senior
    officers are prepared to command joint task forces and work effectively
    with interagency and coalition partners.
        Today, the Chairman remains well positioned to assist in providing
    strategic direction to the Armed Forces, assess impacts on the long-
    term readiness of the force, and evaluate current and potential levels
    of risk associated with global military activities. Already, we are in
    the process of transforming our internal processes to make them more
    responsive in the current dynamic environment. In a similar vein, I
    request we also reevaluate and streamline our current reporting
    requirements to Congress, many of which seem of questionable utility. I
    propose the formulation of a working group composed of members from the
    HASC, SASC, HAC, SAC, OSD, OMB and Joint Staff to identify the best
    means and frequency of communications to meet Congressional oversight
    needs.

                    TRANSFORMATION OF THE U.S. ARMED FORCES

        We cannot focus solely on the threats we face today and assume
    there are not other, perhaps even more challenging threats on the
    horizon. Maintaining our unchallenged military superiority requires
    investment to ensure the current readiness of deployed forces while
    continuing to transform military capabilities for the future. Our
    adversaries will learn new lessons, adapt their capabilities, and seek
    to exploit perceived vulnerabilities. Therefore our military must
    transform, and must remain ready, even while we are engaged in war.
        Before the events of September 11th, transforming the force was
    viewed as DOD's greatest near-term challenge. Since then, we have had
    to fight battles in the mountains of Afghanistan, in the cities of
    Iraq, and around the world for the security of America. Putting
    transformation on the back burner and focusing solely on the fight at
    hand is simply not an option. We are fighting a war unlike any we have
    fought before--it demands new ways of thinking about military force,
    new processes to improve strategic agility, and new technologies to
    take the fight to the enemy. DOD continues to invest heavily in
    transformation, both intellectually and materially.
        The draft National Military Strategy adopts an ``in-stride''
    approach to transformation that balances transformation, modernization
    and recapitalization to maximize our military advantages against future
    challengers. In addition to describing how the Joint Force will achieve
    military objectives in the near term, the strategy identifies force
    employment concepts, attributes and capabilities that provide the
    foundation for the force of the future. The goal is full spectrum
    dominance--the ability to control any situation or defeat any adversary
    across the range of military operations. We must ensure our military
    forces possess the capabilities to rapidly conduct globally dispersed,
    simultaneous operations; foreclose adversary options; and if required,
    generate the desired effects necessary to decisively defeat
    adversaries.
        We recently published the Joint Operations Concepts document that
    describes a suite of concepts of how the joint commander will fight in
    2015 and beyond. Joint Operations Concepts provide a framework for
    developing capabilities and defining concepts to achieve full spectrum
    dominance. Using this document as a foundation, the Joint Staff
    completed development of five joint functional concepts to define how
    joint warfighting will be conducted across the range of military
    operations. These functions include force application, protection,
    command and control, battlespace awareness, and logistics. Meanwhile,
    the Combatant Commands have been working on four high-level operating
    concepts that include strategic deterrence, stability operations,
    homeland defense, and major combat operations.
        Collectively, functional and operating concepts define how we want
    to fight in the future, and will help us transform from the threat-
    based force of the Cold War to a capabilities-based force postured to
    respond to a wide variety of threats, some of which we cannot
    confidently predict today. To aid the Joint Requirements Oversight
    Council in determining warfighting needs with a capabilities-based
    approach, we are developing joint integrating concepts. These concepts
    are far more focused than functional and operating concepts, and define
    specific tasks to be conducted. They are designed to bridge the gap
    between how we want to fight and the capabilities we need. Examples
    include urban operations, global strike operations, and forcible entry
    operations. The functional, operating and integrating concepts will
    continue to evolve over time. The first round of this very important
    concept work should be done within the year.
        For each functional concept area we have established a Functional
    Capability Board to integrate the views of the Combatant Commands,
    Services, Defense Agencies, Joint Staff, and OSD. These boards comprise
    functional experts from across DOD who will provide the best advice
    possible for our planning, programming, and acquisition processes.
    Functional Capability Boards also support a new process called the
    Joint Capabilities Integration and Development System, which replaces
    the previous Cold War-era Requirements Generation System. The new
    system recognizes that less expensive programs can have a significant
    impact on joint operations. Virtually all programs are reviewed through
    the JROC process for potential joint impact before they get a green
    light, ensuring all Service future systems are born joint.
        Based on the recommendations of the Joint Defense Capabilities
    Study--the Aldridge Study--we established the Strategic Planning
    Council chaired by SECDEF, and composed of the Service Secretaries, the
    Joint Chiefs, Principal Under Secretaries and the Combatant Commanders.
    The first meeting was held January 28, 2004. To capture and disseminate
    this top-down strategic direction, we will produce a new Strategic
    Planning Guidance document as the mechanism to provide subordinates
    with this strategic guidance. The first Strategic Planning Guidance
    document was completed in March 2004.
        We are also developing an Enhanced Planning Process that integrates
    DOD-wide lessons learned, experimentation, concept development, study
    results, capability gap analysis, and technology development into a
    collaborative capabilities planning function. The goal is to offer
    distinct and viable alternatives to senior leadership rather than a
    consensus driven, single point solution, and implement their decisions
    into the Joint Programming Guidance document, the first of which will
    be issued in May 2004.
        These three transformational process initiatives--Functional
    Capability Boards, Joint Capabilities Integration and Development
    System, and the Enhanced Planning Process--work together improving our
    planning and programming agility for future joint capabilities. JFCOM
    is working with the Functional Capability Boards to incorporate lessons
    learned from OEF and OIF into a list of materiel and non-materiel
    recommendations to the Joint Requirements Oversight Council to turn
    lessons learned into identified capabilities needs as quickly as
    possible.
        JFCOM is also coordinating with the Services, Combatant Commands,
    other U.S. agencies, and coalition partners to ensure experimentation
    efforts support the warfighter. One of JFCOM's key experimentation
    initiatives is the Standing Joint Force Headquarters, which will
    provide Combatant Commanders a rapidly deployable command and control
    team, along with supporting information systems and reachback
    capabilities, that will enable us to respond to regional conflicts with
    smaller and more effective joint operational headquarters. JFCOM is
    establishing the prototype Standing Joint Force Headquarters this year,
    and in fiscal year 2005 we will field the communications portion known
    as the Deployable Joint Command and Control System to CENTCOM and
    PACOM. EUCOM and SOUTHCOM receive follow on systems in fiscal year 2006
    and fiscal year 2007. The Deployable Joint Command and Control System
    will use state-of-the-art information technology to enhance Joint Force
    command and control.
        Communications systems are a prime target for transformational
    ideas. The Joint Tactical Radio System is a software programmable radio
    that will provide seamless, real-time, voice, data and video networked
    communications for joint forces. It will be scalable allowing
    additional capacity (bandwidth and channels) to be added, backwards-
    compatible to communicate with legacy systems, able to communicate with
    multiple networks, and able to accommodate airborne, maritime and land
    based systems. It provides the tactical warfighter with net-centric
    capabilities and connectivity to the Global Information Grid, and is
    essential to meeting our 21st century joint communications warfighting
    requirements.
        Transformation also means developing multiple, persistent
    surveillance capabilities that will let us ``watch'' situations and
    targets by looking, smelling, feeling, and hearing with a variety of
    long-dwell sensors from space, air, ground, sea and underwater and
    integrating these capabilities into a ``system of systems.'' The
    exploitation of Measurement and Signature Intelligence (MASINT), holds
    great promise. MASINT collects information from many diverse sources to
    detect, characterize and track a target or activity by its distinctive
    properties, or ``signatures'' that are very difficult to conceal or
    suppress. Last year, DIA created its Directorate for MASINT and
    Technical Collection to develop new forms of technical collection and
    integrate MASINT into collection strategies and operations.
        Another example of the transformational technologies we have just
    fielded is the Army's Stryker Brigade, which is centered on a new,
    fast, and quiet vehicle that can deliver 11 troops to the fight. This
    effort is far more than simply fielding a new vehicle; it is also a new
    way to organize a brigade, and link that brigade to a networked command
    and control system that shares intelligence, surveillance, and
    reconnaissance information. Our Stryker Brigade Combat Teams (BCTs) are
    organized and trained to take advantage of this new technology. The
    first Stryker BCT is already proving its worth in Iraq.
        To reduce our vulnerability to weapons of mass destruction, we have
    made progress on providing missile defenses for our homeland, our
    deployed forces, and our friends and allies. In the coming year, we
    plan to deploy six ground-based interceptors in Alaska and four in
    California to provide an initial capability to defend the United States
    from ballistic missile attack. The PATRIOT missile defense system and
    the emerging AEGIS-based SM-3 system will provide short and medium
    range missile defenses, as well as critical surveillance and tracking
    essential to our Ballistic Missile Defense System. Coupled with an
    upgraded launch detection capability provided by the Space Based
    Infrared (SBIRS) Family of Systems, our ballistic missile defenses will
    continue to improve significantly over the next few years.
        The Global Positioning System (GPS) offers an excellent example of
    a system that transformed modern warfare. GPS delivers worldwide
    positioning, navigation and timing data that provide U.S. and allied
    forces an all-weather, precision engagement capability. Over the last
    decade, the success of combat operations was largely due to GPS-aided
    precision-guided munitions. We must continue to modernize GPS, improve
    capabilities, protect U.S. and allied access to reliable military
    positioning, navigation and timing information, and deny this
    information to our adversaries, while minimizing impacts to peaceful
    civil users. We are engaged with NATO and the European Union to resolve
    our concerns with the proposed Galileo system, a civil satellite system
    that puts at risk our programmed military enhancements to GPS. A U.S.
    interagency team has made significant headway with some tough technical
    issues over the past year, but continued negotiations are essential to
    address the remaining technical, and more importantly, the political
    issues. Once these issues are resolved, we can confidently move forward
    with our vision of space superiority to support future joint and
    coalition operations.
        As recent military operations have demonstrated, space is a
    critical dimension of the battlespace. Lessons learned from OEF and OIF
    highlight our increasing reliance on space communication assets and our
    demand for bandwidth. Our challenge is meeting future warfighter
    requirements in the face of an aging satellite constellation. Despite a
    planned 10-fold increase in capability through Advanced EHF and
    Wideband Gapfiller Systems, projected capacity may not meet the growing
    demand. This shortfall will potentially impact our ability to maintain
    a technological advantage over our adversaries. Work on
    Transformational Satellite Communications continues, which is designed
    to improve communications for mobile systems, particularly those that
    provide intelligence, surveillance, and reconnaissance. Our unmanned
    aerial vehicles and the Army's Future Combat System place heavy demands
    on bandwidth, particularly when real-time video feeds are required. The
    frequency spectrum is critical not only to joint warfighting, but to
    all federal, state and local agencies to ensure national security and
    public safety. Military and civilian technology is rapidly moving to a
    wireless medium. As pressures from commercial sources to free up more
    federal spectrum mount, we must ensure our long-term spectrum
    accessibility for our military forces.
        These are just a few examples our ongoing transformation efforts.
    We are working hard to integrate old systems with new, in innovative
    ways. Interoperating between our own legacy and transformational
    systems is a challenge for us, but it is an even greater challenge to
    our coalition partners, who must participate in key decisions on how
    transformation will enhance combined operations in the future.
        Over the past year, NATO has achieved great success in progressing
    toward a transformed military organization. The Alliance has developed,
    approved, and begun implementing a new, more streamlined command
    structure, which will make it viable in the 21st century global
    security environment. The catalyst for modernization will be the new
    Allied Command Transformation, which will maintain a close partnership
    with JFCOM. Also, on the forefront of transformation, NATO has created
    the NATO Response Force, a key enabler of NATO's new operational
    concept. This expeditionary force is designed to be a multinational,
    deployable, and lethal force intended for employment either within or
    outside of the European AOR. It will be NATO's first responders, able
    to react quickly to a crisis anywhere in the world. In a display of
    NATO's new focus, on August 11, 2003, NATO assumed command of ISAF in
    Afghanistan, the first out of area mission in the history of the
    Alliance. To be an effective joint force in the future, we must ensure
    that our allies keep pace with our transformation efforts.

                                   CONCLUSION

        Responding to today's dynamic threat environment requires our Armed
    Forces to be innovative, agile, and flexible. With Congress' strong
    support, our military has made significant progress combating
    terrorism, improving our joint warfighting capabilities, and
    transforming our military into a 21st Century fighting force. We
    appreciate your efforts to help us be responsive to a changing world,
    and make that world a safer and better place.

        Senator Stevens. Well, thank you very much.
        You're right, some of us up here were part of what they
    called ``The Greatest Generation.'' We now know that we have
    been replaced. This is the finest bunch of men and women I've
    ever seen in uniform.
        Ladies and gentlemen, I want you to know, because of a
    change in the Secretary's schedule, we moved this hearing up to
    9 o'clock. I do apologize. Some of you may not have gotten that
    word until late. But we have started off, Senator Inouye and I,
    with a couple of minutes. I will have a couple of questions,
    then Senator Inouye, then we'll recognize Senator Byrd, then
    we're going to go down on each side by the seniority on the
    committee. That's, I think, the fairest, under the
    circumstances because of the change in the time.

                         FISCAL YEAR 2004 FISCAL STATUS

        So let me ask just one question. Mr. Secretary, I am
    concerned about the statements that I have heard of--including,
    I think, some of yours, General Myers--that you may be some $4
    to $6 billion short in the fiscal year 2004 operating accounts.
    Now, if that is the case, you can move money, you can reprogram
    it back and forth to meet those shortfalls, I hope, in order to
    prevent us from having a supplemental for 2004. Can you give us
    an update on your 2004 fiscal status? Do you think that that
    kind of money will take you into the 2005 fiscal year, so that
    we can concentrate on the 2005 bill, Mr. Secretary? Maybe Larry
    could answer that.

                                   SHORTFALL

        Secretary Rumsfeld. I'm not familiar with the statement
    that General Myers may have made. Do you want to respond?
        Mr. Lanzillotta. Yes, Senator. Mr. Chairman, we're in the
    process of finishing up our 2004 mid-year review, looking to do
    exactly what you asked us to do: to move money in between the
    accounts, because we are trying to move the money to where the
    bills are right now. Right now, we're in the process. We
    haven't quite finished it, but there's no indication of a
    requirement for a 2004 supplemental.
        What is a problem, or what will be a stress, is general
    transfer authority. We have $2.1 billion worth of general
    transfer authority, and we have approximately $500 million
    left. We need to do our annual omnibus reprogramming just to do
    exactly as you mentioned, move the money to the accounts. That
    will be as stress-point for us. Is it a problem yet? We haven't
    finished. I don't know. I can't give you a number at this time.
        Senator Stevens. Any comment, General Myers?
        General Myers. Senator Stevens, the comment I made was that
    there is a--in 2004, there's approximately a $4 billion
    shortfall, which I think is going to be close to what the
    shortfall will be. But then I'll defer to the mid-year review
    and acting Secretary Lanzillotta on how we might cover those
    bills. I didn't make any comment on that. I didn't say we
    wouldn't be able to cover them. But I would say that it will
    take some authorities that we're going to have to get to
    reprogram some of this money, and that there is likely to be
    some impact on some parts of our Armed Forces. We just have to
    hope it's not in the readiness areas and the training areas,
    the ones we worry about. So that review is ongoing, and it
    remains to be seen whether we can cover all of that.
        Secretary Rumsfeld. From the meetings I've been in, my
    impression is that the people who have accounts that are being
    overspent are the ones that express the concern, and those that
    have accounts that are being underspent are relatively quiet.
    And so until the process is completed that the Comptroller's
    Office and the Program Analysis and Evaluation (PA&E) office
    are engaged in, I think it's awfully hard to know precisely
    whether or not there will be a shortfall and even to know
    precisely how much money we will need to reprogram.
        Senator Stevens. We would be pleased to work with the Armed
    Services Committee to see if we need additional ad hoc transfer
    authority before the end of this fiscal year. Perhaps we can
    work that out on an ad hoc single-year basis to get it done
    without trying to handle a supplemental when we're going to be
    looking at the reserve account anyway. But I think the reserve
    account may come too late. We'll have to see.
        Senator Inouye, Co-chairman?
        Senator Inouye. I wish to yield to Senator Hollings. He has
    an emergency.
        Senator Stevens. Senator Hollings, you're recognized for 5
    minutes.
        Senator Hollings. I thank the chairman, and I thank Senator
    Inouye. I've got a friend who passed. I'm going to try to catch
    a plane to his funeral--General Harry Cordes, General Myers,
    who used to command the Strategic Air Command (SAC).
        Unfortunately, Mr. Secretary, you've already, in your
    opening statement, responded to my question. And my question
    was how in the world we're ever going to get the troops out
    unless we get more troops in. And you seem Shinseki-shy. You go
    into all kind of rope-a-dope here about you've got to re-
    balance the skills, we've got to transform the forces for the
    future, we've got to not get a bigger barrel, but move the
    spigot, and all that kind of nonsense.
        I'll never forget when I visited General Westmoreland in
    Vietnam in 1966, and in a country of 16 million he had 535,000
    troops in there, and he spent until 2 o'clock in the morning
    that first night in Saigon saying how he needed 35,000 more.
    Now, in a country of 25 million, you're trying to secure it
    with 135,000. And don't put me off with ``about 200,000.''
    They're not strong. You've got 200,000, but, as General Abizaid
    told Chairman Stevens and myself when we were over there just 1
    month ago, that they needed far, far more training. So what
    happens is that we all want to try to get the United Nations
    (U.N.) and get the North Atlantic Treaty Organization (NATO).
    Chairman Stevens and I listened to President Chirac, and he
    says, ``We've got to have Western solidarity, we've got to have
    solidarity in Iraq,'' and he says, ``When the United Nations
    passes a resolution, you'll find French troops side by side
    with you in Iraq,'' just like we have in Afghanistan, where
    they are working NATO troops now. Now, he cautioned, he said,
    about NATO, that the Arab countries weren't part of it, but,
    ``With a U.N. resolution cover,'' he says, ``you can get
    there.'' My understanding is you all haven't even asked for the
    NATO troops, on the one hand, and you go into this long
    explanation about moving the spigot instead of having a bigger
    barrel and everything.
        You don't have security. In fact, we've bogged down. We're
    building and destroying. We're trying to win the hearts and
    minds as we're killing them and torturing them. And at least
    General Westmoreland didn't have to ask the Viet Cong general
    to take the town, like we have for Fallujah. We have asked the
    enemy general to take the town.
        We're in a mess there. And we keep hearing from the
    Pentagon, ``Sure, the troops are superb.'' But the question is,
    Are we superb back here in Washington?
        Secretary Rumsfeld. Senator, you've covered a lot of ground
    there, and I'd like to try to take a few of the pieces.

                               IRAQ TROOP LEVELS

        With respect to the number of troops, U.S. troops--there
    are also coalition troops and, as you point out, there are
    Iraqi forces--the number of U.S. troops that we have in that
    country is the exact number that General Abizaid requested. Is
    it possible he's wrong? Sure, it's possible anyone could be
    wrong. But he talks to his field commanders, the division
    commanders, every week or two, and asks that question. And
    every time I ask him, I say, ``Look, whatever you need, you
    will get.'' General Myers' advice is that the number he has
    requested is a number that's appropriate.
        Now, all I can say is that the division commanders are
    telling General Abizaid that's the right number. General
    Abizaid is telling General Myers it's the right number. General
    Myers is telling Rumsfeld and President Bush it's the right
    number. You could be right----
        Senator Hollings. Well, isn't it the case that----
        Secretary Rumsfeld [continuing]. But they all don't think
    so.
        Senator Hollings [continuing]. They're scared to death----
        Secretary Rumsfeld. No, they're not. These----
        Senator Hollings [continuing]. That they're going to get
    disciplined----
        Secretary Rumsfeld. Does he look scared to death?
        Senator Hollings [continuing]. If they ask for more.
        Secretary Rumsfeld. No, sir.
        Senator Hollings. They're gone if they ask for more.

                                      IRAQ

        Secretary Rumsfeld. Absolutely not. And you know that.
        General Myers. In fact, Senator Hollings, let me just say
    it's not just General Myers; it's the entire Joint Chiefs of
    Staff. This is something we review regularly. We were just on
    the video teleconference with General Abizaid the other day,
    with the Joint Chiefs, General Abizaid, talking about this very
    issue and looking at, you know, the pluses and minuses of more
    versus less. And it's still the wisdom of General Abizaid and
    his forces that more capability is not--there is no way to
    militarily lose in Iraq. There's also no way to militarily win
    in Iraq. This process has to be internationalized. The United
    Nations has to play the governance role. That's how we're, in
    my view, eventually going to win.
        General Abizaid thinks that handing more of this over to
    Iraqis, not doing the work for them, is what's key, and that's
    why yes, is there training that needs to be done for Iraqi
    forces? Absolutely. Are we slow in getting that going? You bet.
    Until the Department of Defense got the mission, and General
    Abizaid got the mission, for training the police and the rest
    of the security forces, we were way behind. We're moving that
    up very quickly right now. And their performance, while uneven,
    is to be expected when the going gets tough, because they
    just--some of them haven't been trained properly or equipped
    properly. We're trying to fix that as fast as we can. But
    that's certainly got to be part of the solution.
        But----
        Secretary Rumsfeld. I should add that----
        General Myers [continuing]. We don't put anything on
    General Abizaid's request going to the Secretary, I can tell
    you that. And if we have a separate view, as the Joint Chiefs,
    we would offer that, as well.
        Secretary Rumsfeld. The idea that the four members of the
    Joint Chiefs of Staff, four-star generals, and the division
    commanders, General Abizaid and General Myers and General Pace,
    are afraid to tell the truth is just plain wrong and
    unfortunate to even suggest, in my view.

                            UNITED NATIONS AND NATO

        Next, with respect to the United Nations and NATO, we went
    to the United Nations and got a resolution. The Department of
    State has been working with the United Nations to try to get
    another resolution. We want it, the coalition countries in
    there want it, and, you're exactly right, when we get it we
    have a crack at getting some additional countries, beyond the
    33 countries that are currently there.
        Next, you asked that we--said we've not even asked NATO. We
    asked NATO the first month of the war--went over to Brussels
    and requested NATO assistance. NATO is assisting in the sense
    that they have helped with the force generation for the Polish
    division that's currently deployed there. I think, out of the
    26 NATO countries, something like 17 have forces either in Iraq
    or Afghanistan, or both. NATO has the same problem--you might
    humor us about the spigot--the problem is that NATO has a worse
    spigot problem. They've got about 2.4 million people in
    uniform, and they can--they have trouble sustaining 50,000.
    We're sustaining--if you take Iraq, Afghanistan, and the entire
    U.S. Central Command (CENTCOM) area of responsibility--about
    250,000 to 275,000 forces on a base of 2.6 million. They've got
    about 2.4 or 2.5 or 2.6 million, and they're having trouble
    sustaining 50,000. So the idea that the United Nations is some
    sort of a solution to all this problem, or the idea that NATO
    is the solution to all these problems, I think, misunderstands
    the force capabilities of those countries.
        Once you get a U.N. resolution, however, you do reach
    beyond the NATO countries, and that's a big opportunity.
        Senator Hollings. Thank you very much.
        Senator Stevens. Please give the SAC General's family our
    condolences. We remember him, too.
        Senator Byrd.
        Senator Byrd. Secretary Rumsfeld, can you tell the
    committee how the $25 billion request will be structured, what
    appropriation accounts will be receiving increases.
        Senator Stevens. Senator, we do not have that request.
        Senator Byrd. I understand that. But do you have any idea
    how the $25 billion request will be structured, what
    appropriation accounts will be receiving increases in your
    amendment, and what specific activities and programs will be
    funded? Does the Defense Department intend to seek additional
    legislative authorities with this request? Do you intend to
    request additional flexibility in the use of allocation of
    these funds?
        Mr. Secretary?

                      STRUCTURING THE $25 BILLION RESERVE

        Secretary Rumsfeld. Yes, sir. As I mentioned earlier, the
    decisions as to how it ought to be structured and what it ought
    to be called is a matter that's being discussed between the
    White House, the Office of Management and Budget, and the
    Congress. They're trying to work out something that makes sense
    from your schedule and the flow of your legislation in both
    houses.
        The funds would be spent for operational costs and force-
    protection costs. And I do not believe, at the moment, that
    anyone anticipates that there would be additional authorities.
    But it would be for personnel support costs, for combat
    operations, supplies, force protection, transportation, those
    types of things.
        Senator Byrd. What assurances do we have that these funds
    will be limited to operations in Iraq and Afghanistan only, and
    not be diverted into some kind of dual-use activities that
    could be used to prepare for another war?
        Secretary Rumsfeld. The request will specify what they're
    for. And, as always, the Department will see that the authority
    that is provided by the Congress is adhered to. And they're
    currently working out reporting procedures with the Congress
    that will be, I believe, explicit at that point where the
    request comes forward.
        Senator Byrd. Well, I'm sure that Congress would want to be
    sure that there's some limitations on these monies and that
    this will not be a slush fund. I'm also confident that it will
    not be limited to $25 billion. It'll probably be twice that
    amount, or three times that amount, before it's over. I would
    anticipate that.

                                STOP-LOSS POLICY

        Mr. Secretary, America's military forces are stretched thin
    throughout the world. Simply put, we have more military
    commitments than we have the personnel to cover them without
    taking extreme steps. The Army, for example, is dependent on
    the stop-loss policy to retain soldiers and meet its
    commitments in Iraq and elsewhere. How long has the stop-loss
    policy been in effect?
        Secretary Rumsfeld. It's my understanding that stop-loss
    has been a policy that's been in effect for years and years and
    years, and it's been used by all of the services over time, and
    it has a good military purpose. Possibly General Myers will
    want to comment on it. But at that point where a unit--everyone
    in the military, in the Guard, in the Reserve, is a volunteer.
    Each one volunteered knowing that they were going to go on
    active duty or they were going to go in the Guard and Reserve
    and, as needed, they would be called. When a unit is deployed--
    it has trained together, it's worked together, it's ready to
    go, and suddenly it has to go--there are always some people in
    that unit who are due to get out or due to be transferred at
    any given moment. And so what the stop-loss does is, it assists
    with unit cohesion. And if people are due to be deployed, and
    they look at the unit, and they make a judgement at some cutoff
    point and say, ``Anyone who was scheduled to get out, can't.''
    And, therefore, that's the stop-loss.
        Senator Byrd. So how many troops are currently affected by
    the stop-loss order?
        Secretary Rumsfeld. I can check with Dr. Chu, behind me,
    and I'll bet you he knows. About 20,000, he tells me,
    throughout the entire force.
        Senator Byrd. And when would you expect to lift the stop-
    loss order?
        General Myers. Let me--as the Secretary said, Senator Byrd,
    this is essentially the way we do business when we deploy
    units, and it's not just stop-loss, it's also stop-moving, as
    the Secretary said, if they were moving to another post, camp,
    or station, or to school. And as units continue to deploy,
    stop-loss and stop-move will be used in that way.
        I would also say that if individuals are stop-loss'd that
    were planning on getting out of the service, if they--there is
    a process they can go through where they can appeal and say,
    ``Listen, I had something set up that I've just got to do,''
    and I think, for the most part, very few are turned down. Is
    that right, Dr. Chu?
        Dr. Chu. That's correct.
        General Myers. I mean, there's a--the percentage is very,
    very high of those appealing on stop-loss if they have
    something they just have to do. Their case is looked at, and
    their----
        Senator Byrd. General Myers----
        Secretary Rumsfeld. It also varies--excuse me--it varies
    from service to service. For example, at the present time, the
    Air Force is not using stop-loss; whereas, the Army and the
    Navy are.
        Senator Byrd. Mr. Secretary, do you have any concern that
    once you lift the stop-loss order, you will see a mass exodus
    of experienced troops? And do you have any plan to cope with
    such a contingency?
        Senator Stevens. That would be the Senator's last question,
    unfortunately, Senator Byrd.
        Senator Byrd. All right.
        Secretary Rumsfeld. Senator Byrd, I always worry about
    things, and that's a fair question. At the moment, the way the
    stop-loss works is, it's unlikely that it would lead to a mass
    exodus, because it's sequential, and it doesn't affect large
    numbers at a specific time point. It may affect, in the total
    at the present, 20,000 people. But so far the recruiting and
    retention in all of the services is, for all practical
    purposes, meeting their targets. So we're not, at the moment,
    seeing any adverse effect from the stop-loss, nor do people in
    the service, as I understand it, think of it as unusual,
    because it's been a policy that's been used for some time.
        Senator Stevens. Thank you very much.
        Senator Cochran, you're recognized for 5 minutes.
        Senator Cochran. Mr. Chairman, thank you.
        Mr. Secretary, you pointed out, in your opening statement,
    your interest in restructuring National Guard forces to try to
    get the most out of the forces that we have who are available
    to our country in this time of need in Iraq and Afghanistan and
    elsewhere. I applaud that, and I want to assure you that we'll
    be happy to work with you to guarantee that the funds are there
    to help you achieve this goal.
        I happened to notice, in my briefing papers here, that, in
    our State of Mississippi, National Guard and Air National Guard
    units have been deployed. We have more than 3,000 troops from
    our State that have been deployed since Operation Iraqi Freedom
    began. This weekend, we're welcoming home a combat engineer
    battalion, and that battalion, over 200 soldiers in the group,
    were sent in right after the Tikrit Airport was taken over.
    They built a perimeter around that airport, they built
    structures for the defense of our forces throughout northern
    Iraq. They haven't taken a single casualty. They're coming home
    safe and sound. Thirty-two bronze-star medals are being
    awarded, have been awarded, to the troops in that group. And it
    makes me very proud of those troops in particular, but others
    from throughout our State and across the country who have
    responded to the call, carried out their missions with a
    tremendous amount of professional skill and courage. And we owe
    them a great deal. And I know that an effort is going to be
    made to ensure that they are treated fairly. We have some that
    have just gotten back from Bosnia, for example, who are now
    being put on a list for possible deployment to Iraq. We have
    others who have been to Guantanamo Bay.
        So the National Guard and Reserve forces are really being
    stretched, and I worry a little bit about whether or not we
    have the incentives and the pay and benefits that are necessary
    to guarantee that we can retain and continue to recruit members
    of the Guard and Reserve in the future. There's a TRICARE
    program, as an example, a health benefit program that Congress
    has authorized, but it's not yet been implemented for National
    Guard forces. I bring that to your attention because it may be
    one example of what we can do to help make sure we're treating
    those forces fairly.
        What is your response to that general problem that we may
    face and what the Department of Defense is doing to address it?

                        STRESS ON THE GUARD AND RESERVE

        Secretary Rumsfeld. The problem you have mentioned is real.
    You have units, and we look at their deployments--it may be
    Bosnia, it may be Guantanamo, it may be Afghanistan or Iraq--
    and then there are individuals that change in units. And so
    someone may be coming back, and go to another unit, and end up
    being deployed at some point. The planning tools in the Army
    are imperfect, and they are being refined and improved. And
    we're doing today, I believe, a vastly better job than we did a
    year ago in having visibility into the circumstance of
    individuals, as well as units.
        When I sign a deployment order, I look at each unit and the
    number of individuals, and how long since they've been
    deployed. You're right, the Guard and Reserve has stepped up
    and done a magnificent job. You're right, also, that the Guard
    and Reserve have been stressed. But the fact is, it isn't
    probably quite right to say the Guard and Reserve have been
    stressed. Significant portions have. And other portions have
    not, at all, been used. And that goes to the point you made at
    the outset, that we've got to find a way to re-balance these
    skill sets, both within the Guard and Reserve, and also with
    the Active force.

                           MOBILITY REQUIREMENT STUDY

        Senator Cochran. General Myers, one of the units in our
    State, an Air National Guard unit, has been the first Guard
    unit to have a C-17 fleet assigned for operation in Jackson,
    Mississippi, and we're very proud of that honor, and the forces
    there are working hard to do the training and maintain the
    facilities that are necessary to carry out their
    responsibilities. I noticed that a recent Congressional
    Research Service report concluded that there is a need for
    strategic lift capacity greater than that which we had earlier
    expected. Currently, there's a procurement strategy for C-17s
    of a total of 180 by 2007, and the Air Force is indicating now
    they may have a requirement for more than 200. I wonder if the
    aging of the C-17 fleet and the C-5 fleet, are causing you
    concerns. Do you believe the budget requests that are before
    the committee are sufficient to deal with the needs that we
    have for strategic airlift?
        General Myers. Senator Cochran, I believe that the request
    that you have right now is sufficient for fiscal year 2005.
    What we need to do, and what we are doing, is looking at our--
    what we call our mobility requirements study. We do these, as
    you know, periodically. It looks, not only at airlift, but
    other modes of transportation. I think, coming out of that and
    getting ready for the 2006 budget, you will probably see the
    answer to the question on, Do we need more C-17s beyond what
    are currently programmed? And I don't want to prejudice the
    outcome of that. But the concerns you raise are serious
    concerns, and we need to look at it.
        By the way, the C-17 is performing magnificently. You can
    remember it was, at one time, a maligned program, almost cut.
    And it has been--it's kind of my primary mode of transportation
    when I go back and forth to the Middle East, and I've come to
    know it very well.
        Let me just make a comment on the Reserve component. I
    would like to echo what the Secretary says. You know, we're one
    Armed Forces. We're the total force. When I go to visit troops,
    you can't tell who the reservists are, who the Guard's people
    are, or who the Active duty are. Everybody's in there together,
    everybody is performing, in my view, magnificently.
        We've got to worry as much about Reserve component
    recruiting and retention as we do the Active piece, because
    we're a total force. We could not be doing this without the
    Reserve component, and they've really answered up.
        On medical, there are a couple of things that--I know we
    need help in medical--that don't break the bank. One is making
    sure they get TRICARE benefits prior--earlier than they do now
    when they are mobilized. They need that. They also need it
    longer on the other end, when they are demobilized. And they
    need transportability. Right now, if they have a private
    insurance company, they can go to TRICARE. But TRICARE may
    require they change providers. And when you have serious
    medical problems in a family, that's not the thing to do for a
    year or two, to change providers. We could mandate the same
    thing we mandate for Medicare; if you take TRICARE, you know,
    everybody's got to take it. And so there are some--I think,
    some relatively inexpensive, and things we could do today, to
    help our Reserve component mightily.
        The other thing we ought to do, for sure, is make sure that
    our Reserve component folks get annual physicals so we know
    what kind of medical shape they're in, because we've discovered
    a lot of problems. I mean, this sounds farfetched, but one
    person was mobilized, needed a liver transplant. Okay? So we
    ought to keep up with this on a yearly basis so we know what
    the health of our force is.
        Senator Stevens. Thank you very much, Senator.
        Senator Leahy is recognized for 5 minutes.
        Senator Leahy. Thank you, Mr. Chairman.
        Mr. Secretary, yesterday in Iraq an American citizen was
    brutally murdered by al Qaeda. Not long before that we saw the
    dismembered corpses of brutally murdered Americans left hanging
    from a bridge by jubilant Iraqis. Each of these brave Americans
    were there to rebuild that country, and these despicable acts
    illustrate, once again, the depravity, the determination of the
    enemy we face.
        I think we all agree on that, on this committee and on the
    other side. The question is how to stop it. Now, you have said
    you're sorry, and the President said he's sorry, everybody's
    said they're sorry about the Iraqi prison scandal. It's
    actually the first time in this long, protracted and rather
    strange policy I've heard any administration official express
    regret about any mistake.
        So let me tell you a few things I'm sorry about. I'm sorry
    that someone in the administration ``gave currency to a
    fraud,'' to quote George Will, by putting, in the President's
    State of the Union speech, that Iraq was trying to buy uranium
    in Africa.
        I'm sorry that this administration repeatedly, insistently,
    and unrelentingly justified preemptive war by insisting that
    Saddam Hussein not only had weapons of mass destruction, but he
    was hell bent on using them against us and our allies.
        And I'm sorry about administration officials, led by the
    Vice President, repeatedly trying to link Saddam Hussein to 9/
    11, when there never was any link. None. They were doing it to
    build support for the war.
        And I'm sorry that truth-tellers in the administration,
    like General Shinseki and Lawrence Lindsey, were hounded out of
    their job because they had the temerity to suggest realistic
    numbers both for our troop level and for what this war is going
    to cost.
        I'm sorry there's no real plan, despite a year-long $5
    million effort by the State Department, to stop the looting
    that greeted our soldiers upon Saddam's fall, that set back
    reconstruction efforts by months or years, left the gates open
    to ammunition, weapons, and other things that are used against
    our brave soldiers today.
        I'm sorry that the President taunted Iraqi resistance
    fighters to ``bring it on'' while our troops were still in
    harm's way.
        I'm sorry that some of our closest allies and friends, like
    Mexico and Canada, even the countries that you dismissingly
    called ``Old Europe,'' were alienated because they disagreed
    with our strategy of preemptive war, countries whose diplomatic
    and military help we need desperately today.
        And I'm sorry that those that tried to find the truth about
    allegations of prison abuse in Iraq and in Afghanistan and in
    Guantanamo were ignored or brushed off for more than 1 year,
    until all of a sudden the press published the lurid
    photographs, and then we look at it and we have made apologies
    through the whole administration.
        Now, last October 13, in your memo entitled ``Global War on
    Terrorism,'' you asked--I'm quoting what you said--``Are we
    capturing, killing, or dissuading more terrorists every day
    than the madrases and radical clerics are recruiting, training,
    and deploying against us?'' Al Qaeda wasn't in Iraq when we
    started this war. They are there now.
        How do you answer the question you posed last October? Your
    question was, again, ``Are we capturing, killing, or dissuading
    more terrorists every day than the madrases and radical clerics
    are recruiting, training, and deploying against us?'' How would
    you answer that today?
        Secretary Rumsfeld. Well, first I'd like to, Senator,
    answer a few of the other comments you made.
        Senator Leahy. Well, could we answer that one first?
        Senator Stevens. Well, he has the full right to answer your
    question.
        Senator Leahy. I know, but could we answer the question,
    the specific question I asked? That's the only question I
    asked. Answer that, and then say all you want to say.
        Secretary Rumsfeld. I think it's fair that I be allowed to
    answer your statement.
        Senator Leahy. Well, I asked a question. You don't want to
    answer my question?
        Secretary Rumsfeld. I'd be happy to answer your question.
        Senator Leahy. Please do.
        Secretary Rumsfeld. I will.

                               IRAQ TROOP LEVELS

        Let me start this way. The statement that General Shinseki
    was hounded out of office is false. He served his entire term.
    Everyone who knows anything about the military knows that fact.
        Second, he had a different view, which is fair for anybody,
    as to how many forces would be appropriate. To my knowledge, he
    did not express it--well, I won't even say that. Forget that.
    That was a private meeting. But the fact of the matter is,
    every general there--on the ground, in the country, and on the
    Joint Chiefs currently--believed that we have the right number.
    If he disagrees, that's fair. He's a fine, honorable man, and
    he can have a difference of opinion. But the fact is that the
    number there is what the military believes is appropriate.
        General Myers I'd like to comment on the caches that you
    say were left unattended.

                         INVESTIGATING REPORTED ABUSES

        And I think your statement that allegations of abuse were
    ``brushed off'' is unfair and inaccurate. There have been a lot
    of fine people----
        Senator Leahy. I'll show you the correspondence that I sent
    to your office asking about these abuses about 1 month ago that
    were never answered.
        Secretary Rumsfeld. If there was a letter that wasn't
    answered, I apologize. But the fact of the matter is that we
    get repeated reports from people, of problems, and they are
    checked, and they are worked on, and corrections are made, and
    most of the investigation reports indicate----
        Senator Leahy. Apparently not in Iraq----
        Secretary Rumsfeld [continuing]. That----
        Senator Leahy [continuing]. Or Afghanistan, according to
    the front page of papers this morning.
        Secretary Rumsfeld. The fact of the matter is that in Iraq
    there have been improvements made, and successive
    investigations have seen that improvements were made, and they
    were not brushed off. But I think saying that the military
    chain of command was ``brushing off'' legitimate comments about
    procedures being used with the detainees is just simply not
    consistent. We're trying to find out precisely what happened,
    and we're going to end up with six investigations going on, and
    we'll know the extent to which things were or were not brushed
    off.
        Last, I don't know the answer to your question. I wish I
    did. I posed it because it may be a question that's not
    answerable except over time. But I do worry about it, which is
    why I wrote the memo and why I sent it to General Myers. I
    think that the world is facing a very dangerous threat in
    international terrorism. They are capable--and, in fact,
    already have killed tens of thousands of people in various ways
    in different countries over time--3,000 in this country alone,
    and attacks in Saudi Arabia, attacks in Turkey, attacks in
    Indonesia. And we know these madrasa schools--not all madrases
    are bad, but a small fraction of them do, in fact, get funded
    for the specific purpose of training people to go out and kill
    innocent men, women, and children and to do the kinds of things
    you've cited in your opening statement. It is inhuman. It is
    against any law of war. And it's a dangerous thing. And I don't
    know of any way that one can calculate that. Our folks are
    doing the best job they can.

                                   MARK BERG

        General Myers. Senator Leahy, let me just--let me talk a
    little bit about the gruesome murder of Mark Berg. The best we
    know--and I don't know that we know this for sure--but it looks
    like the perpetrator, the lead perpetrator, might have been
    this fellow, Zarqawi, who, while not al Qaeda, has been al
    Qaeda-affiliated for a long, long time. Well before the war in
    Iraq, he was in Iraq from time to time. If that's true, then
    this is not Iraqis killing Americans, this is a--in fact, he
    is, I think, a Jordanian citizen. But he's an extremist, most
    of all. And the Zarqawi letter tells us all we need to know
    about him. He will do anything to stop the progress in Iraq.
    He's the one that suggested, ``We're losing to the coalition.
    We have to do something dramatic, and maybe we need to start a
    civil war between Sunni and Shia.'' So this act, if it is, in
    fact, Zarqawi, as some allege, this is a further validation of
    what his tactics are. I just make that point on the Mark Berg
    thing.
        Senator Leahy. I appreciate that. Mr. Chairman, we'll be
    able to submit other questions----
        Senator Stevens. Yes, on appropriations. This is not about
    Iraq abuse.
        Senator Leahy. We haven't even been given the request yet,
    and we're having to----
        Senator Stevens. We have the request for----
        Senator Leahy. For $25 billion?
        Senator Stevens [continuing]. Four hundred and one billion
    dollars. That's what we're talking about this morning. We
    haven't received the reserve request, that's true, but that's--
    you know, I have no cork to put in Senators' mouths or
    witnesses' mouths, but my hope----
        Senator Leahy. Appreciate that.
        Senator Stevens [continuing]. Is to pursue the information
    we've gotten so far, on which we still need a lot of
    information about the $401 billion.
        Senator Domenici is recognized for 5 minutes.
        Senator Domenici. Mr. Chairman, I will follow your
    admonition. But I wish I had a few moments to tell this
    committee what I'm sorry about. I'm sorry about 9/11, when
    3,000 Americans were killed by terrorists. I'm sorry that
    Saddam Hussein took over this country and killed thousands of
    people and established one of the worst regimes ever. And
    there's another long list of what we're sorry about, and
    they're completely different than what Senator Leahy's sorry
    about.
        Now, having said that, we are only 42 days away from
    turning over this country to the Iraqi leadership, whatever
    that is. Mr. Secretary and General, I am very worried about how
    prepared the Iraqis are to take over this responsibility, and,
    secondly, what we have done to prepare ourselves and them to
    work together to make this work.
        I can envision that this situation will not work, and that
    we won't have an organizational structure that will do anything
    other than have Americans fighting and us supplying those
    fighters with more and more money. Can you describe, as best
    you can, where we are, what we're going to do, and how
    confident you are that this turnover is going to be meaningful,
    in terms of maintaining the peace and moving ahead with
    America's commitment.

                         TRANSFER OF AUTHORITY IN IRAQ

        Secretary Rumsfeld. Thank you, Senator.
        It's a tough question. If you think back to Afghanistan, we
    didn't know how that was going to work. We went in, the Taliban
    was removed, the al Qaeda were put on the run, and what was
    left were a series of warlords with militias, and no government
    structure. And, lo and behold, out of the blue came something
    called a loya jirga, and out came agreements that a fellow
    named Karzai should be selected as interim president. And there
    he is. And it's been wobbly, and he's worked his way along, and
    he's made arrangements with other people, and, lo and behold,
    it's survived. No one in the world could have predicted how
    that would go. And now they're scheduled to have elections
    later this year, they're scheduled to endorse their
    constitution, and it might very well work. I've got confidence
    that it will work.
        Senator Domenici. Mr. Secretary----
        Secretary Rumsfeld. But it was an Afghan solution.
        Senator Domenici [continuing]. I have been fair, I think,
    in my question, and I have been fair with you all, all the
    time, but I don't want to hear about Afghanistan. It is
    completely different----
        Secretary Rumsfeld. It is.
        Senator Domenici [continuing]. In my opinion. It has
    nothing whatsoever to do with Iraq that has people like al Sadr
    around, gathering up people, that we have cities that we are
    abandoning to a bunch of thugs, and yet, at the same time,
    we're saying we're going to form a new government and turn over
    power to them. I believe that you have to be better prepared
    for this transition than I have heard. And it may be you can't
    tell us, but the transition is not something that's going to
    work unless you have planned it, and the military has planned
    it, and you're working with Iraqis. And, frankly, I think you
    ought to tell us.
        Secretary Rumsfeld. Well, I'll do my best. The United
    Nations representative, Brahimi, is--been working with us, with
    the Coalition Provisional Authority, and with the Iraqi people,
    the Iraqi Governing Council, and hundreds of others, Iraqis.
    And he has come up with a formula, which is now being tested in
    the marketplace there. People are describing it, talking about
    it, analyzing it, recommending changes. And it may not be
    exactly what he proposed, but it'll be something like that. My
    guess is, there'll be a conclave, something like a loya jirga,
    where governors and city councils and people like that will
    come together, and they'll end up working out something that is
    generally acceptable to the bulk of the people--not
    permanently, but between June 30, when sovereignty is accepted
    by the Iraqi government, whatever it looks like. The current
    theory is, there'll be a president, a couple of vice
    presidents, there'll be ministries, and they will assume that
    responsibility for a period, and the period would be ended
    after they have fashioned a constitution, voted on a
    constitution by the Iraqi people, and then elected other people
    to succeed that interim group.
        Will it happen right on time? I think so. I hope so. Will
    it be perfect? No. Will it be like Afghanistan? No. You're
    right. It'll be an Iraqi solution, just like Afghanistan was an
    Afghanistan solution. Is it possible it won't work? Yes. And is
    it possible they'll stumble and wobble? Everybody stumbles and
    wobbles.

                       RECONSTRUCTING IRAQ INFRASTRUCTURE

        Senator Domenici. Mr. Secretary, let me just, for instance,
    raise one question. It would appear to me that for this to
    work, somebody has to have a plan for serious long-term
    improvement of the infrastructure of that country. That's not
    going to fall on our shoulders. Somebody has to put it
    together. Somebody has to make sure that the monies coming into
    that country are used to leverage long-term loans of a lot of
    money, or there's no chance that the Iraqis are going to buy
    this based on upon ``things will work out years from now.''
    They've got to work out from the very beginning. And I wonder
    who's working on that kind of infrastructure assurance, or are
    we just expecting it to happen?
        Senator Stevens. That's the Senator's last question. I'm
    sorry.
        Senator Domenici. I thank you.
        Secretary Rumsfeld. The conviction on the part of the
    United States and the coalition countries has been that you
    need to make progress on Iraqis taking over governance of their
    own country, simultaneously make progress on security, and
    simultaneously make progress on essential services, the
    infrastructure, that one can't go ahead of the other. You're
    not going to get infrastructure to proceed if, in fact,
    security isn't sufficient to protect it. You're not going to
    get the governance to go forward if there isn't some progress
    on infrastructure and essential services. So that understanding
    is there.
        My personal view is that the critical ones are governance
    and security, and that the infrastructure will be something
    that will probably lag behind somewhat, and they're going to
    have to pay for their improvements in their infrastructure. The
    Congress has voted some money, the international community's
    given some money. They've got oil revenues. They are going to
    have to do that. It's going to take them time. There isn't any
    reason that country can't be as prosperous as its neighboring
    countries--Kuwait and--but that isn't going to come from us;
    that's going to come from them. And these are intelligent
    people, they're industrious people, they've got resources,
    they've got water, they've got oil revenues, and they're going
    to have to do that themselves.
        What our task is, is to pass governance to them, have them
    accept it. Will they be good at it at first? No. They're not
    going to be good at it. They've been living under a
    dictatorship. They don't know how--they're not going to be
    instantaneously successful in negotiating, compromising,
    putting their fate in a piece of paper called the constitution
    that'll protect the rights of each religious group in there.
    But they'll get it eventually, just like the Afghans are
    getting it, it seems to me.

                            SECURITY FORCES IN IRAQ

        With respect to security, it's our job to see, as General
    Myers said, that we continue to invest in recruiting and
    training and deploying and developing a chain of command so
    that the Iraqis are able to take over security for themselves.
    People can be quite dismissive of the 206,000 Iraqi security
    forces. But 300 have been killed. They've not been killed
    because they're sitting in their barracks with their fingers in
    their ear; they've been killed because they've been out doing
    the job of helping to provide security in that country. And, by
    golly, we can help train 'em, we can help equip 'em, and we can
    give them more responsibility, and they're going to have to
    take it over, because the United States has no intention in
    staying there. We're not going to make a career out of that.
        Senator Domenici. Thank you very much.
        General Myers. Let me just----
        Senator Stevens. Senator Myers, did you wish to comment?
        General Myers. Yeah, just a--I've got a short comment, Mr.
    Chairman, thank you.
        Senator Stevens. General Myers. You're not a Senator yet.
        General Myers. Thank you. On the security front, first of
    all we're going to have 20,000 additional troops in there for
    some time to come, as I mentioned in my opening statement. We
    delayed some, and we're going to replace them. So we're going
    to have in the neighborhood of 135,000 to 136,000 troops there
    for the foreseeable future to deal with the security issues we
    think we need to deal with, and that's been General Abizaid's
    request.
        Second, we're going to stand up a brand new headquarters
    that'll deal, at the strategic level, with our chief of
    mission, with other chiefs of missions, and, most importantly--
    most importantly--with Iraqis. We want to go from a coalition
    in that country to a partnership with Iraq, and this means
    developing the ministry of interior, the ministry of defense,
    and have Iraqis part of that whole chain. And we see it as a
    mentoring program for a while, but eventually, as the Secretary
    says, you've got to take the hand off the bicycle seat and see
    how far they get, and if they fall over and bruise themselves
    and get cut up, then you wipe 'em off, you dry, you put a Band-
    aid on the knee, and off they go again.
        We think an awful lot about how we're going to do that on
    the security front, and the equip and training of the Iraqi
    forces I won't go into again. But there's been a lot of thought
    given to that structure that we're going to. We're going to try
    to stand up that headquarters as quickly as we can, matter of
    fact. We've been working that for a couple of months now.
        Senator Domenici. Thank you, Mr. Chairman.
        Senator Stevens. Thank you.
        Senator Harkin, you're recognized for 5 minutes.
        Senator Harkin. Thank you, Mr. Chairman.
        Senator Stevens. Let me inquire anybody wish a station-
    break? Okay.
        You're recognized for 5 minutes.
        Senator Harkin. Thank you, Mr. Chairman.

                    CONTROL OF PRIVATE MILITARY CONTRACTORS

        Mr. Secretary, on May 7, an Associated Press (AP) story
    came out, that said a year before the Iraq invasion, the then
    Army Secretary warned his Pentagon bosses that there was
    inadequate control of private military contractors. Retired
    Army Chief Thomas White said that, ``The recent events show the
    Pentagon has a long way to go to fix the problems he identified
    in March 2002. In a sign of continued problems with the
    tracking of contracts, Pentagon officials, on Thursday,
    acknowledged they have yet to identify which army entity
    manages the multimillion dollar contract for interrogators like
    the one accused in the Iraq prisoner abuse probe. I'm still
    reading from the AP release--``Defense Secretary Donald H.
    Rumsfeld also acknowledged his Department hasn't completed
    rules to govern the 20,000 or so private security guards
    watching over U.S. officials, installations, and private
    workers in Iraq.'' Now, that's just 20,000 private security
    guards. How many more, we don't know. This article goes on and
    says, ``No single Pentagon office tracks how many people--
    Americans, Iraqis, or others--are on the Department's payroll
    in Iraq.''
        I just find this disturbing that we don't know how many
    people are on the payroll, or who they are. This says to me, we
    might have a bunch of Rambos over there running around, and no
    one's got control over them.
        In a March 2002 memo, White complained to three Pentagon
    Under Secretaries that, quote, ``Credible information on
    contract labor does not exist internal to the Army
    Department.'' The Army could not get rid of, quote,
    ``unnecessary, costly, or unsuitable contracted work,'' closed
    quotes, without full details of all the contracts, White wrote.
        Secretary Rumsfeld. Is this referring to Iraq or
    Afghanistan, or what? Or just generally?
        Senator Harkin. The article is on Iraq. This is just
    basically on Iraq.
        Senator Stevens. Senator, did you----
        Senator Harkin. But then----
        Senator Stevens [continuing]. What source are you quoting?
        Senator Harkin. I've quoted from this AP article. It's an
    AP article that came out on May 7. That's all I'm quoting.
        So my question, again has to do with appropriations. How
    much money is going to private contractors? We can't seem to
    get an answer to that. In Iraq. How many people are we talking
    about under these private contractors? Who screens them? Who
    approves their contracts? I guess my bottom line is, Who's
    responsible? Who's responsible for all these people?
        Secretary Rumsfeld. The Coalition Provisional Authority in
    Iraq, headed up by Ambassador Bremer, tracks these people. We
    track DOD people that are there, but they've reported to
    Congress. The Army, the United States Army, is the executive
    agent for contracting for the Coalition Provisional Authority
    (CPA). And the CPA's--the Coalition Provisional Authority's
    Program Management Office works for the United States Army.
        Senator Harkin. So the Army's in charge.
        Secretary Rumsfeld. The Army is the----
        Senator Harkin. Contracting----
        Secretary Rumsfeld [continuing]. Program Management Office
    and executive agent. I would not say that the Army would be the
    one making the decisions as to what contracts ought to be let
    for what purposes. That would be the Coalition Provisional
    Authority. But then they delegate to an existing institution,
    the United States Army, to manage the contracting of it. In
    some cases, it's been the Corps of Engineers; in some cases,
    it's been the Agency for International Development (AID); in
    some cases--the way our Government is organized is that those
    responsibilities flow down different roads, and that's the way
    the executive branch of the Federal Government's organized,
    that's the way the Congress is organized. And there is not a
    single person, I wouldn't think. Because if--AID reports up in
    the Department of State area. Just a second here.
        Senator Harkin. Could we know, Mr. Secretary, what's under
    your jurisdiction? I mean, what is under--in terms of private
    contractors and the jobs that are being done over there----
        Secretary Rumsfeld. You bet. We can give you----
        Senator Harkin [continuing]. I'd like to----
        Secretary Rumsfeld [continuing]. A complete report of it.
        Senator Harkin. Huh?
        Secretary Rumsfeld. We could give you a complete report of
    who handles what types of contracts. Corps of Engineers handles
    a whole series of contracts. And military intelligence, when
    they hire contractors, for example--I think you mentioned
    this--for the purpose of interrogation or for the purpose of
    linguists to do translation, that would be through military
    intelligence. It depends on what it is that's needed at any
    given time.
        Senator Harkin. Well, again, I'm just quoting from the
    article, because I don't----
        Secretary Rumsfeld. I haven't seen the article, so----
        Senator Harkin. It says----
        Secretary Rumsfeld [continuing]. I apologize.
        Senator Harkin [continuing]. No single Pentagon office
    tracks how many people are on the Department's payroll in Iraq,
    the Department of Defense payroll. How many civilians are on
    your payroll over there? And I would be greatly----
        Secretary Rumsfeld. We could certainly give you----
        Senator Harkin [continuing]. Disturbed if this article is
    true.
        Secretary Rumsfeld. The reference--it wasn't a quote, but
    it was a comment about--allegedly indicating something I had
    said. I've never heard of that, what you've said the article
    said I said. But we'd be happy to tell you how many there are,
    and who they are hired by, and for what purposes.
        Senator Stevens. Senator----
        Senator Harkin. If you could provide for this committee how
    much----
        Senator Stevens [continuing]. Mr. Lanzillotta wished to
    answer that question, I think.

                             REPORTING ON CONTRACTS

        Mr. Lanzillotta. Senator, I may be able to help a bit. We
    submit a quarterly report--it's called a 2708 report--that has
    a lot of that information in there. As far as contracts go, for
    the funding and the number of people, we track that on a weekly
    basis. I get that information through CPA. It comes in an
    obligation report of how much has been apportioned, how much
    has been committed, how much has been obligated. And I see all
    the funding documents that go through--on every contract, with
    the number of people--that go through there, and I personally
    sign off on those.
        Senator Harkin. So you can provide to this committee how
    much money goes through the Department of Defense to private
    contractors, one. You could provide how many civilian people
    are working under those contracts in Iraq at this time, and you
    can provide also, to this committee, the chain of command who
    is responsible for overseeing those contractors. You can
    provide all that?
        Mr. Lanzillotta. I can--let me clarify your last----
        Senator Harkin. Well, I'm just----
        Mr. Lanzillotta [continuing]. The chain of command----
        Senator Harkin [continuing]. Citing, again, from this
    article; I don't know if it's true--no single Pentagon office,
    according to this writer, tracks how many people--Americans,
    Iraqis, or other civilians--are on the Department's payroll in
    Iraq.
        Mr. Lanzillotta. If you're asking who let the contract----
        Senator Harkin. Who tracks how many people there are there?
        Mr. Lanzillotta. I can give you, and we'll provide for the
    record, the obligation data, as of this hearing date, the
    number of people that we have in the various categories,
    working. And I will provide which office did the contract.
        [The information follows:]

        According to the CENTCOM Combatant Commander, on or about
    May 12, 2004 there were approximately 12,900 U.S. contract
    employees hired under DOD sponsored prime contracts in the
    CENTCOM Area of Responsibility. Approximately 7,050 of these
    contractors are deployed in Iraq. Please note that due to the
    nature of the contract--DOD contracts for a service to be
    performed--it is up to the contractor to provide the
    appropriate number of people to perform the work. Therefore,
    the numbers that are provided above are estimates of the number
    of people that process through military entry points. This
    number changes daily.

        Secretary Rumsfeld. Let me put it this way also.
        Senator Harkin. Fine.
        Secretary Rumsfeld. We can provide that data. You keep
    going back to the point, which is a fair point, Is there a
    single office? And the answer is, no. For one, the way the
    Congress is organized and the way the statutes that the
    Congress has passed has organized the Department of Defense,
    we've got Department of Army, Department of Navy--they do
    things there, Air Force does things there. Each of the services
    do--the Marines do, and other elements. So the only place that
    information gets aggregated, the way the Congress has organized
    the Department under Goldwater-Nichols, is through the
    Comptroller's shop, where they take all of the things that
    happen in the Department and try to pull them up, I think is
    the answer to your question.
        Senator Harkin. So there's no coordination?
        Secretary Rumsfeld. Of course there's coordination. You
    didn't ask that. You asked, Is there a single office? The
    coordination takes place in the Comptroller's shop.
        Mr. Lanzillotta. We coordinate--when a contract comes
    through, we coordinate with all affected offices, to include
    the general counsel, to ensure that there are no objections and
    it is a legitimate contract.

                                  CONTRACTORS

        Senator Harkin. Mr. Chairman, I know my time is up, but my
    point is that we don't know how many civilian people are
    contracted. We don't know how much they're being paid. And it
    just seems that there's no real handle on all these civilians
    over there. I just don't know. We can't seem to get a handle on
    it.
        Senator Stevens. Senator, I think that--we had a suggestion
    from Mr. Lanzillotta they'll provide us with some information.
    I think the problem is that I don't think it's all in one place
    at any one time.
        General Myers, did you wish to comment?
        General Myers. Well, I have numbers, but I think I'll defer
    to----
        Mr. Lanzillotta. Well, I can----
        General Myers [continuing]. Mr. Lanzillotta. But I have the
    number of U.S. contractors, the number of--you remember it was
    in the 1990s when we started downsizing. We cut our military by
    one-third, roughly. And the cry then was, from many people, and
    from people in the business sector, How about outsourcing a lot
    of your work? So we did that, and you remember that. We saved
    money, because we don't need a lot of folks to do dining halls
    if we only need to do that during crisis. And so that's the
    situation we are in now. We are contracting out a lot because
    of previous decisions we made, encouraged, I think, for the
    right reasons at the time. And one of the things I've asked one
    of our staff entities to do is, let's take a look at
    contracting out and see if those decisions we've made in the
    last 10, 15 years are still right for this security
    environment, because of the contractor issues we're finding on
    the battlefield.
        But I've got the numbers. I can give you down to the number
    of host nation--Iraqi laborers. There's 17,834 that are----
        Senator Stevens. General, if we may--Mr. Lanzillotta's
    going to provide----
        Mr. Lanzillotta. Yeah, I have it----
        Senator Stevens [continuing]. That for the record.
        General Myers. We'll provide it for the record, but I'm
    just saying----
        Senator Stevens. We'll review that and then have comments
    later----
        General Myers [continuing]. That I've got some pretty good
    detail here.
        Senator Stevens [continuing]. If that's agreeable with the
    Senator.
        Senator Harkin. That would be fine.
        Senator Stevens. Thank you.
        [The information follows:]

        The Department of Defense (DOD) policy is to rely on the
    most effective mix of the Total Force, cost and other factors
    considered, including active, reserve, DOD civilian, host
    country and contract resources to fulfill peacetime and wartime
    missions. One of the reasons contracts are attractive is their
    flexibility and agility in meeting government requirements. The
    government is also relieved of the cost of maintaining
    permanent force structure while maintaining contract oversight
    after contract award.
        Generally, there are two types of DOD contractors currently
    operating in OIF; those supporting DOD military efforts and
    those supporting the Coalition Provisional Authority (CPA)
    efforts. There is no single office responsible for contractor
    visibility. Instead, each individual government organization
    with a requirement that can be satisfied by contract is
    responsible for providing a contract statement of work/
    objectives; funding; appropriate contract clauses, terms and
    conditions; legal review at various stages of the acquisition
    process; and contract oversight after award. This process
    provides flexibility and an adequate level of review while also
    meeting government requirements.
        The U.S. citizen contractor personnel for DOD are accounted
    for in basically the same manner as military personnel. The
    military Services account for U.S. citizen contractor personnel
    and report aggregate contractor personnel numbers monthly to
    the Joint Staff and Office of the Secretary of Defense using
    the Joint Staff Personnel Status Report (JPERSTAT). Per the
    JPERSTAT, there are 14,371 DOD U.S. citizen contractor
    personnel (as of May 25, 2004) operating in the Central Command
    area of responsibility. Approximately 7,386 of these contractor
    personnel are operating in Iraq. The JPERSTAT only captures
    U.S. citizen contractor personnel that process through DOD
    entry points or are assigned to military units in theater. The
    JPERSTAT does not capture all contractor personnel in the
    theater. It does not capture contractor personnel hired under
    non-DOD federal government contracts (e.g., CPA, Central
    Intelligence Agency, State Department, United States Agency of
    International Development). It also does not capture foreign
    national contractor personnel or contractor personnel hired
    under sub-contracts since it is the responsibility of each
    prime contractor to determine the level and nature of manning
    required to meet contract requirements (e.g., the prime
    contractor may choose to outsource a portion of the effort
    through various tiers of subcontracting relationships with
    other U.S. civilians, third country nationals (TCN), or host
    country (HC) personnel).
        Although the JPERSTAT does not provide visibility of
    foreign national or sub-contractor personnel, the Army's
    Logistics Civil Augmentation Program (LOGCAP) contract, which
    is one of the largest contracts in theater, does offer some
    visibility on the magnitude of DOD contractor personnel outside
    of the JPERSTAT process. The LOGCAP contract currently has
    approximately 1,166 TCN, 2,039 HC, and 20,462 sub-contractor
    personnel (includes a combination of TCN, HC and U.S.
    personnel).
        Contractors in support of the CPA provide reconstruction
    and other support in Iraq and protection of CPA facilities and
    personnel. Contractors under CPA contracts have no specific
    reporting requirement to account for contractor personnel
    thereby providing greater flexibility as they organize as
    necessary to perform the contract. However, through the process
    for obtaining weapons permits, CPA reports that approximately
    60 private security companies consisting of about 20,000
    personnel are currently providing security in Iraq.
        There are also private enterprise personnel operating
    outside of the DOD and CPA contract efforts pursuing commerce
    opportunities. As the theater evolves from a contingency
    operation through stability operations to normal Iraqi
    commerce, the role of private enterprise personnel will
    increase. Like other mature countries, the accountability and
    visibility of these private enterprise U.S. citizen contractor
    personnel in the future will reside with the U.S. Department of
    State working in coordination with the appropriate Iraqi
    ministry through the visa process.

        Senator Stevens. I'll now recognize Senator Bond.
        Senator Bond. Thank you very much, Mr. Chairman.
        First, I commend the Secretary and the chairman for your
    great work. I think these have been very difficult times. The
    leadership that you are providing is absolutely essential to
    support our troops and the private contractors who are engaged
    in a very important mission, and we are grateful for that.
        I will have a lengthy statement for the record that
    somebody may wish to read, but I will feel better for having
    submitted it, because I have some strong views that I will
    include in it.
        [The statement follows:]
               Prepared Statement of Senator Christopher S. Bond
        Secretary Rumsfeld, General Meyers, Mr. Lanzillotta, thank you for
    appearing before the committee this morning. We meet under challenging
    circumstances by any measure. Military operations in Iraq and
    Afghanistan coupled with the nation's ongoing global war on terror
    demand our constant attention and focus.
        The Abu Ghraib prison investigation that has demanded much
    attention recently has only added to the workload unfortunately. I have
    read Major General Antonia Taguba's report and concur with statements
    made by Major General Taguba; that the abuses at Abu Ghraib represented
    a total breakdown in supervision, training, discipline and leadership
    and were exacerbated by a shortage of trained personnel. The abuses at
    Abu Ghraib that have been documented so vividly are not reflective of
    the United States military that American's have come to revere and
    respect.
        As was viciously portrayed by yesterday's Al Qaeda video showing
    the beheading of an American civilian and non-combatant, Nick Berg; our
    enemy is the terrorist who targets innocent civilians and the terror
    organizations and regimes who support terror as a legitimate political
    tool. The beheading of Nick Berg is another wake-up call for all of us.
    I am getting this sense, particularly in the wake of the Berg killing,
    that we should be careful to manage the prison issue, and not overdo
    it. Berg's murder demonstrated the stark contrast between the
    wrongdoings at Abu Ghraib and the evil evident in the beheading of a
    non-combatant civilian. We are once again reminded of the true nature
    of the enemy and why we are fighting them. Unfortunately I fear the
    continued political rhetoric here at home will have a detrimental
    impact on troop moral. We need to focus our energies on the war on
    terror, which we cannot afford to lose.
        Recently, I received the United States Department of State's annual
    report, Patterns of Global Terrorism for 2003. The report reveals that
    the year 2003 saw the lowest annual level of terrorist attacks since
    1969 which indicates that much progress has been made in combating
    terrorism. Almost 70 percent of the senior al-Qaeda leadership, and
    more than 3,400 operatives or associates, have been detained or killed
    in over 100 countries. The global war on terror is not over, nor will
    it be anytime soon. That is why we must focus our energies on winning
    this battle. As was stated so clearly by a DefenseNews article,
    Repercussions of Failure, April 19, 2004,

        ``A successful campaign by insurgents to drive coalition forces
    from Iraq would constitute a shattering blow to the U.S.-led global war
    on terrorism and jeopardize governments that have cast their lot with
    Washington, according to U.S. officials and Arab analysts. `The price
    of failure in Iraq would be catastrophic,' one senior U.S. State
    Department official said. `Anything that defeats the expression of U.S.
    and allied power against terrorism will create the impression of
    weakness that terrorists worldwide will exploit.' ''

        The Administration has indicated that it will forward a $25 billion
    supplemental request for the incremental costs associated with ongoing
    operations in Iraq and Afghanistan. I understand the defense
    appropriations subcommittee will hold a separate hearing on the
    supplemental. I look forward to reviewing the administration's request,
    and will work with Chairman Stevens and Senator Inouye in providing
    whatever funds and resources are necessary to support our warfighters
    and the global war on terror.
        The reliance on our National Guard and Reserve forces to prosecute
    the war on terror is increasing. I understand Secretary Rumsfeld is
    working with Lieutenant General Blum, Chief of the National Guard
    Bureau and the Reserve Chiefs, to improve the predictability of
    mobilizations for our nation's Reservists while re-balancing the active
    duty-reserve force mix so as to improve the overall capabilities of our
    military. As a co-chair of the Senate National Guard Caucus, along with
    my colleague Senator Patrick Leahy, I am committed to working with the
    Department of Defense to improve the capabilities of the National Guard
    and its ability to support the nation's military strategy. Were it not
    for congressional increases in accounts such as the National Guard and
    Reserve Equipment Account I am certain that the gap in capabilities
    between the active component and the Reserve component would widen.
        Additionally I am concerned about the rising cost of modern weapons
    systems as exemplified by aviation programs. Unconstrained cost growth
    in the F/A-22 has limited the number of platforms available to fully
    equip our aviation units under the current congressionally mandated
    cost caps. The troubling cost growth in the F-35 so early in the
    program threatens to duplicate the lesson of the F/A-22. The Army's
    decision to cancel the Comanche light attack helicopter program further
    illustrates what awaits a program that is unable to control costs. We
    should not be held captive to rising and unconstrained development
    costs. This is why I support a competitive industrial base through the
    continued production of a limited number of F-15 aircraft so that the
    warfighter, and the taxpayer, will have an alternative should the
    desires of the U.S. Air Force not be met because of limited resources.
        The need to transform the force while executing the global war on
    terror is not an enviable task. It has been acknowledged that the
    Department of Defense has an inordinate tail to tooth logistical load.
    Unless we reverse this, our ability to field an efficient fighting
    force will suffer. If segments of the bureaucracy within the Department
    of Defense are not responsive to the needs of the warfighter then they
    should be replaced, disbanded or its functions transferred to the
    civilian sector. In my effort to improve military mail operations and
    Voting Assistance Programs I have come to understand how a sluggish and
    unresponsive bureaucracy can impact negatively support to our forces.
    That is why I recently wrote to Secretary Rumsfeld to ascertain why the
    recommendations of the Military Postal Service Task Force to out-source
    some, or all, of MPS functions were not carried out.
        Secretary Rumsfeld, General Meyers, our forces rely on your
    leadership for their welfare and on the Congress for the resources
    necessary to sustain a vibrant and effective fighting force. This is a
    partnership that must flourish if our forces are to have the optimum
    tools necessary to carry out their mission. We have the best fighting
    force in the world. Our military forces deserve leaders and policy
    makers who will put their welfare ahead of political or personal gain.

                     REBALANCING ACTIVE AND RESERVES FORCES

        Senator Bond. Senator Cochran has already asked about the
    OPTEMPO and increasing reliance on the Guard. As co-chairman of
    the Guard Caucus, I'm very proud of the what the National Guard
    is doing in answering the call to duty.
        And I'd like to ask your comments on, How is the review on
    re-balancing the forces, adjusting the mission and the force
    structure--how is that progressing? And what is necessary from
    this committee and this Congress to support our troops--not
    just Guard and Reserve, but all of our troops--in seeing that
    they can win a war which, once again, yesterday, we were
    horribly reminded is a war against the forces that would
    destroy civilization, that depend upon and act with pure evil
    intent?
        Secretary Rumsfeld. Senator, I would characterize broadly
    the process of re-balancing the Guard and Reserve and the
    Active components with the Reserve components as progressing
    quite well. In fact, I've been quite impressed with the speed
    that the--particularly the Department of the Army has
    demonstrated in addressing it. And, of course, the Army is the
    biggest place that this needs to be done. And they've been
    addressing it with a good deal of, I thought, excellent work,
    and the process is underway. They're doing that, simultaneously
    with the task of increasing their combat capability from 33
    brigades to 43 brigades, and moving to a more modular approach,
    and all of that takes time.
        We've overused military police. We have overused certain
    civil affairs Reserves and Guard because of the way the total
    force was structured. That's being shifted, and it'll take, I'm
    going to guess--oh, goodness, it'll probably take 2, 3 years, 4
    years, to get it done. David Chu, is that about right?
        Dr. Chu. Yes, sir.
        Secretary Rumsfeld. But we've got a good start on it.
        Senator Bond. One of the things that pundits are raising is
    the problems that they see coming down the line with
    recruitment and retention. I've heard, anecdotally, some very
    good news on those subjects. What do you see, from the
    Department level, about recruiting and retention?
        Secretary Rumsfeld. Well, I look out there, and it's foggy,
    it's blurred. I'm worried. On the other hand, the data we get
    is very positive. We are clearly retaining and recruiting the
    skill sets we need in the Armed forces. And that is enormously
    encouraging. I have no idea how fast that could drop off. And
    we have to constantly try to refine our ability to look out
    there and to take steps in advance.
        For example, when we had to extend some Guard and Reserve
    people beyond the 365 days in Iraq to another 90 days because
    of the situation on the ground, we didn't want to do it. But
    General Abizaid said he needed an additional 20,000 forces. We
    said, ``Fair enough. What's the best way to do it?'' And that
    was the best way to do it. But we immediately stepped in and
    provided some compensation for those individuals, who served
    various portions of 3 months.

                                  MAIL SERVICE

        Senator Bond. Mr. Secretary, I appreciate that. I know you
    wouldn't be satisfied if I didn't raise one issue that I
    brought to your attention before. It has to go to morale. It is
    the question of military mail delivery. We've discussed this on
    many occasions. I know you have many other issues of great
    importance, like protecting lives, feeding our troops and
    providing munitions. But I understand this is a very real
    concern to the men and women over there. And having some
    personal interest in that, as well, to which I confess, I
    wonder if you had looked at outsourcing some of the mail-clerk
    functions in working with the U.S. Postal Service to assure the
    mail delivery is improved.
        Secretary Rumsfeld. I have not looked at that. I know that
    the subject of mail delivery is, as you point out, an
    enormously important one, and that the services and the Central
    Command have all been working on it. I know they've even
    particularly looked at it from the standpoint of the
    difficulties they had with respect to all the elections that
    are taking place this year. And coming over in the car, David
    Chu briefed me that they have been working the--Department of
    Defense has been working with the Postal Service to try to find
    ways to improve that, and believe they've made progress.
        General Myers. The reports I've seen, Senator Bond--and
    I've seen--I get reports from time to time--shows that it's
    getting better. I don't think it's where it needs to be yet,
    and we have to continue to find ways to--but, you know, when I
    was commander of U.S. forces in Japan, a fairly mature theater,
    in the mid-1990s, we still had problems over there because of
    just handling procedures, where all the mail would go into
    Narita, and then it had to be brought to Yokota, and then it
    had to be--and so it was--we were constantly working that
    problem. It's obviously a worse situation in Iraq, and we've
    got to find ways to work around that. And it's critical to
    morale. We understand that.
        Secretary Rumsfeld. They also have tried to find locations
    where they could put phones and computers for e-mail access,
    which is a part of the problem, and that's been working well.
        Senator Bond. Thank you.
        Senator Stevens. You should revive the V-mail. We used to
    get V-mail. It would all go to one place, and then be sent by
    telegram, and then they'd package it up on the other end. Isn't
    that right, Dan?
        Our next----
        Senator Leahy. It's called the Internet now, Ted.
        Senator Stevens. Senator Durbin.
        No, it--e-mail is something different, because they would
    take your letter that your mother wrote you, and they'd put it
    into a telegram and send it over, and they kept the mother's
    letter. It was a different thing.
        Senator Durbin.
        By the way, you're not that old, anyway.
        We're going by seniority, then, Senator Feinstein, you're
    first, if you'd wish to yield to her, Senator Durbin.
        Senator Feinstein.
        Senator Feinstein. That's very generous. Thank you.
        Thank you very much, Mr. Chairman.
        I have just one quick question on Abu Ghraib for General
    Myers, if I might, because I think it needs to be cleared up.
    General Taguba testified yesterday, and let me just quote,
    ``Failure in leadership from the brigade commander on down,
    lack of discipline, no training whatsoever, and no supervision
    were the root of the problem.'' My question to you is, What
    have you done to remedy this problem? If you could specifically
    speak to each of those--lack of discipline, no training, no
    supervision.
        General Myers. On the discipline issue, quite frankly, what
    was done was to replace the unit and put a unit in there that
    was a better unit. And I hate to get into more specifics,
    because it then starts to prejudice any action you may want to
    take against any of the----
        Senator Feinstein. I'm not asking you for that. I'm asking
    you for the remedy.
        General Myers. The remedy was another--the immediate remedy
    was another unit, to put another unit in charge. This was, as
    the Taguba report--now everybody has read it--this was a unit
    that had issues with just adhering to the Army's standards.
    Their uniform--they didn't have standardized uniforms, they
    were allowed to carry guns in their civilian clothes when they
    were off duty, they had things written on their cap, they
    didn't particularly want to salute. This was a unit that had
    those exact--so the first thing you do is, you replace the
    leadership of the unit. They have done that.
        Now, the Army Reserve and the Active Army, there are other
    investigations and looks going on. General Helmly, the Chief of
    the Army Reserve, is looking at other Reserve units to work the
    training issues and the discipline issues to make sure
    everybody's compliant with Army standards. So that process is
    underway. We have not seen that review. We should get a
    midcourse report on that here fairly shortly, and we'll be
    happy to share that, because that's part of it. And that will
    deal with both the training and the discipline part.
        And then the last part you said was--you had----
        Senator Feinstein. Supervision.

                                     ABUSE

        General Myers. Supervision, right. And there are a couple
    of things going on in that regard. I think the General Helmly
    Report will help. There's also the General Fay look at the role
    that military intelligence played in this whole business, and
    in detainee affairs. General Fay is looking at that. He's been
    in Iraq. He's now in Germany. Part of the issue is that the
    folks that he wants to talk to are now scattered. They're no
    longer in Iraq. They're either in Germany or they're back in
    the United States, or perhaps other places. So it'll take him
    some time to go through that. We'll be getting an interim
    report from him, as well. I'm sure the Secretary will make that
    available if required. But that's what we're doing to remedy
    those problems.
        Senator Feinstein. And do you personally look at autopsy
    reports of detainees who die in custody?
        General Myers. No, I do not. What I look at is--I am--I
    look at the allegations of abuse, and I look at what is being
    done to investigate and correct the situation. I do do that.
        Senator Feinstein. Just a suggestion, it might be a good
    idea.
        General Myers. Well, I do--I see--I mean, I see the
    reports. I wouldn't call them autopsy reports. I see the
    allegations of abuse. Usually in there is a description of the
    abuse. I wouldn't call them autopsy reports, but I see the
    words that talk about the type of abuse and the effect it had
    on the individual.
        Senator Feinstein. Right. I'd like to ask you--because
    we've talked about this privately--I'd like to ask you a
    question about the heroin--or the opium poppy production in
    Afghanistan. And you've been very kind, you've reported back to
    me, and I appreciate that. But I want to indicate my very deep
    concern about the fact that tens or even hundreds of millions
    of dollars have flowed from illegal heroin trade directly into
    the hands of terrorist organizations, like al Qaeda. And today
    Afghanistan is producing more poppy than ever. About 75 percent
    of all of the heroin sold in the world is being produced today
    in Afghanistan, $2.3 billion. It's my understanding that an
    early harvest has produced as much as a 50 to 100 percent
    increase in production from the 2003 estimates.
        Now, here's my question. Are we protecting warlords in
    Afghanistan who are growing poppy or producing heroin? Are we
    holding back on eradicating crops for political reasons? So
    what is the reason for the absence of military force to
    eradicate the opium poppy in Afghanistan?
        General Myers. Senator Feinstein, as we've discussed, and I
    think you're focused on a very important issue--and I traveled
    to Afghanistan--and now it's about 3 weeks ago, I guess. When I
    talked to our Ambassador there, Ambassador Khalilzad, and our
    military personnel, and the Ambassador's staff, they described
    this issue as one of the big strategic issues for the future of
    Afghanistan. As you know, the United Kingdom has the lead,
    and--overall, for the international community, to deal with
    this. The State Department has the U.S. Government lead for
    this. I think what needs to be done is, we need to hear from
    the Ambassador what kind of plan he would put in place to deal
    with this effectively, and then we have to resource it. It's
    going to require additional resources to what we have in
    Afghanistan today. And I'm not talking now just with military
    resources, but my understanding is we're going to need a lot
    more of the type of resources that deal with drug issues, Drug
    Enforcement Administration (DEA) and others. And I think we'll
    be hearing from the Ambassador on that, if they haven't
    already, because we had a long talk about that when I was
    there, based partly on our conversations, because that was--it
    is a critical issue.
        On the issue of warlords, I don't know that you can say one
    way or the other. You'd have to guess, though, that probably a
    lot of the warlords, or some of the people they support, are
    involved in this. And that's why it's going to take more
    resources to work this issue and come up with policies to work
    this issue. That's a guess on my part. I have not--I'd have to
    go back and research the intelligence. I'm sure there are some
    that have to be involved. That's a way of life for some of
    them, and you just have to assume it is.
        Senator Feinstein. Thank you.
        Mr. Secretary, could I ask you a quick question? Last----
        Senator Stevens. This will be the Senator's last question.

                        ROBUST NUCLEAR EARTH PENETRATOR

        Senator Feinstein. Is my time--last question, I'll be fast.
    Last year, I asked you, at this hearing, about the robust
    nuclear earth penetrator, and you told me it was just a study.
    Since that time, it's changed rather dramatically. The
    Congressional Research Service (CRS) reports that the
    administration's budget calls for spending $485 million over
    the next 5 years just on the robust nuclear earth penetrator.
    And the report says, and I quote, ``The study is examining
    feasibility and cost, yet the 2005 request seems to cast
    serious doubt on assertions that the robust nuclear earth
    penetrator is only a study,'' end quote.
        In light of this, are you still going to say to us that
    this is just a study, or is the administration intent on the
    development of a nuclear earth penetrator?
        Secretary Rumsfeld. A decision to go forward with a earth
    penetrator has not been made. A decision to determine whether
    it's possible to have one that could help solve some potential
    problems has been made. So that work is going forward, and the
    money has been requested of Congress.
        I don't--what I can do is--I don't believe the studies have
    produced the kind of information that would enable one to say,
    at this stage, that the development should go forward. But,
    clearly, with the amount of underground activity that exists in
    the world--and it's pervasive in country after country, that
    people have tunneled underground--North Korea is a perfect
    example, certainly Iran is, we have found this in country after
    country. And the question is, If that is a problem, what might
    be done about it? Your first choice would be to find some
    obviously conventional way to do it. They've looked and looked
    and looked, and this additional way is, at least in my view,
    worth studying. And at that point where it migrates over into a
    program, clearly the Congress would know and would have to make
    a decision on it.
        Senator Feinstein. Would you permit me just one quick
    comment? Since we got into this, I've done my own study and
    talked with physicists, and what they tell me is, there is no
    known casing that can get a device deep enough--which would
    have to be between 800 and 1,000 feet--to prevent huge nuclear
    fallout. I'll just leave you with that.
        Secretary Rumsfeld. Maybe we ought to hire them.
        Senator Feinstein. Sidney Drell, physicist, Stanford
    University.
        Secretary Rumsfeld. Right, I know who he is. Right.
        General Myers. Mr. Chairman, Senator Feinstein, if I may,
    just one more comment. There is a lot more that Central
    Command--I talked about the general problem--there's a lot more
    that Central Command is doing, in terms of funding and in
    instructions to the troops in Afghanistan that I'd like to
    provide you for the record, if I may.
        Senator Feinstein. I would appreciate that.
        [The information follows:]

        [Deleted].

        Senator Stevens. Thank you very much, General.
        I'm going to go out of order and recognize Senator
    Hutchison. I understand she has a problem.
        Senator Hutchison, you're recognized for 5 minutes.
        Senator Hutchison. Oh, thank you, Mr. Chairman.
        Mr. Chairman, I want to add a story to the one that General
    Myers told at the beginning of this hearing, and it is one
    about which I know personally.
        Senator Stevens. Pull your mic up, please, Senator. Just
    pull it toward you.
        Senator Hutchison. Okay.
        Senator Stevens. They're all live.
        Senator Hutchison. I want to----
        Senator Stevens. All these mics are live.
        Senator Hutchison. Okay. I want to add to your story,
    General Myers. I went to college with a friend who was a great
    football star at the University of Texas. He had one son. We
    all thought he would follow his father's footsteps to the
    University of Texas. But he only had one dream. The son wanted
    to go to the U.S. Naval Academy. And because he was so
    qualified, I was proud to give him my appointment.
        That young man, a marine, participated in the march to
    Baghdad, came home. He is now back in Iraq, somewhere around
    the Fallujah area, doing his job, and wrote me a note saying,
    ``Thank you, Senator, for giving me the opportunity to do
    this.'' So I do hope that we can put those and the stories of
    Pat Tillman out there when we are going through this very hard
    and difficult time.
        The second thing I want to point out, that has been stated
    in the media and by others, there continue to be questions
    about whether al Qaeda and the war on terrorism are really
    connected to Iraq. Well, I think we found out yesterday--and
    something you added to today, General Myer--that an al Qaeda-
    connected animal perpetrated a heinous crime on videotape in
    Baghdad, because the body was found there, unfortunately.
    Similar atrocity in Pakistan to a journalist named Danny Pearl,
    videotaped. That reporter was reporting on al Qaeda at the
    time.
        So I think if anyone is going to question whether the war
    in Iraq or Afghanistan, either one, are connected to the war on
    terrorism and all these loosely affiliated organizations, that
    they're answering that question for us as we speak.
        I wanted to ask a question, and Senator Feinstein made
    several of these points, but there was one other, and that is
    regarding the prisons. One of the other reasons, or allegations
    made, was that there weren't enough guards to guard the number
    of people who were in those prisons. You, Secretary Rumsfeld
    and General Myers, and others in this administration, started
    looking at this situation apparently the very day you heard,
    which I think you should be commended for doing. So you have
    had the investigations, which started in January. Have you
    determined that there are enough guards now? Has that situation
    changed in any way? Or if that's not appropriate to answer
    whether it's changed, do you feel that you have the funding or
    the facilities and the number of guards needed to meet our
    standards in the treatment of prisoners in Iraq, Afghanistan,
    Guantanamo Bay, or anywhere else that we may be needing to
    hire--to watch, guard, and interrogate, properly, prisoners?

                              TROOPS IN ABU GHRAIB

        General Myers. To go back to the beginning, we were in a
    closed hearing yesterday in front of the House Appropriations
    Committee, Subcommittee on Defense, and General Taguba was with
    us, and the question was asked, Did the--you know, how many
    troops did we have in Abu Ghraib, at that time, providing
    security in detainee operations? And he said, ``Well, they
    didn't have enough at the time, but the brigade could have
    reallocated some of their forces to that situation, which was
    not done.''
        From what I know today--and I'll probably have to get you
    an answer for the record--but from what I know today, that
    situation has been corrected. We have made a lot of corrections
    over time, over the last couple of months, to ensure that the
    folks that are responsible for detention operations have the
    people they need to do the job. But I'll double-check, and I'll
    give you an answer for the record on that.
        [The information follows:]

        As of May 28, the number of MP guards vice detainees in Abu
    Ghraib prison was 450 to 4,561 or approximately a 1:10 guard to
    detainee ration.
        As of June 22, the number of MP guards remains the same
    with 450 guards, but the number of detainees is now 2,262 or
    approximately a 1:5 guard to detainee ratio.

                           MANAGING DETAINEES IN IRAQ

        Senator Hutchison. And do you have the facilities that you
    need at this time for the number of prisoners we have----
        General Myers. I think----
        Senator Hutchison [continuing]. And the number of guards?
        General Myers [continuing]. I think, for the most part, we
    do. Now, we have--I think--yes, ma'am, we do. We have--right
    now. But, you know, these are--this is a continuing issue,
    where we get reports from the International Committee of the
    Red Cross, of our own commanders looking at the situation, so
    it's a matter of continuing improvement, which is appropriate,
    and would have to change over time. But the situation that was
    described in the Taguba report that he saw in the January/
    February timeframe, those have been corrected.
        Secretary Rumsfeld. May I just add that over the period of
    time in Iraq, some 43,600 people have been captured and
    detained for some period of time. Of those, 31,800 have been
    released. And the remainder currently detained is about 11,800.
    That is not a fixed population. It's constantly changing. There
    isn't a week that goes by that our forces don't scoop up, you
    know, 4, 5, 6, 8, 10 a day and move them into one of the
    detention centers. And, simultaneously, there's a process, as
    you can imagine--if we've already released 31,800 out of
    43,000--our goal is to get as many out of there as fast as we
    can, as soon as we believe that's the appropriate thing to do.
    There's no one in the United States Government who wants to be
    a jailer and hold people that we don't need to hold.
        So there's constantly a group coming in, and constantly a
    group going out. And currently the population is about 11,000.
        Senator Hutchison. Thank you.
        Thank you, Mr. Chairman, for----
        Senator Stevens. Thank you very much.
        Senator Dorgan is recognized for 5 minutes.
        Senator Dorgan. Mr. Chairman, thank you very much.
        I regret I was not here at the first part of this hearing.
    But I welcome the Secretary and General.

                         FISCAL YEAR 2005 RESERVE FUND

        Let me ask a question, if I might, about the $25 billion.
    And I understand that you've been asked some questions about
    that. There was a piece in the newspaper today, here on the
    Hill, that said that the Senate majority leader's senior staff
    was saying that there's a school of thought that Congress
    should double the administration's request to amend its 2005
    budget request by $25 billion, and so talking about increasing
    it from $25 to $50 billion. I understand the request has not
    even yet been made. So what I'm trying to understand a bit here
    is, the $25 billion that has been discussed that I think the
    chairman will ultimately hold a hearing on, is that money that
    relates to this current fiscal year, or is that a reserve fund
    for the next fiscal year?
        Secretary Rumsfeld. The answer, sir, is that the White
    House, the Office of Management and Budget, the leadership in
    Congress in the House and Senate, and in the Appropriations
    Committees are currently debating that. What they're doing is,
    they're, at the moment, calling it a reserve, and the number
    is--that the President proposed was $25 billion. And that was a
    judgement that that would be appropriate to move us until such
    time as a full 2005 supplemental could be passed by Congress
    sometime next year, after Congress gets back, reorganizes, and
    acts on it, probably sometime in the April period.
        You want to say--I can't read your writing, I'm sorry.
        Mr. Lanzillotta. Yes, Senator. It was based on what we
    thought to alleviate the risk, or reduce the risk, in cash-
    flowing the service operation and maintenance (O&M) accounts
    for that period of time that the Secretary talked about.
        Senator Dorgan. For what period of time, now?
        Mr. Lanzillotta. Well, from the period of time from October
    1 until the Congress could act on a supplemental request. So we
    looked at our spend rates, decided that this reserve account
    would help us reduce our risk of cash-flowing those accounts,
    to have the services avoid reducing training or other type
    activities.
        Senator Dorgan. If I might ask, the $60 billion that we
    previously appropriated was expected to last until a request
    would come in next January, so that would have been money that
    would have been available through this fiscal year, into the
    next fiscal year, is that correct?
        Mr. Lanzillotta. No, Senator. The money--the $65 billion
    that was appropriated, that was for fiscal year 2004. That
    money was never intended to last past October 1.
        Senator Dorgan. So money for the costs of the prosecution
    of the war in Iraq, and also activities in Afghanistan, would
    have come from the regular Pentagon budget from October 1 until
    some subsequent date, when the Congress would pass another
    emergency supplemental, is that the case?
        Mr. Lanzillotta. What the intent was--that we would cash
    flow the accounts and put a supplement request in to cover
    those costs.
        Secretary Rumsfeld. The way I think of it is this, that we
    were, in effect, asked by the Congress not to try to guess what
    the war would cost and put it in the regular budget, which, of
    course, the regular budget for 2005 was prepared last year, and
    then submitted to the President in December, and then to the
    Congress in February, and now we're into May, and it's for the
    period starting October 1 for a whole 'nother year. So there's
    no way to look into that future well, or precisely. And so the
    judgement was made not to budget for it, but to come in with a
    supplemental.
        From a management standpoint, it is very tough on the
    Department of Defense. When the world changes, as it has, we
    have the higher level of forces there, it's a more difficult
    situation, and, therefore, the amount of cash flowing that
    would have to take, taking money out of money account, sticking
    it into another account, has grown. And we looked at it, and
    the President did not want to go up and ask for a $25 billion
    reserve, but I went to him, as I have to, and told him the
    truth, and the truth is, we need the money if we want to reduce
    the amount of cash flow, robbing Peter to pay Paul and then
    trying to correct it at the end.

                      BUDGETING FOR CONTINUING OPERATIONS

        Senator Dorgan. Well, I would expect everyone on this
    committee would feel that we don't want to withhold $1 that is
    necessary for the safety of the troops that we've put in harm's
    way. Whatever is necessary to protect them and provide for
    them, that which we think is important for them, we want to
    provide. But you indicated that you felt that the Congress had
    asked that you not include these funds in the regular
    appropriations request. I mean, my own feeling is, it's been a
    bit frustrating, because we get the budget, and the budget for
    the Department of Defense has zero in its request for Iraq and
    Afghanistan. We know that there are ramped-up, continued
    operations that----
        Secretary Rumsfeld. Right.
        Senator Dorgan [continuing]. Will be there for some long
    while. And I understand there is a need, and will be a need,
    for emergency supplementals, but I would--I think it would make
    more sense, at least in the regular budget process, as well, to
    recognize we're at a different level here, and these routine
    and--not routine; I shouldn't say--the continuing operations in
    Iraq and Afghanistan ought to be at least accounted for, in
    some measure, in the regular budget process.
        Secretary Rumsfeld. It's a fair comment. And I felt that
    way, as well, 2 years ago, and tried to do it. And we were in
    Afghanistan at that time, and it was clear that it was going to
    cost some money, so we proposed $10 billion, and the Congress
    rejected it all, 100 percent of it, and said--now, here's the
    tension, the dilemma. The earlier you ask for the supplemental,
    the less you know, and the less precise you can be. And,
    properly, Senators that have the responsibility for managing
    the taxpayers' money look at it and say, ``Well, it's not very
    precise.'' And that's true. And the later you wait for a
    supplemental, the greater knowledge you have, the more precise
    it is, but the longer you've passed the time when you have to
    begin doing this cash flowing and taking money out of here and
    putting it in there. So the cycle is so long--the budget
    cycle--when we have to prepare this last year, get it to the
    President, get it up here, for a year that doesn't start until
    October 1, it's just a difficult problem.
        Senator Dorgan. Well----
        Secretary Rumsfeld. I could do it either way, myself.
        Senator Dorgan. Yeah, at least speaking for myself, I would
    prefer that we try to recognize we're ramping up to a different
    level and it's going to be continuing for some while, and see
    at least a part of that, to the best extent we can estimate it,
    in the regular process.
        Just one final question. Do I have time for an additional
    question, Mr. Chairman?
        Senator Stevens. No, you don't. Sorry.
        Senator Dorgan. Okay, thank you.
        Senator Stevens. Our next Senator is Senator Specter, by
    seniority.
        Senator Specter. Thank you, Mr. Chairman.

                         ASSASSINATION OF NICHOLAS BERG

        Mr. Secretary, Mr. Nicholas Berg, who was the victim of a
    brutal assassination, as we all know, was a Pennsylvanian. And
    in talking to his lawyer yesterday, I tried to get some of the
    particulars about what happened to him when he was held in
    detention--reportedly initially by Iraqis, and then later by
    U.S. military--and a lawsuit was filed in the Federal court in
    Philadelphia; and shortly thereafter, Mr. Nicholas Berg was
    released. I would appreciate it if you would give your personal
    attention to assist in answering some of the questions which
    the family is now posing as to exactly what happened to him
    during the detention period, why he was detained, and the
    circumstances of his release. The case was never litigated, but
    it was filed.
        Secretary Rumsfeld. Senator, we will be happy to ask
    someone in the Department of the Army probably, and, if not,
    the General Counsel's Office, to focus in on this and be in
    touch with you.
        [The information follows:]

        Due to the fact that a number of different entities, including the
    Iraqi police, had contact with Mr. Berg during his detention in Mosul,
    it is not possible to provide a definitive account of his detention and
    release. Nonetheless, the following is a summary of the facts as we now
    understand them.
        On March 25, the Iraqi police in Mosul detained Mr. Berg for
    ``suspicious activity'' and for his personal safety. He was taken to a
    police office and placed in a spare break room typically used for
    eating and resting, rather than a jail cell. He was placed in this room
    because it was private and cleaner than the cells and because he had
    expressed concern about being in a cell with Arab inmates and guards
    due to the fact that he was Jewish. This break room is located in the
    same building as the Iraqi police office, which is connected to the
    Digala Police Station. Coalition forces, who were present in the Iraqi
    police office to provide assistance to the police, provided Mr. Berg
    with a cot, blanket, and food. The FBI interviewed him later that day
    and took his fingerprints. The FBI interviewed him again on March 26.
        On March 28, Mr. Berg was moved to a cell in Digala Police Station,
    one that the Iraqi police had cleared specifically for him, because it
    was no longer practical to keep him in the spare break room. After he
    was moved to Digala, the Coalition forces' involvement with Mr. Berg
    was minimal, although they did interpret directives to Mr. Berg.
        On April 1, an officer of the Coalition Provisional Authority (CPA)
    informed the U.S. Consular Officer in Baghdad that Mr. Berg was being
    detained by the U.S. military. We note that this information, which the
    U.S. Consular Officer provided to Mr. Berg's family at that time,
    appears now to have been incorrect; it is our understanding that Mr.
    Berg was, in fact, being detained by the Iraqi police. The U.S.
    Consular Officer in Baghdad also notified Mr. Berg's parents that all
    questions about Mr. Berg should be directed to the FBI.
        On April 3, the FBI interviewed Mr. Berg for a third time. In
    addition, the Iraqi police obtained his possessions from his hotel room
    at his request, paid his hotel bill with his money, and stored his
    possessions at the police station.
        By April 4, the Iraqi police were prepared to release Mr. Berg, and
    the FBI had finished interviewing him. FBI, U.S. military, and CPA
    personnel were concerned, however, for his safety in Iraq if he were to
    be released and remain there. On April 6, a CPA officer in Mosul, along
    with a Public Administration Officer of the 416th Civil Affairs
    Battalion posted with CPA-Mosul, met with Mr. Berg and did the
    following:
      --offered to provide him with financial assistance (which he
            refused);
      --asked him to sign a Privacy Act Waiver so that the CPA could
            respond to his parents and his Member of Congress (he refused);
      --counseled him to leave Iraq for his own safety and offered him
            transportation assistance (he said he would go to Baghdad in a
            few days because he wanted to spend more time in Mosul, and the
            assistance we offered would have taken him out of Mosul on the
            next MILAIR [military] flight and then to Jordan in the next
            few days);
      --asked him to check in with the U.S. Consular Officer in Baghdad (he
            agreed);
      --watched him inventory his possessions, taking account of his
            concern that some money was missing; and
      --had him sign a paper confirming that he received the above
            information.
        At that point, Mr. Berg was released from Iraqi police custody. Mr.
    Berg indicated that he would not be leaving Iraq right away because the
    road to Amman had been closed indefinitely.
        At some point between April 8 and April 10, the U.S. Consular
    Officer spoke by telephone with Mr. Berg and offered to assist him in
    obtaining a seat on a charted Royal Jordanian Airlines flight from Iraq
    to Jordan. We understand that he declined that offer and stated that he
    would be traveling to Kuwait with a convoy of journalists. The U.S.
    Consular Officer reminded him of the security risks of traveling in
    Iraq and asked him to call his mother upon arrival in Kuwait. We
    believe that this was the last contact the U.S. Consular Officer had
    with Mr. Berg.

        Senator Specter. I would appreciate it. And there's one
    other request which the family has made. Mr. Berg's body is
    being returned to Dover, and the family would like to meet the
    body on arrival, and they have made a request to be with their
    deceased son. But they are not permitted to come onto the base,
    as I am told, unless there is a waiver. And I would appreciate
    it if you'd take a look at that and see if we couldn't
    accommodate their request.
        General Myers. You bet.
        Secretary Rumsfeld. Be happy to.

                       ASSISTANCE TO IRAQ: GRANT OR LOAN?

        Senator Specter. Mr. Secretary, on the issue of the funding
    in Iraq, when the $87 billion was requested some time ago an
    issue arose as to whether some $10 billion ought to be in the
    form of a loan to Iraq, on the consideration that Iraq has
    enormous oil reserves and enormous potential resources. And it
    is obviously a difficult matter to draw the line on what would
    be appropriate for Iraq to pay for--rebuilding the country, for
    example, or rebuilding their infrastructure. Where we have
    costs of the military operation, that is something different.
    But I think it would be very useful to this committee and the
    Congress if we had an idea, with some particularization, as to
    what money is being spent, and for what purpose, so that we
    could try to make a judgment as to what would be appropriate to
    have paid for by Iraqi resources which are obtained at some
    later date, sort of on the analogy of a trustee in bankruptcy.
    We're a trustee, and there are international aspects of it with
    the United Nations and the World Bank and the International
    Monetary Fund. So it would not be something that we would make
    a judgment on, but at least if we knew what the accounts were,
    we would then be in a position to try to make some
    determination as to where we would like to see some of the
    money in a loan form.
        The President was very insistent on having it in the form
    of a grant, and he met with a number of us, and ultimately we
    made a decision--I did, personally--to honor what the President
    wanted to do, to try to get it done faster in a critical
    period, trying to get other countries to make loans. But as the
    matter progresses and evolves, I think it is something we ought
    to revisit.
        Can you see any of those expenditures at this moment which
    you think ought to be paid for by Iraq, as opposed to the
    American taxpayers? We're getting a lot of comment as we--the
    taxpayers are concerned, as we face a very tight domestic
    budget--as to why those expenses are not being borne by Iraqi
    resources.
        Secretary Rumsfeld. Senator, I recall the debate, and it
    was a perfectly appropriate thing to debate and discuss and
    weigh. The President concluded that ``an amount'' ought to be a
    grant, as opposed to a loan. There were complications, as
    you'll recall, with debt forgiveness and other debts and
    reparation requests from Kuwait for the 1991 war, and the like.
    And he felt that it would be appropriate to take a single
    amount, make it a grant, and use that to help jumpstart Iraq on
    a path towards democracy and recovery.
        No one believes that any additional money should go from
    United States to Iraq for that purpose. For security, yes, for
    the other things that we're doing, to be sure--governance,
    assistance, and so forth. The United States also went out and
    tin-cupped the world and raised additional funds to try to
    assist the Iraqi people, and other countries have been giving
    money, as well as assistance, humanitarian assistance, to Iraq.
        The situation, I'm told--why don't you do it, Larry? Just
    chime in.

                              USE OF IRAQI ASSETS

        Mr. Lanzillotta. If I may, Senator, on Iraqi money, we have
    an account that's called the Developmental Fund for Iraq. It
    was $18.2 billion that's been in that account so far, basically
    from oil revenues. And we've taken out $8 billion, so far, to
    pay for Iraqi needs. And so that leaves a balance of $10
    billion that will be continued to be used to pay for those type
    of expenses.
        Secretary Rumsfeld. But Iraqi oil revenues are paying for a
    part of what's being spent today. Frozen assets that were found
    around the world from the Saddam Hussein regime have been
    retrieved, in some measure, and they are being used. Assets
    that were discovered in the country, caches of money--there
    were hundreds of thousands of dollars with Saddam Hussein when
    he was pulled out of the hole--in that neighborhood, I should
    say. So all of that is going toward this problem.
        Senator Specter. Mr. Chairman, if I may, I want to submit,
    for the record, questions on the Comanche helicopter, the base
    closing issues, as they affect Pennsylvania, the V-22, future
    combat systems, Bradleys, and the M1A1 tank.
        Senator Stevens. We welcome those questions. We do not
    welcome questions----
        Senator Specter. I thank you, Mr. Secretary----
        Senator Stevens [continuing]. Concerning other than----
        Senator Specter [continuing]. And I thank you----
        Senator Stevens [continuing]. Appropriations.
        Senator Specter [continuing]. Mr. Chairman.
        Senator Stevens. Senator Durbin, you're recognized for 5
    minutes.
        Senator Durbin. Thank you, Mr. Chairman.
        Thank you, Mr. Chairman, and thank you, Mr. Secretary and
    General.
        It is unfortunate that a million acts of kindness and
    goodwill and bravery by our troops have been overshadowed by
    the shameful acts at the prison in Iraq.
        I'd like to read to you an excerpt from an e-mail. This
    comes from a career officer in Iraq, and it was received
    yesterday. He wrote, ``I think that any soldier over here with
    any moral clarity is appalled and ashamed by what has occurred.
    Personally, I'm also ashamed of those that attempt to mitigate
    what's happened by saying,' It's not as bad as what others have
    done.' If we're not better than that, then I simply want no
    part in what we're doing. Take away the Weapons of Mass
    Destruction (WMD), the links to al Qaeda, and the singular
    reason for being here was the prospect of disposing of a
    ruthless dictator and bringing democracy to Iraq. And now we
    are all left to simply wonder: At what cost? It seems to become
    clearer every day that this is simply the beginning of the end
    to any chance we may have had to achieve anything of substance.
    June 30 looms, and most of us can see no achievable goal in
    sight. Two-thirds of the Iraqis simply want us to leave as of
    yesterday, and every battlefield success appears to be nothing
    more than a Pyrrhic victory. Nobody wants to compare this to
    Vietnam, but it's starting to feel that way on the ground.
    Everybody just wants to finish their year, get the hell out,
    and forget they were ever here. Finally, I would just simply
    say that the issue here really is moral clarity. As soldiers in
    the Army, it just seems a little implausible to a lot of us
    that 7 to 12 people simply perpetrated unthinkable and
    unconscionable acts over a period of several months without
    knowledge of their superiors. These people will likely be
    punished, and rightfully so. But the question is, Did they let
    us down, or did the Army and their leaders let them down?
    Because everyone knows that the entire chain of command, to the
    very top, holds some level of responsibility for what has
    occurred.''
        Mr. Secretary, I voted against this war believing that we
    needed a broader coalition and better preparation. The decision
    was made to move forward and move quickly without the United
    Nations' support, without giving time for inspection, without,
    I'm afraid, the necessary calculation of the real cost of this
    war. We are now being asked to consider a supplemental at a
    later time here. We have appropriated some $90 billion for the
    execution of this war. And I am told--at least you've
    testified, or General Myers has testified--that force
    protection will be one of the highest priorities.
        But as we look back to the last 14 months, on the issue of
    force protection, there are some very, very unsettling facts.
    Nine months after our invasion, in December of last year,
    nearly 1 year after the forces were deployed to the region,
    more than one-third of our forces still lacked interceptor body
    armor. A friend of mine with a son in a military police (MP)
    unit, he and his wife went out and bought the appropriate armor
    to send to their son to protect him. When we lost a Chinook
    helicopter last year from the Illinois/Iowa Guard Unit, I came
    to learn that the helicopters were deployed in Iraq without
    necessary defensive equipment. And now we learn that perhaps 3
    or 4 months from now, when they're supposed to be returning
    home, they will finally be equipped as they should be.
        And I suppose the worst part of it was the armoring of
    Humvees. It's been estimated that one-fourth of the American
    lives lost were lost because of lack of armor for these
    Humvees, and we still are uncertain as to whether an adequate
    number will be protected in the near future.
        My question is this. Having appropriated all of this money,
    and myself having voted for every penny of it, how can we
    explain that we didn't meet the most basic requirement when it
    came to body armor, helicopter equipment, and armored Humvees
    to protect our troops?

                             DETAINEE ABUSE IN IRAQ

        Secretary Rumsfeld. Let me comment, first, Senator, on the
    statement you made, and then General Myers will discuss the
    force protection issues, because they're very important.
        With respect to what took place at Abu Ghraib, we will get
    to the bottom of it. There are six or seven investigations
    taking place, criminal prosecutions taking place, and people
    will be punished at every level, I can assure you. I know
    there's a--the Uniform Code of Military Justice works, and it's
    operating, and I am confident that the facts will become known,
    and people who did things that were illegal will be dealt with,
    and those that--in the administrative chain that did things
    that were seen to be inappropriate will also be dealt with in
    non-criminal administrative ways.
        Second, the e-mail you read is--I guess it's disturbing,
    but it's not surprising, that an individual feels that way.
        Senator Durbin. A career officer.
        Secretary Rumsfeld. I understand. An individual. Doesn't
    matter to me whether he's an officer or an enlisted person, but
    he feels that way. And I can understand that. And we all go
    through strong emotions when something like this occurs. We see
    it, and we're shocked, and we're stunned, and we're disgusted,
    and we know, in our hearts, we're better than that, and yet
    that is what's being seen in the world as representing our
    country. I know it doesn't represent our country. That isn't
    America. We've got--we're a lot better than that. And it's been
    true over many decades, and it'll be true over decades ahead.
    And the conclusion that that young person came to, that we're
    at the beginning of the end, I submit, will prove to be wrong.
    And, the good Lord willing, I'll be right, and his
    understandable concern and comment and emotional reaction, I
    hope and pray, will be wrong.
        Senator Durbin. Will you address the force protection
    issues?
        General Myers. You bet. I want to start with interceptor
    body armor. The small arms protective insert (SAPI) plates were
    relatively new technology. The Army had decided, earlier in
    this century, in 2001/2002, to provide only to dismounted
    infantry. As we got into 2002, it was clear that was not
    sufficient, so they started to ramp up the production from 1600
    sets per month to now 25,000 sets per month. Currently,
    everybody in theater--military, civilian, contractors, anybody
    who needs that kind of vest with the SAPI plates--has been
    provided that.
        Senator Durbin. General, excuse me.
        General Myers. Yeah.
        Senator Durbin. Fourteen months after the invasions?
        Senator Stevens. The Senator's time for asking questions is
    expired, but we permit General Myers----

                                    HUMVEES

        General Myers. Well, I'm just saying that it was new
    technology, so it took time to ramp it up. I mean, we just--we
    couldn't--as much as we wanted to wish it true and have it
    ready immediately, that just wasn't technically or from a
    manufacturing standpoint feasible. What we're looking at now--
    --
        Senator Durbin. But you weren't prepared, General.
        General Myers. What we're looking----
        Senator Stevens. General----
        General Myers [continuing]. What we're looking at now is,
    the SAPI plates are good, and you know they fit front and back.
    We're looking for other protection now, on the sides and the
    armpits, because there is technology there, and we're starting
    to produce that, to provide those vests, as well.
        Up-armored Humvees, that requirement was set by Central
    Command and by the field commanders. It has consistently gone
    up. We've tried to meet that with lots of different things and
    ways. Currently, they need 4,454 up-armored Humvees. They're
    currently on hand, 3,134. We're producing--we're ramping up
    to--production rate up to 300--in fact, I think we're, this
    month, at 220 to 225 per month. We've gathered all the up-
    armored Humvees from all the services around the world, pushing
    them into theater, only saving a few back here for the nuclear
    security mission, and I mean just a handful. And we also have
    some bolt-on armor that we've made for that, those Humvees and
    the trucks, as well.
        So we've tried to stay up with the demand as the
    requirements come in from the field, and I think we're doing a
    reasonably good job. I would like to have done all of that,
    certainly, if we could have; if it had been physically possible
    to do it all faster, we would have. I will say this, that the
    support we got from the Congress on the funding has not been an
    issue. The funding has been there when we've needed it.
        Senator Stevens. I apologize to the Senator. We still have
    several Senators to go on the first round.
        Senator McConnell is next. You're recognized for 5 minutes.
        General Myers. If I could just follow up that, you also
    asked about helos. The information you provided on the
    helicopters does not correlate with the information I've been
    given on those helicopters--to include, you know, the
    helicopter that was shot down where we lost so many people. My
    information was that it did have countermeasures onboard, and
    that nobody----
        Senator Durbin. That one helicopter was properly equipped,
    but the Army acknowledged that there is a new level ALE-47 that
    was needed. Only five of the 13 helicopters in the unit are
    currently equipped with it. It is said that they will receive
    the equipment in 4 months, which is the time when they're
    supposed to be leaving the country.

                               ACTIVE AND RESERVE

        General Myers. It was--but it's true of Active duty and
    Reserve helicopters, because there was a move at that time, and
    I'll just make sure. I'll check my records, the facts here.
    But, as I recall, that the Army was in the middle of upgrading
    all that Active and Reserve, and that's what they were in the
    middle of, so there are some units that have the newer
    technology, or some that have the older technology.
        Senator Stevens. Okay, Senator.
        Senator McConnell is recognized for 5 minutes.
        Senator McConnell. Thank you, Mr. Chairman.
        After the prisoner abuse revelations over the last few
    weeks, it's easy to lose perspective, and I'd like to begin by
    congratulating you, Mr. Secretary and General Myers and your
    entire operation, for the liberation of 50 million people over
    the last 2\1/2\ years and for extraordinary success in the war
    on terrorism.
        It is no accident that we have not been successfully
    attacked again here at home since 9/11. The reason for that is
    clearly that we've been on offense, at the President's
    direction. And you and the people that you command have done an
    extraordinary job, and it's important to remember that when
    things do go wrong, as they do occasionally in any complicated,
    difficult task.

                                PAYING WAR COSTS

        Now, we're going to have, Mr. Secretary, the Defense
    authorization bill on the floor next week, and one of the
    things I fear is that an awful lot of amendments are going to
    be offered to try to take money away from arguably very
    important tasks that you need to carry out, and direct them to
    Iraq.
        For example, we expect numerous amendments to cut important
    programs such as missile defense in that bill. Over the last
    decade, proliferators such as Iran and North Korea have made
    dramatic and unexpected progress in their nuclear programs. If
    we do not improve our ability to defend America and our troops
    against ballistic missiles, and deter rogue regimes from using
    them against us, by modernizing our weapons systems to hold
    their deeply-buried nuclear or command and control facilities
    at risk, we're likely to face a far greater danger than that
    which reared its head on September 11. So I have a couple of
    questions in that regard.
        Would it be appropriate to reduce funding for important
    programs in your fiscal year 2005 bill in order to pay for
    operations and maintenance costs that the Department plans to
    fund in an upcoming request for a contingency reserve fund?
        Secretary Rumsfeld. We've made a judgment, Senator, that
    the cash flowing for a long period is a bad management
    practice, and that to the extent the amount is large it becomes
    a very bad management practice.
        In terms of the separate--therefore, we came up--despite
    the fact the President didn't want to--when I went in and told
    him I believed we needed $25 billion, he has made that proposal
    as a reserve to reduce the damage, reduce the difficulties, the
    management difficulties, that otherwise would have occurred.
        The second question, as to whether we should simply take
    money from one important account and put it in another and
    change our priorities, my strong recommendation is that the
    Congress not do that. The idea that we were asked not to fund
    for the war in the budget, we allocated the budget, we're now
    at a point where we believe that the priorities that have been
    established in that budget are sound, they enable our country
    to address the global war on terror, to see that the Armed
    Forces of the United States are the most capable and most
    deployable and best equipped on the face of the Earth, and I
    don't think we ought to try to fund the war out of the
    priorities that help rearrange our military for the 21st
    century.
        Senator McConnell. When I was in Iraq in October, I was
    meeting, it won't surprise you to know, with General Petreas in
    101st, since they're headquartered in my home State. And he
    indicated that the reconstruction funds, which you and, I
    think, Senator Specter were talking about earlier, were
    extremely important to the success. And one of the things I
    fear next week is that we may have amendments transferring
    money out of the reconstruction fund, which we fought very hard
    to make sure was a grant and not a loan, to help pay for the
    military side of this. Do you share my view that the
    reconstruction is extremely important in allowing us to
    ultimately exit the country?
        Secretary Rumsfeld. I do.

                         TRAINING IRAQI SECURITY FORCES

        Senator McConnell. And, also, I'm curious--I know you've
    sent General Petreas back to be in charge of the upgrading of
    the Iraqi military. I want to commend you for that decision. I
    don't think you could have picked a better person to do it. But
    I would like to kind of get a report on how that's going and
    this whole challenge of getting the Iraqi military up to speed,
    which we all know is the best way to ensure our exit at some
    time in the future.
        Secretary Rumsfeld. Indeed. From the beginning, we've
    focused on strengthening the Iraqi security forces. They, for
    all practical purpose, had dissipated and didn't exist. The
    police that were there were not the kind of police we have in
    our country; they're the kind of people that went and arrested
    people at night and threw them into prison. The military was a
    mixture of some, I don't know, how many thousand generals,
    mostly Sunni generals, and the large mass of Shia conscripts,
    that just dissipated into the villages and towns of the
    country. So we had to start pretty much from scratch.
        We're up to about 206,000. You see reports in the press
    that, in some cases, they didn't do a great job. They, some of
    them, didn't engage the enemy in certain circumstances. Well,
    my goodness, if a group of people had been trained for a few
    weeks, and they're poorly equipped, and they're going up
    against people with AK-47s and rocket-propelled grenades,
    they're smart not to. And they're doing pretty darn well. And
    General Petreas is the right person to go in there and work
    this problem.
        And we're going to go from 206,000 to 265,000, we're going
    to continue to improve their equipment, we're going to continue
    to improve their training and their chain of command, and that
    is, as you say, who we have to pass off security responsibility
    for that country too. We've got to make that work, and then
    we've got to pass it off, and we don't have to stay and do that
    job for the Iraqis. The Iraqis have to do that job.
        General Myers. If I may, Senator? Let me just----
        Senator McConnell. Yeah. General?
        General Myers [continuing]. Just add something. When I was
    in Iraq 3 weeks ago, approximately, I looked at the line items
    of the types of equipment needed by Iraqi security forces. I
    think it's the first time that we've had specifically the types
    of equipment needed, on contract, starting to deliver--this
    month, matter of fact--to make up for that equipment problem
    that we talked about, that, for a variety of reasons, to
    include challenged contracts and, in fact, people just not
    writing down the requirement, that is fixed, and we should see
    these Iraqi security forces, from the police to the new Iraqi
    army now, begin to receive the type of equipment that will
    allow the things that the Secretary said needs to happen,
    happen.
        And, if I may, let me go back to your previous question,
    where you talked about using other accounts to pay for the
    operations and maintenance. As you know better than anybody,
    one of our traditions--and all of us--I'd put all of us in this
    group--is that we raid procurement accounts when we're short on
    operations and maintenance, and readiness, and so forth. We
    have had procurement holidays. We do not need to do that. We
    have a chance to transform our military, and the thought of
    raiding particularly the procurement accounts to make up for
    maybe shortfalls in other places, I would think, would be a
    very, very bad idea for the future of our Armed Forces.
        Senator McConnell. One final question, if I have time, Mr.
    Chairman.
        Senator Stevens. You don't have the time, Senator. I'm
    sorry.
        Senator McConnell. Okay, I don't have time. Thank you.
        Senator Stevens. Senator Shelby.
        Senator Shelby. Thank you.
        First of all, Mr. Secretary, I want to thank you, as others
    have, for your service, and also General Myers, for your
    leadership. And I want you to continue doing that, and I
    believe you will. I have confidence in you.
        I've got a couple of questions, and I'd like to get into
    dealing with the budget.
        I believe, first of all, Mr. Secretary, that the Army is
    underfunded, given the overwhelming role that they're playing
    in Iraq and Afghanistan. The issue that causes me some concern
    here today is reset. The Army is struggling to sustain and
    maintain its equipment. The 2005 budget, according to the
    Army's own documents, only includes 72 percent of the regular
    depot maintenance funding requirement. The 2005 shortfall is
    compounded by the severe toll that Operation Iraqi Freedom
    (OIF) and Operation Enduring Freedom (OEF) are taking on the
    Army's equipment.
        Mr. Secretary, first to you, and then to General Myers, Do
    you support the Army's reset plan, and do you believe it's
    properly resourced?

                             RESTRUCTURING THE ARMY

        Secretary Rumsfeld. We're told by the Army that they
    believe it is properly resourced. What it will require is that,
    over the supplementals this year and next year and possibly 1
    year into the future, the funds need to be made available to
    allow the Army to have a higher level of forces so that they
    can rearrange it and pull division capabilities down into the
    brigades, so that they can multiply the number of brigades from
    33 to 43, and that they can develop this greater modularity.
    And it's, I think, a very innovative approach, it's exactly the
    right thing to do. That, coupled with balancing the active
    force with the Guard and Reserve, I think, will make us have a
    vastly improved Army.

                                   EQUIPMENT

        General Myers. There is no doubt the Army is using their
    equipment up at a very, very fast rate, whether it's tracks on
    Bradleys or helicopter blades or parts. This is a very serious
    issue for the Army.
        Senator Shelby. Tanks, too.
        General Myers. Tanks, the whole thing. I mean, it's every
    piece of gear they have, they are using up at a much faster
    rate than anticipated. In my view, this should be dealt with in
    the supplemental as we look at a----
        Senator Shelby. Okay.
        General Myers [continuing]. A possible 2005 supplemental.
    We just need to make sure that this kind of money is in there
    to make them well. And, otherwise, we're going to have a
    problem out there in the not-too-distant future if we don't
    make them well.
        Senator Shelby. Reset's important, isn't it?
        General Myers. Reset is extremely important.
        Senator Shelby. Thank you.

                        PERFORMANCE OF STRYKER VEHICLES

        Mr. Secretary, would you comment on the Stryker vehicle
    performance in Iraq? Have you spoken with the troops about the
    Stryker performance during your visits? And what are they
    reporting? We've been hearing a lot of good things, but I'd
    like to hear your comments, and then General Myers.
        Secretary Rumsfeld. I've heard a lot more good than not
    good.
        Senator Shelby. Yeah.
        Secretary Rumsfeld. There are those not in those Stryker
    units that raise questions.
        Senator Shelby. Sure.
        Secretary Rumsfeld. But--and it's early.
        Senator Shelby. Well, we've always----
        Secretary Rumsfeld. This is the first deployment.
        Senator Shelby. Sure.
        Secretary Rumsfeld. It's the first deployment. But my sense
    is, net, that they're valuable, they provide mobility, they
    provide--nothing provides the kind of armored protection that--
    even a tank, they--you've seen pictures of tanks smoldering,
    with their turrets off. I mean, there's no way to prevent
    something from being badly damaged. But as a midrange leading
    edge of what may very well evolve as the future combat systems,
    I think this Stryker is doing well.
        Senator Shelby. They've got a lot of fire power, too,
    haven't they?
        General Myers. They've got fire power, and they have good
    battlespace awareness when they get there because they can be
    connected to all sorts of other information sources, which is
    powerful.
        One thing, when I was--again, when I was in Iraq not too
    long ago, a couple of weeks ago, one of the things that I heard
    that I had not thought of, even though I've been around Stryker
    and I've driven a Stryker and spent some time at Fort Lewis
    looking them over, is that it's quiet. And quiet's important,
    because they can arrive on the scene without a lot of notice,
    and sometimes take adversaries by surprise. And they said that
    happened on more than one occasion. So I think the report card
    on the Stryker, so far, is A-plus.
        Senator Shelby. Mr. Chairman, thank you.
        Senator Stevens. Thank you very much.
        Senator Burns, you're recognized for 5 minutes.
        Senator Burns. Thank you, Mr. Chairman. And I want to thank
    the Secretary and the Chairman of the Joint Chiefs for this
    appearance today.
        I want to bring up a couple of things. Back in 1993 and
    1994, it was obvious to me that, with the new plans of the
    military, the force structure, and how it would appear, the
    military complex was in for change. And knowing that, we've
    seen more of our responsibilities moved into the Reserve and
    the National Guard sectors. And I looked at the infrastructure
    in my State of Montana, and we began rebuilding the
    infrastructure there to train and to prepare our people for an
    enemy and a mission that was quite different than anything they
    had ever faced before. We were operating out of old World War
    II structures, as you well know, using outdated material to
    train for an enemy that had passed.
        And I would suggest to my colleagues that we attend to our
    facilities and infrastructure, and also how we train our
    citizen soldiers, marines, sailors, and airmen for an enemy
    that is consistent with what we are seeing now, and the needs
    that they're going to have to have in distance learning and
    electronics and everything that we can gather to prepare our
    people for a possible call up.
        The Army has begun converting some Reserve component
    artillery forces to military police, for instance. This has
    been done to meet the high demand for MPs, which I think we can
    expect to increase in the future.

                              CONVERSION OF FORCES

        Can you give me an idea as to the number to be converted to
    this type of duty? And do you have adequate resources to
    continue this process and provide necessary training and
    equipment that will meet this need, considering we might be
    working with personnel who lack this type of training
    experience.
        Secretary Rumsfeld. It's an important question, and it's
    one that has to be reviewed continuously as circumstances
    change. But, at the moment, we believe that, with the budget
    and the additional requests that have been made, and with the
    restructuring that's taking place, that, at least for the
    foreseeable future, we're on the right track.
        Senator Burns. Well, we have started our rebuilding in
    Montana, and now we have the ability to retrain a four of five
    State area. They're bringing them into Helena, Montana. Fort
    Harrison now, for training on these new missions. General
    Myers, we have something else to offer in Montana right now, in
    terms of training and research and that's airspace. And we're
    running out of airspace in which to train our pilots and even
    some of our ground forces. And I would like to visit with you
    on that someday, about our capabilities up there. We've got two
    Air Force Bases now that are doing little, but could offer a
    lot more, as far as our training's concerned.
        And my next question is, the weapons caches that you've
    discovered in Iraq, are we finding them, are we securing them,
    and are we destroying their holdings?

                                 WEAPONS CACHES

        General Myers. Senator Burns, all the information I get
    says yes to those questions on weapons caches. We continue to
    find them. We find--we're up over 8,700 now, and tens are found
    every week, so we keep adding to that number. The last number I
    saw, none are unsecured. Some of the sites are secured 24 hours
    a day, 7 days a week, continuously, when they have the sorts of
    things that are being used by the bomb-makers for the
    improvised explosive devices, or if the have the man-portable
    surface-to-air missiles, or if they have mortars and grenades
    and those sorts of--and small arms. Others, which have--can be
    secured by bulldozing dirt up against bunkers that have 1,000-
    pound bombs in them that have not been pilfered are maybe not
    24 and 7, but secured with locks, with berms, with patrols.
        I'm not satisfied. We know--I mean, this is a country that
    we estimate has 660 shore tons of weapons in it. We've
    destroyed under 130 shore tons. We've got 6,000 people, to
    include contractors and Armed Forces personnel, on this all the
    time, trying to do away with these arms caches. I'm not sure
    that--I mean, I can't sit here and say that we know of every
    one. But as we find them, we try to deal with them. And it's a
    personal thing of mine to--because I get asked this question a
    lot. Again, from what I'm told, we deal with them just like I
    described. I think we need to be very curious about that and
    continue to probe.
        Senator Burns. Well, I'm concerned about that, because we
    know that's the base of making these----
        General Myers. You bet.
        Senator Burns [continuing]. Individual weapons----
        General Myers. You bet.
        Senator Burns [continuing]. Used in roadside----
        General Myers. The soldiers know that, you bet.
        Senator Burns. And the quicker we eliminate that supply, I
    think, the safer we will be in our----
        General Myers. It's going to be--yes, sir--it'll be a long-
    term job, but we've got to be at it with as much capability as
    we need to put against it.
        Senator Burns. Mr. Chairman, I have more questions, but I
    will submit them in private, and thank you very much.
        Senator Stevens. Thank you very much.
        We'll now--Senator Inouye has not asked questions in the
    first round, so, Senator Inouye, do you have any questions?
        Senator Inouye. Yes.

                             AIR FORCE TANKER LEASE

        Mr. Secretary, we were advised that last week the Defense
    Science Board was supposed to release a report on the Air Force
    tanker lease deal. Has that been released?
        Secretary Rumsfeld. I have been briefed, and I'm sure we
    can brief you. Whether they have formally released it, I just
    don't know.
        Senator Inouye. Can you provide us with----
        Secretary Rumsfeld. In fact, here it is, they're briefing
    staff directors here on your committee today.
        Senator Inouye. Thank you very much.

                            RECRUITING AND RETENTION

        Second, has the events of the past 2 weeks had any impact
    upon recruiting and retention of Active, Reserve, and National
    Guard?
        Secretary Rumsfeld. Senator, I'm afraid that the systems we
    use to track recruiting and retention may not be sophisticated
    enough to give us good data that fast. Last month's worth that
    I heard about, we were doing fine in both recruiting and
    retention. What it'll be when the next data comes out remains
    to be seen.

                      QUANTITY OF MILITARY INVESTIGATIONS

        Senator Inouye. Last week on talk shows and at the hearing,
    I believe three witnesses, including you, Mr. Secretary,
    mentioned 18,000 military crimes being processed. And I believe
    you indicated that about 3,000 resulted in court-martial. Can
    you provide us--not at this moment, but--the nature and the
    severity of these crimes, where they occurred and in what
    services? We've tried to get some information, but no one seems
    to know 18,000. So----
        Secretary Rumsfeld. Of course, this kind of information is
    not centralized in the Department. Each service manages itself.
    The data I have is, as you suggested, that there were something
    in--it's 17,000-plus criminal investigations opened. There were
    about 72,000 non-judicial punishments that took place. In terms
    of Article 32, we don't have the information from the Army--
    it's not tracked--but the other services have about 400. In
    terms of total court-martials, as you said, it's about 3,000.
    And in terms of general court-martials, it's about 1,100. And
    that was all 2003 data. So you can imagine the scope of that
    all across the services. There's always--with the number of
    people we have, there's always going to be these types of
    things that occur, I'm afraid.
        Senator Inouye. Of that number, about how many occurred in
    Iraq?
        Secretary Rumsfeld. Oh, I have--am not able to provide that
    answer.
        Senator Inouye. Can you provide us with those?
        Secretary Rumsfeld. We certainly will. Yes, sir.
        [The information follows:]

                                              SERVICES INVESTIGATIONS DATA
    ----------------------------------------------------------------------------------------------------------------
                                         Criminal                                                          Total
                                      Investigations     Criminal        Criminal          Total      Investigations
                                          Opened      Investigations  Investigations  Investigations     Opened in
                                         Worldwide     Opened Fiscal   Opened Fiscal  Opened in Iraq    Afghanistan
                                        Fiscal Year   Year 2003 Iraq     Year 2003      Since March        Since
                                           2003                         Afghanistan        2003       September 2001
    ----------------------------------------------------------------------------------------------------------------
    Army............................     \1\ 10,915             969             216           1,362          \2\ 59
    Navy............................      \3\ 4,260              35   ..............             56               1
    Air Force.......................      \4\ 2,531   ..............  ..............             16   ..............
    ----------------------------------------------------------------------------------------------------------------
    \1\ CID ROI only.
    \2\ Estimate.
    \3\ NCIS only.
    \4\ OSI only.

                                         SERVICES JUSTICE DATA FISCAL YEAR 2003
    ----------------------------------------------------------------------------------------------------------------
                                                                  Total
                                                    General      Courts-                                 Criminal
                                                    Courts-      martial    Article 32s  Nonjudicial  Investigations
                                                    martial      (GCM and       Held      Punishment      Opened
                                                                  SPCM)
    ----------------------------------------------------------------------------------------------------------------
    Army........................................          688        1,329      ( \1\ )       43,084     \2\ 10,915
    Navy........................................          183          835          173       19,770      \3\ 4,260
    Air Force...................................          351          935          248        9,164      \4\ 2,531
    ----------------------------------------------------------------------------------------------------------------
    \1\ Unknown. Information is not tracked.
    \2\ CID ROI only.
    \3\ NIS only.
    \4\ OSI only.

        Senator Inouye. Following up Senator Domenici's question,
    in 7 weeks, when we have this transition, when do you consider
    would be the time when we may be able to consider a Status of
    Forces Agreement? When can we count upon the new government to
    take over the water and sewer responsibilities?
        Secretary Rumsfeld. The which responsibilities?
        Senator Inouye. Water and sewer.
        Secretary Rumsfeld. Ah.

                           STATUS OF FORCES AGREEMENT

        Senator Inouye. And I'd like to know when you think would
    be appropriate for them to take over the prison system.
        Secretary Rumsfeld. First on the Status of Forces and our
    arrangement with the current government, the lawyers for the
    United States have concluded that the U.N. resolution that
    exists already provides appropriate protection for U.S.
    forces--coalition forces, I should say--between the time--
    certainly now, and the time, going forward, between June 30,
    when the sovereignty responsibilities are assumed by the
    Iraqis, and the next government takes over. There are people
    who debate that and discuss it, but my guess is that the Iraqis
    are going to have to decide whether or not they want the
    interim government or the permanent government to make those
    arrangements. The permanent government, of course, would only
    result after elections some time next year, in 2005. We,
    needless to say, have to have confidence that our forces are--
    have the right kinds of protections in that country. And I
    believe that the current conviction is that we do and we will,
    and that those detailed discussions were probably not
    appropriate for the Iraqi Governing Council to engage in, nor
    would they necessarily have been viewed as sufficient or final
    for the other governments, so that that task is going to be
    left for the government to come, which is after June 30, or
    after the final Iraqi government is elected next year.

                       RESPONSIBILITY FOR PRISONS IN IRAQ

        General Myers. On the prison system, the----
        Secretary Rumsfeld. Oh, yes, I'm sorry.
        General Myers [continuing]. Iraqis are currently
    responsible for those picked up on criminal charges, so, at Abu
    Ghraib, the Iraqis maintain the criminals in their part of that
    prison. The U.S. forces have what we call our security
    detainees, folks that are picked up that either have shot at
    the Coalition or are involved in other operations that we think
    are security related. So the Iraqis are in charge of their
    operation. I would think, as times goes on, and as we become
    more of a partnership, you can see this--more and more, this
    burden probably shifting to the Iraqis, but it'll be over time.
        Senator Inouye. So this prison, Abu Ghraib, was jointly
    operated?
        General Myers. Yes. Yes, sir. That's the information I
    have.
        Senator Stevens. We now approach the second round, and I am
    told that the Secretary needs to be through with us, or we'd be
    through with him, at noon. So what I propose to do is to ask
    two questions I want to ask, primarily for the record, and then
    we will recognize the balance of the five of you over the 25
    minutes that's left.
        Mr. Secretary, I've got to say that I--and General--I had
    to--I didn't have to, but I did apologize to Senator Feinstein
    because last year she raised a question of those munition
    dumps, and I sort of downplayed it, because I said that that
    had been taken care of. We later found, as we went over there,
    that not only--they're still being found, which is an
    interesting comment. In April, I was told there were--munitions
    that we recovered were--is that on tons? In shore tons,
    154,000-plus recovered, 124,000 destroyed. They found 8,756
    caches, cleared 8,684. The remaining were either secured or
    partially secured. I'm really concerned about the partially
    secured.
        So what I would like to ask you, for the record, if you
    could update that chart that was given us on April 1 and to
    assure Senator Feinstein we will pursue making sure that you
    have adequate money to deal with those munitions, because one
    of the contractors told me that when they wanted equipment just
    to protect their convoy, they just went to one of those dumps
    and picked them up--handheld weapons, et cetera. So if they can
    pick' em up, anyone can pick' em up.
        [The information follows:]
                              Weapons Cache Update
    Purpose
        To provide information on Weapon Caches in Iraq.
    Bottom Line
        Since September 11, 2003, (current as of June 18, 2004).
        Short Tons destroyed--195,141.
        Short Tons on-hand at depots--149,861.
        Caches found--9,693.
        Caches cleared--9,631.
        Caches remaining--62.
        Caches secured (24-hour presence)--21 of 62.
        Caches partially secured (Periodic patrols, reconnaissance,
    surveillance)--41 of 62.
        Caches unsecured (No security)--0.
    Background
        There are over 6,000 soldiers and contractors dedicated to
    securing, transporting, guarding, and destroying captured enemy
    munitions.
        The captured enemy ammunitions are evaluated to determine the best
    disposal methods or reutilization potential.
        The most dangerous munitions, such as rocket-propelled grenades,
    mortar and artillery rounds (for IED making materials) and surface-to-
    air missiles, are transported to six depots for safe, secure storage
    and eventual destruction. There is one depot per divisional sector.
        Partially secured sites contain ammunition that would be extremely
    difficult to remove quickly, such as aircraft ordnance and large
    caliber ammunition or missiles.

        Senator Stevens. Second, I would like to ask a question
    about--for the record--concerning the F-22. According to the
    current plans, current--the procurement funding will increase
    by 50 percent from fiscal year 2005 to 2009. That's required
    for full-rate production of the F-22, and the continued
    development of the Joint Strike Fighter fielding a future
    combat system. We have additional commitments in Defense to
    space surveillance and access. I worry about whether we can
    afford these programs. Could you give us a projection out to
    that same number, 2009, for all of the systems that are going
    to be competing with the money here starting in 2006? We know
    what the competition is in 2005--this is just for the record,
    now.
        [The information follows:]

        There will be several procurement requirements competing
    for valuable resources within the Air Force as we approach
    2009. The larger programs include the Joint Strike Fighter, C-
    17, C-130J, KC-135 Tanker Replacement, and Airborne Laser. All
    of these programs, as well as the F/A-22, are currently covered
    within the Air Force topline. In addition, funding is provided
    for modification upgrades to the C-5, E-3, F-16, Predator and
    Global Hawk aircraft.

                                      IRAQ

        Senator Stevens. And, based on that, I will call on Senator
    Byrd for the second round for 5 minutes.
        Senator Byrd. Thank you, Mr. Chairman.
        General Myers, earlier you stated that there is no way that
    we can militarily win or lose in Iraq. Does that mean that
    there's no military solution possible?
        General Myers. Senator Byrd, what I was saying is the same
    thing the Secretary has said, that we need to win on the
    security front, which has a strong military component; but not
    just U.S. military. Iraqis have to be part of that, the
    international community has to be part of that. We have to win
    on the political or governance front. That has to go hand in
    hand. And we have to win on the economic front. And the sub-
    tick under that would be the infrastructure. So, I mean, we
    could flood the country with U.S. Armed Forces and have a
    soldier next to every house and every Iraqi, but we wouldn't
    achieve our end objective, which is a free and democratic Iraq.
    So these other pieces have to go with it.
        Senator Byrd. Well, do we have an exit strategy?
        General Myers. Senator Byrd, I believe we do, and it's
    bound up in the things the Secretary has already talked about.
    We've got the United Nations, and they're working the
    governance piece, and that first piece, we should see here on
    June 30. That is only a temporary piece until we get to
    elections, in December or January--January 2005. And then
    there's a further piece after that for the constitution. Then
    there's further elections and a government. We've got our
    security piece pretty well figured out. If we get--we're
    working hard on a United Nations Security Council resolution,
    and if that is successful, I think more of the international
    community will be willing to be part of this.
        I was just in NATO. I can tell you, at least among most of
    my NATO military colleagues, that they feel there is a role for
    NATO in Iraq. Whether there's political will in NATO, we won't
    know yet, but we do have the Istanbul summit coming up, and I'm
    sure that'll be one of the issues that's discussed. As the
    Secretary said, there is already big NATO involvement, just not
    a NATO mission. The NATO involvement is supporting the Polish-
    led division with forces and equipment.
        Senator Byrd. When do you think we can see the end of the
    tunnel and our troops can come home?
        General Myers. I think the next time we'll have a pretty
    good picture will be in--and this is something I've talked to
    General Abizaid about--is sometime this fall, maybe even early
    winter, but after Iraqis are in charge, after June 30, see what
    traction the political process gets, see if, in fact, it has
    the effect of, for those that are opposed to progress in Iraq,
    saying, ``Okay, it looks like we might as well join the team.''
    And I think we can make that judgment this fall, and look at
    the way forward. I think that's the next place where we'll have
    a pretty good lens into what the way forward is.
        Senator Byrd. This fall?

                                  SOVEREIGNTY

        General Myers. This fall. I think through elections--I
    mean, we've provided testimony before--General Abizaid's, I
    think, provided testimony on this subject--that certainly
    through the transfer of sovereignty here on June 30, it's going
    to get--it's going get worse before it gets better, and we're
    seeing that. After June 30, it remains to be seen.
        Senator Byrd. Mr. Secretary, you said that the, quote,
    ``Congress,'' close quote, asked you not to request the Iraq
    supplemental in the President's February budget. I don't know
    who, quote, ``the Congress'' is.
        Senator Stevens. Senator, I can confess.
        Senator Byrd. I beg your pardon?
        Senator Stevens. I will confess. I made that request
    because of the delay that's caused by the loss of 2, almost 3,
    weeks for conventions, and I said we did not have time to do 13
    bills and a supplemental before September 30 of this year.
        Senator Byrd. Well, when the Senate passed the fiscal year
    2004 appropriations bill last summer, we approved an
    amendment--I believe it was my amendment--with over 80 votes
    expressing the sense of the Senate that you should budget for
    the war--that you should budget for the war in Iraq in the
    President's request for the annual budget. Let me read the
    exact language. Section 8139, ``It is the sense of the Senate
    that, one, any request for funds for a fiscal year for an
    ongoing overseas military operation, including operations in
    Afghanistan and Iraq, should be included in the annual budget
    of the President for such fiscal year as submitted to Congress
    under section 1105(a) of title 31, United States Code; and,
    two, any funds provided for such fiscal year for such a
    military operation should be provided in appropriations acts
    for such fiscal year through appropriations to specific
    accounts set forth in such acts.''
        So we've asked that that be done, and I hope it will be
    done. That was my amendment. Do I have time for any further----
        Senator Stevens. I'm sorry, Senator, your time's expired.
        Senator Byrd. I thank the chairman. I thank the Secretary.
        Senator Stevens. Senator Domenici is recognized for 5
    minutes.
        Senator Domenici. What was the time?
        Senator Stevens. Five--well, 4 minutes.
        Senator Domenici. All right.
        First, let me say, Mr. Secretary and General Myers, in my
    first round of questions, typically I got excited and I didn't
    tell you both that I congratulate you. I do.

                      IRAQI DEBT AND OIL FOR FOOD PROGRAM

        Mr. Secretary, there's been a series of questions, not as
    much as I would have hoped, about how we're going to
    reconstruct the country, and whether we had a plan, and I want
    to thank you both for at least telling the American people that
    you have the plan. And in particular, General Myers, I think
    what you described, in terms of the merging, the command
    structure, of the Iraqi military with ours is tremendous. I
    hope you proceed with dispatch.
        General Myers. Yes, sir, we will.
        Senator Domenici. I have also determined that there is not
    very much Iraqi oil money that is currently available for the
    payment of infrastructure. The reason is that Iraq owes a huge
    amount of money to countries that they borrowed from, led by
    Russia, France, and others. Now, Mr. Secretary, we have asked
    Jim Baker to go around and see what can be done to minimize the
    payment of those so we can get on with reconstruction. Is that
    not correct?
        Secretary Rumsfeld. It is correct.
        Senator Domenici. Now, second, we know that France and
    Russia, two of the biggest creditors, have cheated immensely
    with hundreds of millions, if not billions, of dollars in the
    Oil for Food Program. Now, frankly, it disturbs me that we're
    working on making sure that their debt is paid, when, as a
    matter of fact, they've taken money from the Oil for Food
    Program and allocated it to themselves in what might be a giant
    fraud. Now, I ask you, who is responsible for seeing that
    something's done about that? Is that Jim Baker's job, or is
    that the Secretary of State's job, or is that your job? Because
    I think we ought not to be recognizing those debts if, in fact,
    we have reason to believe that that program was pilfered the
    way we understand it. Mr. Secretary and General, either one of
    you.
        Secretary Rumsfeld. Senator, there are several
    investigations--at least two that I know of--of the Oil for
    Food Program, and a lot of charges have been made. The
    investigations are not complete.
        With respect to the responsibility for dealing with Iraqi
    debt, the President asked former Secretary of State Baker, as
    you pointed out, to address that, and those are matters that
    are being handled by the Department of State--the United States
    Department of State, by the United States Department of
    Treasury, not by the Department of Defense.
        Senator Domenici. I thank you.
        I have four or five questions that are more parochial and
    don't fit this meeting, but I will submit them.
        And, General, there's one--and that is on the border of the
    United States, we have a very serious problem of the
    infiltration of potential terrorists. Those borders have been
    guarded by Reserve and National Guard people, and I am
    concerned that--in our desire to solve Iraq, that we don't
    minimize the protection of our borders by our military to
    prevent terrorists. Can you just either address it now or
    address it later?
        General Myers. I'll say a couple of things. One is that the
    stand-up of Northern Command was exactly the right thing to do,
    because they, along with Department of Homeland Security, worry
    very much about that. So I think it's good that we have a
    military command that worries about that, as well, and works
    with our neighbors to the north and to the south to help stem
    that flow.
        I am not aware, right now, of military augmentees that
    other than on--occasionally we have reconnaissance forces that
    help, but not like we did right after 9/11, where we had
    military people, generally from the National Guard, augmenting
    some of our border organizations.
        Senator Stevens. General, I've got to--if I'm going to let
    you go, I've got to----
        Senator Domenici. Thank you.
        Senator Stevens [continuing]. Stop you right there.
        General Myers. Stop it.
        Senator Stevens. Senator Leahy, you're recognized for 4
    minutes.
        Senator Leahy. Thank you, Mr. Chairman.
        I was going to raise a question on the ammo dumps, but--
    following up Senator Feinstein--but I appreciate what you said,
    and I'll wait to see what we hear from that.
        I was glad to hear the comment made about the value of
    TRICARE for the National Guard. When I and several other
    Senators on both sides of the aisle were trying to push through
    TRICARE last year, we received a letter from the Secretary
    saying the President would veto a bill that might have TRICARE
    in it. So I'm glad that you have come around to our side, and I
    compliment you on that.
        So that Secretary Rumsfeld does not have to spend a great
    deal of time checking his databanks, I want to make sure you
    understand what I was saying earlier about the letters I have
    written to you. I was not saying I didn't get an answer. I
    meant a letter came back. The answer was questionable. For
    example, one on June 25 of last year regarding treatment of the
    Baghram Air Base; and, after what's been reported there, Abu
    Ghraib, and Guantanamo, I suspected the answer was incomplete.
    I will give you compliments, however. The Central Intelligence
    Agency (CIA), when we asked them such questions, they never
    responded. And, of course, as he usually does, Attorney General
    Ashcroft didn't respond to my letters, or letters from
    Republican Senators, or others.
        I was going to bring up, and I will submit it for the
    record, some of the specific funding questions.

                            PRISONER ABUSES IN IRAQ

        But just because of some of the things said here today
    about the concern that the prison abuses in Iraq are just the
    work of a few bad apples, I look at this report that we have
    had----
        Secretary Rumsfeld. Who were you quoting that said
    ``they're just the work of a few bad apples''? Certainly not
    me.
        Senator Leahy. No, I'm not quoting you. I said for those
    who have said this--suggested this at the hearing today. But if
    I might get on with my point----
        Secretary Rumsfeld. I didn't hear anyone say that.
        Senator Leahy. Fine. Your recollection will be yours;
    mine's mine.
        If I might, let me go back--to those who have suggested
    it's only a few people involved that were, sort of, out of the
    chain of command, I have a copy of a March 2004 report by Human
    Rights Watch--has corroborated such things as interrogation
    techniques employed by U.S. personnel--sleep deprivation,
    prisoners stripped naked and kept in freezing cells,
    humiliating taunts by women, hoods placed over detainees' heads
    during interrogations, forced standing/kneeling for hours, and
    so on. Incidentally, Mr. Secretary, the reason I even raise
    this, and to refute some who have suggested that it's only a
    few, is that this report, of course, is about Afghanistan, not
    about Iraq. But it appears to be exactly the same techniques
    used in Afghanistan as were used in Iraq. Now, I don't think
    they're getting techniques over the Internet. There is
    obviously some systematic training.
        And so I would suggest, especially about the report by
    Major General Ryder, that we find out whether there is a
    coordination between all of these so that nobody will have the
    assumption that it may be just a few bad apples. Because I know
    that the vast majority of our American men and women follow
    orders, do it very professionally, and make every single Member
    of the United States Senate proud, as they do you and General
    Myers.
        Secretary Rumsfeld. Senator Leahy, first on the ammunition
    dumps, we are discovering more every day. The country is filled
    with them. Any number we give you--and we'll give you weekly
    reports if you want--changes because of the number that are
    found and the numbers we deal with.
        Second, I know I don't know the extent of the abuse
    problem. We've got, I believe, six investigations underway. I
    am absolutely certain that there are more revelations to come.
    The question as to whether or not there is something systemic,
    as I believe you said is obvious, is not obvious to me. I'm
    anxious to learn whether that's true. And the investigations
    that are taking place, we hope and pray, will tell us whether
    there is that.

                                 TAGUBA REPORT

        I do not recall, General Myers, anything in the Taguba
    report that said that there is obviously systematic training to
    do those things. Indeed, I am reasonably confident there isn't
    anything in General Taguba's report that suggests that there
    was training to do those things. Is that your----
        General Myers. I think that's----
        Secretary Rumsfeld [continuing]. Recollection?
        General Myers [continuing]. That's my recollection.
        Secretary Rumsfeld. But the----
        Senator Leahy. I think I was talking about General Ryder's
    report, but that's okay.
        Secretary Rumsfeld. I see.
        Senator Stevens. Senator, could we move on to the other two
    Senators----
        Senator Leahy. Sure.
        Senator Stevens [continuing]. So we can--we have--matter of
    fact, we have three Senators. Do we?
        Senator Leahy. Thank you, Mr. Chairman.
        Incidentally, Mr. Chairman, you have run this hearing very,
    very fairly, as you always do, and I appreciate that.
        Senator Stevens. I'm trying.
        Senator Durbin, you're recognized for 4 minutes.
        Senator Durbin. I'd like to ask two questions, if I can
    briefly. And the first follows up on this whole question of the
    interrogation techniques. We have, I understand, one soldier
    who has been captured--is it--a soldier, last name Maupin, if
    I'm not mistaken----
        General Myers. Right, Maupin.
        Senator Durbin [continuing]. And we're uncertain of his
    whereabouts.
        General Myers. That's correct.

                        FOLLOWING THE GENEVA CONVENTIONS

        Senator Durbin. And we certainly hope he is safe. I'd like
    to ask, Mr. Secretary, wouldn't it help if there was clarity
    from you and from this administration that we would abide by
    the Geneva Conventions when it comes to civilian and military
    detainees, unequivocally? Wouldn't that help to put to rest
    concerns about our interrogation techniques in Guantanamo, at
    Baghram, in Iraq? And wouldn't it also serve to protect any
    Americans who become prisoners?
        As I look at the interrogation rules of engagement, which
    have been issued, there are, frankly, many of those which are
    violative of the Geneva Convention standard, and these are
    rules which have been issued by our Government. Wouldn't it be
    good for us, at this moment in time, to clearly and
    unequivocally state that we will follow the Geneva Convention
    with civilian and military detainees?
        Secretary Rumsfeld. Senator, that is a question that's
    being discussed widely in the press and editorial comment in
    newspapers, and certainly that's a fair thing. Regrettably, the
    discussion and the dialog and the editorials tend to be, in
    many instances, inaccurate.
        There is no ambiguity about whether or not the Geneva
    Conventions apply in Iraq. There never has been any ambiguity.
    From the outset, Iraq is a country, the United States is a
    country. The Geneva Conventions apply to parties, nations. They
    don't apply to terrorist networks. They do apply to nations.
    Iraq's a nation, the United States is a nation. The Geneva
    Conventions applied. They have applied every single day, from
    the outset.
        Now, where the confusion comes in--and it's understandable
    to some extent--is this. And I'm very glad you raised it,
    because it's something that's concerned me, and I have been
    disappointed to see the lack of research that's taken place on
    this subject. The Geneva Conventions apply to conflicts between
    states, parties to the conventions. In the case of Afghanistan,
    it is a state; and, therefore, the Geneva Convention applied to
    Afghanistan as a state. It did not apply to the al Qaeda that
    was using that state.
        And a judgment was made by the President of the United
    States, very simply, that to protect the Geneva Conventions and
    to protect U.S. Armed Forces, it would be wrong to state that
    the Taliban were--merited the benefits of the Geneva
    Conventions; the reason being, that the Geneva Conventions
    apply to people, and they get prisoner of war (POW) status only
    if they satisfy certain criteria: Do they operate in the chain
    of command? Do they wear uniforms? Do they carry arms openly?
    Do they comply with the laws of war?
        Terrorists don't comply with the laws of war. They go
    around killing innocent men, women, and children.
        Senator Durbin. Mr. Secretary, I----
        Secretary Rumsfeld. Just a minute. Just a minute, Senator.
        Senator Durbin. I want to have----
        Secretary Rumsfeld. I'll stay late.
        Senator Durbin [continuing]. A chance to follow up.
        Secretary Rumsfeld. I'll stay. Listen, I'd like a chance to
    follow up.
        The situation is that the President not only said it should
    not apply--the Geneva Conventions--under the law, to the
    Taliban or the al Qaeda, although it does to Afghanistan, and
    it always has to Iraq; but he said, notwithstanding that fact,
    they would be treated as though those conventions applied.
        Now, that's not a decision we made. That's a decision the
    President made. In my view, the conventions are there to
    protect people who obey the laws of war. To have--to do what
    you're suggesting, simply regardless of what the convention
    says, apply the conventions to anybody--terrorist, Taliban, you
    name it--doesn't strengthen the Geneva Conventions, it weakens
    them.

              DOD INSTRUCTIONS CONSISTENT WITH GENEVA CONVENTIONS

        Senator Durbin. Let me go specifically to Iraq, and let me
    talk about the detainees that were held at Abu Ghraib and other
    prisons. And let me tell you, your interrogation rules of
    engagement, the ones that are published, go far beyond the
    Geneva Convention. The things that we allow, with CJ's approval
    here--stress positions, sleep management, dietary
    manipulation--all of these things go far beyond a standard
    which says, ``There will be no physical or mental torture, nor
    any other form of coercion or that the people involved will be
    exposed to unpleasant or disadvantageous treatment of any
    kind.'' That's the Geneva Convention. These rules of engagement
    for interrogation issued by your Department are inconsistent
    with those. And I'm not talking about the terrorists, al Qaeda
    or the Taliban. We're talking about Iraq.
        Secretary Rumsfeld. General Myers, correct me if I'm wrong,
    but my recollection is that any instructions that have been
    issued, or anything that's been authorized by the Department,
    was checked by the lawyers in your shop, in the Department, in
    the Office of the Secretary of Defense, and deemed to be
    consistent with the Geneva Conventions.
        General Myers. Absolutely. And you could read any one of
    those--stress positions--you could read any of those--stress
    positions for an excessive amount of time, or that would hurt
    somebody, is not approved. I don't know if you--I don't have
    that with me; I had it for the last hearing--I think, at the
    bottom, it says, ``In all cases, they will be treated
    humanely.'' I don't know if it's on that chart. Is it at the
    bottom? What's it say at the bottom?
        Senator Stevens. Well, gentlemen, this is a very
    interesting conversation----
        General Myers. We'll be happy to come brief you on this,
    but that is not illegal according to the Geneva Convention or
    the ways they were applied. Every time we have an
    interrogation, we have an interrogation plan. Those are
    appropriate, and that's what we're told by legal authorities
    and by anybody that believes in humane treatment.
        Senator Durbin. I will just conclude by saying I don't
    believe what you have issued is consistent with the Geneva
    Convention. And I think, now more than ever, in light of what
    happened in that prison, in light of the fact that an American
    serviceman is being held, we should be clear and unequivocal--
    --
        Senator Stevens. Senator, we've got to terminate this
    sometime. I'm late for appointments myself.
        Now, we have two other members who have 4 minutes each. One
    of them is Senator Dorgan, for 4 minutes.
        Senator Dorgan. Mr. Chairman, thank you very much.

                           CAPTURING OSAMA BIN LADEN

        It seems to me that one of the major goals with respect to
    our security here in this country is the apprehension of Osama
    bin Laden. I'd like to ask you about that briefly. It has been
    2\1/2\ years since Osama bin Laden perpetrated the attack
    against our country. He communicates to us and to the world
    through videotapes sent to al Jazeera and other outlets. It
    seems to me, I'm sure in your mind and in the mind of all
    Americans, that it is urgent that we find Osama bin Laden and
    apprehend him. I'd like to know what is happening on that
    front. What can you say publicly about it? What is new? What
    should we understand about any progress that might or might not
    be being made with respect to finding Osama bin Laden?
        Secretary Rumsfeld. The Department of Justice, the Federal
    Bureau of Investigation (FBI), Department of State, working
    with other countries, the Department of Defense, with military
    intelligence, spends an enormous amount of time attempting to
    develop information, frequently from detainees, that can lead
    to information that conceivably might produce actionable
    intelligence to capture him. We have not been successful. It's
    the kind of thing where people ask me, ``Well, are you close?''
    There is no ``close'' in this business. Either you have him or
    you don't. And they are well financed, they're clever, they go
    to school on us and watch what we do. And, thus far, we have
    been successful in capturing a large number of the top al
    Qaeda, we've been successful in capturing a large number of
    Taliban, we have been successful in capturing a number--many of
    the top 55 in Iraq, including Saddam Hussein, and attacking his
    sons, but we haven't got Osama bin Laden.
        Senator Dorgan. But, Mr. Secretary, you know, I understand
    you and General Myers and others, all of us, have our hands
    full with Iraq. We pray that that gets resolved. But would you
    agree that another significant goal must be the apprehension of
    Osama bin Laden? My expectation is if there is a terrorist
    event, God forbid, in this country in the future, it----
        Secretary Rumsfeld. I think that's a good----
        Senator Dorgan [continuing]. Will be directed by----
        Secretary Rumsfeld [continuing]. Reasonable----
        Senator Dorgan [continuing]. Osama bin Laden.
        Secretary Rumsfeld. That's a reasonable expectation. We see
    threats to that effect consistently, for this country and for
    other countries. And they're not just by Osama bin Laden. I
    mean, as General Myers pointed out, Zawahiri is--he hasn't
    sworn allegiance to Osama bin Laden, but he's running his own
    network--but he's the next best thing. He's as close to Osama
    bin Laden as you can get without having decided that he wants
    to give up his own independence and swear allegiance to him.
        General Myers. Zarqawi.
        Secretary Rumsfeld. I mean Zarqawi. And----
        General Myers. We have--this is something that we review
    all the time, and let me just assure you that we have a great
    deal of capability and resources put to this problem, and we're
    trying to do it the best we can. I mean, we are--there is no
    lack of resources. Nobody's asking for anything we don't have.
    We're trying to, in a very difficult part of the world, where
    the terrain is not only tough, but the people's allegiances to
    any government are essentially nonexistent, that it's a very
    tough place to operate. And there are other considerations, as
    well, we can go into in a classified session. But we certainly
    are putting a lot of resources to this issue.
        Senator Dorgan. So you're saying, ``We're on the hunt, on
    the move, we have resources directed.'' I know that, at one
    point, substantial resources were directed to that goal. Is
    that not----
        General Myers. I would say we have substantial resources
    directed to that goal. I would say it's correct.
        Senator Dorgan. There were others who predicted that--
    within this year, for example--we were getting close enough to
    expect that within this year, that Osama bin Laden would be
    apprehended.
        Secretary Rumsfeld. I think predictions like that are
    difficult. It's like predicting what a war's going to cost, or
    how long it's going to last, or how many people are going to be
    killed. Anyone who does that ends up being embarrassed.
        Senator Dorgan. All right. I'd just, finally, say, whatever
    resources you need to do that job, I think this committee is
    very interested in making those resources available if the
    resources aren't, at this point, sufficient.
        General Myers. You bet, sir.
        Secretary Rumsfeld. Thank you.
        Senator Stevens. Yes, Senator Feinstein.
        Senator Feinstein. Thanks very much.

                        DETAINEES AND GENEVA CONVENTIONS

        If I may, Mr. Secretary, I just want to venture an opinion
    on the Geneva Convention. I think we always have to apply the
    Geneva Convention, because, with our Nation, regardless of
    whether it is state or non-state, we have a certain moral
    imperative that we cannot escape, and that's everything that a
    just nation believes in, and there's no escape from it. And so
    my very strong view is that this nation should always observe
    the protocols of the Geneva Conventions.
        Now, a question, if I might.
        Secretary Rumsfeld. May I comment on that?
        Senator Feinstein. Surely.
        Secretary Rumsfeld. That sounds so plausible and so
    reasonable, and I'm told, by people who study these things,
    that there's a danger to doing that. And the danger is that the
    Geneva Conventions were put in place to try to protect innocent
    civilians. And to the extent people behave in a way that's
    inconsistent with the conventions, that is to say they attack
    innocent civilians, they operate--they don't wear uniforms,
    they don't carry arms openly, they carry them in concealed
    basis, they mix themselves among civilian populations, putting
    civilian populations at risk, as we see happening in Iraq
    today, putting people in front of them, children and the like--
    to the extent you say, ``That's okay. Let's give everybody the
    benefits of Geneva Convention,'' then the worry was, when the
    convention was developed--and I'm not expert on this, but I'm
    told this--the worry was that it would lead people to put more
    innocent people in jeopardy.
        Do you want comment on that?
        General Myers. Well, I think that's exactly right. And I
    think the next point is, then, having said that, that the
    Geneva Convention--that we will apply it in all cases, and we
    have, faithfully, and, I think, to include our interrogation
    techniques.
        Senator Feinstein. Let me make my point. A large number of
    detainees are innocent. They're in the wrong place at the wrong
    time.
        Secretary Rumsfeld. Sure.
        Senator Feinstein. You just acknowledged, earlier, that
    31,000 detainees were released, presumably because they were
    innocent. And, you know, and you also said, General, a very
    profound thing this morning. You said, ``There is no way we can
    lose this war militarily, and there is no way we can win it
    militarily,'' which I think makes the exact point of why this
    nation's adherence to the Geneva Conventions, protocols--the
    fourth, the fifth, and others--are so very important.
        Now, let me just ask one other question. You also said that
    your hope would be that, within a few months after the
    transition, we would be able to withdraw. And we talked about
    planning ahead----
        Secretary Rumsfeld. I didn't say that.
        Senator Feinstein. The General, I think----
        General Myers. No, I said that we would--that the next time
    we'd have a lens on what the requirement would be. We'd have to
    see how the political track--that was what I hoped to----
        Secretary Rumsfeld. Absolutely not. That would be a
    terrible----
        General Myers. Right.
        Secretary Rumsfeld [continuing]. Misunderstanding.
        Senator Feinstein. All right----
        Secretary Rumsfeld. There's no one I know who believes
    that.
        Senator Feinstein. So you're saying the next time to view
    that would be within----
        General Myers. Senator, because now--between now and June
    30, we know it's going to get worse. We've said that for
    months. And then we're going to have to see afterwards how the
    Iraqi citizens behave once they have a government. And so
    sometime this fall, I think, General Abizaid will feel
    comfortable to say, ``Okay, here's the track we're on now.''
        Senator Feinstein. Could I ask for your assessment, both of
    your assessment, if I might, on another subject? What is your
    assessment of the probability of civil war following a
    transition, largely Sunni/Shi'ite?

                        PROBABILITY OF CIVIL WAR IN IRAQ

        Secretary Rumsfeld. It's been a problem we've worried about
    from day one. It's a problem we worried about on entering the
    country, that it could happen. It hasn't happened. We do know
    that terrorists and foreign people and former regime elements
    and some other elements in the country have consciously
    developed a plan to try to incite that and to attack various
    elements and lead people to believe it was another element in
    the country, in the hope that that could create anarchy and
    chaos and cause the Coalition to leave. So it's a risk. It's a
    risk.
        The goal would be for us to stay there as long as we have
    to, to have the Iraqi security forces sufficiently developed
    that they would be able to deal with the overwhelming majority
    of the kinds of problems that could occur--normal law
    enforcement and the like.
        Our role, one would think, would diminish as the government
    stands up next year--this year and next year, in some way, as
    soon as it's possible, but to, for a good period of time, be
    available to be of assistance in the event it's necessary. And
    the last thing in the world anyone wants to see is a civil war
    in that country.
        Senator Stevens. Thank you very much.
        Senator Feinstein. I thank you both very much.
        Thank you, Mr. Chairman.
        Senator Stevens. Mr. Secretary, I think--I'm not sure about
    history, but I know you've served this Department of Defense as
    Secretary before, and I certainly congratulate you for the way
    you're handling these terrible days right now. And, General
    Myers, we have worked with a number of chairmen of the Joint
    Chiefs of Staff, and you're the finest, and I really believe we
    are very fortunate to have you where you are. We appreciate
    your testimony today.
        Secretary Rumsfeld. Could I make one last comment?
        Senator Stevens. Yes, sir.

                                CLOSING COMMENTS

        Secretary Rumsfeld. Mr. Chairman and members, these
    events--these abuses, have been a body blow for the country.
    I've heard a lot of comments today, and one citation that it's
    the beginning of the end, and that kind of a feeling. I must
    say, I don't believe that. I think that these abuses that took
    place are terrible, they're inhumane, and they're inexcusable,
    and they'll be punished, but they don't represent America. They
    certainly don't represent Americans or the American military.
        Iraq has made enormous progress, and it's getting ignored.
    The schools are open, the hospitals are open, the oil is
    pumping, they've got a new currency, the ministries have been
    formed, there are governing councils for the provinces, there
    are city councils for the cities, 80 to 90 percent of the
    people in that country are being governed by local councils
    over them. And all we hear about are the problems. And there
    are problems.
        And I've got to tell you, there are going to be more
    revelations of abuse that'll come out in the days and weeks
    ahead, because we've got six investigations looking into all of
    this. And they will not come out because of the media being so
    wonderful and investigating everything; they'll come out
    because the United States military investigations will let them
    out, and they'll announce them, and that's a good thing, and
    that tells a whale of a lot about our country.
        I've kind of stopped reading the press, frankly. I'm sure
    you can understand why. I've been reading a book about the
    Civil War and Ulysses Grant, and I think about the--and I'm not
    going to compare the two, don't get me wrong, and don't
    somebody rush off and say, ``He doesn't get the difference
    between Iraq and the Civil War''--the fact of the matter is
    that casualties were high, the same kinds of concerns that were
    expressed here were expressed then. They weren't in e-mails,
    they weren't in digital cameras; they were in diaries and
    letters. They were by families, they were by soldiers,
    politicians. And they were all across the spectrum. They were
    despairing, they were hopeful, they were concerned, they were
    combative. And, in the end, they were losing 1,000, 1,500,
    2,000 casualties in a 3-day war. The carnage was horrendous.
    And it was worth it.
        And I understand concern. By golly, I've got it. But I look
    at Afghanistan, 25 million people liberated, women voting, able
    to go to a doctor. And I look at Iraq, and I--all I can say is,
    I hope it comes out well. And I believe it will. And we're
    going to keep at it.
        Thank you.
        Senator Stevens. Well, thank you very much, and we
    appreciate your comments. And, God willing, we hope you're
    right. We certainly pray you're right, as a matter of fact.
        This hearing concludes our planned hearings on the fiscal
    year 2005 Defense budget. I have stated that the subcommittee
    will schedule a hearing on the forthcoming request when more
    details are available. We will have to do that before we mark-
    up.

                         ADDITIONAL COMMITTEE QUESTIONS

        We thank you all for what you've done for us. We do have a
    series of questions that have been submitted for the record, as
    you heard. We appreciate if you'd submit those. We're in no
    rush. We actually won't close this record until sometime the
    end of the month.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                 Questions Submitted to Hon. Donald H. Rumsfeld
                   Questions Submitted by Senator Ted Stevens

                              PROCUREMENT BOW WAVE

        Question. The Department projects that military personnel costs
    will grow from $104.8 to $120.4 billion during the same period absent
    an increase in end strength. That may be optimistic given that basic
    pay increased 29 percent from fiscal year 2000 to 2004. None of the
    projected costs described above capture funding for on-going operations
    in Iraq and Afghanistan.
        According to current plans, procurement funding will increase by
    fifty percent from fiscal year 2005 to 2009. This level of funding is
    required if the nation is to fund full rate production of the F-22,
    continued development of the Joint Strike Fighter, fielding of the
    Future Combat System, our commitment to space surveillance and access,
    and meet minimum levels of investment in the shipbuilding industrial
    base. I worry that we can afford all of these programs while fighting a
    war in Iraq and manning the force. Do you consider this level of
    investment to be sustainable?
        Answer. Yes, I believe the defense investment projected in the
    President's budget for fiscal year 2005-09 is sustainable. Total
    defense funding for these years includes only moderate real growth--
    about 2.5 percent per year. Admittedly, we do not know the future costs
    of possible military operations in Iraq and Afghanistan, or for other
    contingency operations. But we would not want to allow those possible
    costs keep us from prudent investments in the future--especially
    investments to develop and field new capabilities most suited to 21st
    century threats, most notably terrorism.

                       CAPTURED ENEMY AMMUNITION IN IRAQ

        Question. The Committee provided an additional $165 million in the
    fiscal year 2004 supplemental for the disposal effort. In total, the
    Defense Department has awarded $285 million in fiscal year 2004
    contracts for the demilitarization of captured enemy ammunition in
    Iraq.
        On my recent trip to Iraq, I was shocked to learn about the number
    and size of munitions dumps in the country. I am especially concerned
    about the sites that are partially secured. Could you please give us an
    update on efforts to secure these sites and dispose of captured enemy
    ammunition?
        Answer. There are an estimated 600,000 short tons (ST) of munitions
    from the Saddam era in Iraq. We have over 6,000 soldiers and
    contractors dedicated to securing, transporting, guarding, and
    destroying captured enemy munitions. As of June 18, we have located
    9,693 weapons caches. Of those, 9,631 weapons caches have been cleared
    and 195,141 ST of munitions have been destroyed. There are an
    additional 149,861 ST on hand being evaluated to determine the best
    disposal methods or their reutilization potential. There are 62 weapons
    caches remaining to be cleared, of those 21 are classified as secured
    and the remaining 41 are classified as partially secured. Secured
    caches have 24 hour coverage by armed guards. Partially secured sites
    contain ammunition that is extremely difficult to remove quickly, such
    as aircraft ordnance and large caliber ammunition or missiles and are
    monitored by periodic patrols, reconnaissance and surveillance.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

                                  RDT&E BUDGET

        Question. I believe superior technologies can be applied to better
    protect our forces.
        To what extent does this budget fund high-energy laser solutions to
    problems such as artillery and rocket attack?
        Answer. As part of the on-going evaluation of high energy laser
    technology for a range of potential missions, the Department of Defense
    supports efforts to establish the technical feasibility and demonstrate
    the military effectiveness of high energy laser systems in tactical
    applications. Specific to the threat posed by artillery and rocket
    attack, these efforts include both focused programs and more general
    tactical high energy laser technology investigations that are also
    relevant to this threat.
        The Army continues to support field testing and evaluation of the
    ground-based Tactical High Energy Laser (THEL), which is a deuterium
    fluoride chemical laser-based high energy laser system jointly
    developed and funded with Israel. The THEL system is located at the
    High Energy Laser Systems Test Facility at White Sands Missile Range,
    NM, and continues to be useful in assessing potential benefits of high-
    energy laser systems on the tactical battlefield. Most recently, the
    laser successfully detected, acquired, tracked, engaged and destroyed
    155 mm artillery rounds fired from a howitzer.
        On May 29, 2001, Israel requested the Department of Defense to
    support the development of a complete Mobile Tactical High Energy Laser
    (MTHEL) prototype by fiscal year 2007. The Army has committed $340.4
    million in fiscal year 2004-09 to support the combined MTHEL prototype
    development and testing effort. Israel is expected to match the United
    States' research and development investment for the laser. The program
    objective is to design, develop, fabricate, and test a working
    prototype weapon system by fiscal year 2007 based on demonstrated high
    energy deuterium fluoride (DF) chemical laser technology. MTHEL will be
    the first mobile, integrated Directed Energy Weapon (DEW) system
    capable of acquiring, tracking, engaging and destroying rocket,
    artillery, and mortar (RAM) projectiles, unmanned aerial vehicles
    (UAVs), cruise missiles, and theater ballistic missiles. No fielded
    capability currently exists to counter the RAM threat. This prototype,
    as the HEL pathfinder system, will enable the Army to develop an
    operational understanding of the tactics, techniques and procedures
    (TTPs) necessary to effectively employ this new weapon class. Results
    of the prototype testing in fiscal year 2008 and fiscal year 2009 will
    be used to develop the pathway for future HEL weapon systems' evolution
    into the Army's emerging Enhanced Area Air Defense System (EAADS).
        Army, Air Force, and HEL Joint Technology Office S&T funding
    supports the development and demonstration of enabling technologies to
    provide options for improved performance, better efficiency, lighter
    weight, lower costs, and improved operational suitability for future
    tactical HEL systems. A significant initiative ($39.4 million in fiscal
    year 2004-05) is the on-going Joint High Power Solid-State Laser
    Program (jointly funded by the HEL Joint Technology Office, the Air
    Force, and the Army), which has a goal to demonstrate laser power
    scaling to 25 kW for three different technical approaches within the
    next year and longer-term scaling to the 100 kW level. Development and
    demonstration efforts are also addressing critical technologies for
    tactical beam control, HEL optical components, and tactical target
    effects and vulnerability assessment.
        Question. What resources does this budget provide for new
    technologies to help detect improvised explosive devices that have
    killed and maimed too many of our troops?
        Answer. Most of our efforts to date in developing technologies to
    detect improvised explosive devices (IEDs) have resulted from internal
    reprogramming actions and requests for supplemental funding. To date we
    have invested about $10 million in technologies intended for IED
    detection, with most of the efforts targeted to detecting changes in
    the ground where IEDs are buried or in detecting concealed weapons such
    as suicide bombers or vehicle-borne explosives. Specific project
    details are classified and have been presented in closed forums.
    Organizationally, the Force Protection Working Group and the Combating
    Terrorism Technology Task Force are working directly with
    representatives from the Central Command and Special Operations Command
    to examine technology alternatives to address immediate operational
    needs to support the Global War on Terrorism.
        Within the Military Services, the Army's Rapid Equipment Force
    (REP) and Army IED Task Force are helping focus Army investments in
    detecting IEDs. Specifically, the IED Task Force focuses on counter IED
    Tactics, Techniques, and Procedures, and compiles and disseminates
    ``Blue'' counter-IED TTPs and corresponding ``Red'' TTPs through their
    cell at the Center For Army Lessons Learned. This TF maintains an
    extensive classified website of TTPs and has recently produced an IED
    training module. In addition, the Army continues to investigate
    improved methods for Airborne IED/Mine Detection, with funding to
    improve change detection software, cueing algorithms, and
    identification of sensors that provide high resolution imagery at
    typical aircraft (manned and unmanned) altitudes.
        In deploying the 1MEF to Iraq, the Navy and Marine Corps are
    currently reprogramming funds to deal with detection and defeat of
    IEDs. In addition, the Navy is initiating a network-centric effort to
    provide forces the means to detect, classify, and locate IEDs and other
    tactical threats; and an initiative to exploit the properties of the
    terahertz band for detection of IEDs. The goal is to achieve sufficient
    precision, low false-alarm rate, and stand-off distance to permit
    deployment of tactically useful countermeasures to IEDs and related
    threats.
        The Counter Bomb/Counter Bomber (CB\2\) Advanced Concept Technology
    Demonstration (ACTD) program will develop and assesses technologies
    that can be deployed in a layered system of countermeasures that
    assess, detect, identify, and mitigate the terrorist threat from an
    IED. The threat operations of interest for this ACTD include human-
    carried, vehicle-delivered, and leave-behind explosives.
        Question. Finally, the urban environment of Iraq exposes our
    personnel to the danger of snipers. Do you agree that new anti-sniper
    systems that take advantage of high-energy laser and other cutting-edge
    technologies should be a high priority?
        Answer. There are a number of counter-sniper technologies being
    assessed within the Department, including acoustic, infrared (IR), and
    laser capabilities. Experience indicates the effectiveness of these
    systems is driven by terrain and environmental conditions, with
    fielding options based on operational scenarios. For example:
      --The Naval Research Laboratory VIPER system detects the unique IR
            signature of a muzzle blast and permits the precision location
            of the source of gunfire. The gun may be fired on or off axis
            with respect to the sensor. Gun firings within closed
            structures having windows and in partially obscured
            environments can also be detected. Detection and location is
            limited to line of sight. A directed video sensor permits
            zooming in on the firing location.
      --The Overwatch Advanced Concept Technology Demonstration will
            demonstrate an operational sensor and targeting system's
            capability to detect, classify and accurately locate direct
            fire weapons in real-time and transmit that information to a
            command and control element in support of ground forces
            operating in urban and complex terrain. The sensor targeting
            system will provide a capability to ground forces to improve
            target acquisition, detect multiple types of weapons firing,
            locate snipers in real time, and decrease counterfire reaction
            time.
      --The Air Force Research Laboratory's Battlefield Optical
            Surveillance System, or BOSS, is a grouping of lasers, optics,
            sensors and communications equipment mounted on a High Mobility
            Multi-purpose Wheeled Vehicle. While initially envisioned as a
            mobile counter sniper platform, BOSS has evolved into a working
            concept of a covert surveillance/detection system with the
            ability to visibly--or invisibly--designate a battlefield
            threat. BOSS utilizes forward looking infrared, an IR camera
            illuminator to light up an area of interest, a visible laser to
            designate a threatening individual, and a microwave relay to
            transmit data to a command post.
      --The Joint Non-Lethal Weapons Directorate is developing a new
            concept that uses pulsed electromagnetic energy in the optical
            spectrum to distract, deter and dissuade an adversary from
            extended range. The object of the Pulsed Energy Projectile
            (PEP) program is to develop and demonstrate the technology
            necessary to produce a crew served, counter personnel non-
            lethal directed energy weapon providing controllable bio-
            effects to deter, disable, and distract individuals. The device
            directs an invisible induced plasma pulse at a target that will
            create a flash-bang near the intended target.

                           STATUS OF FORCES AGREEMENT

        Question. Questions remain about the role of U.S. military forces
    that will still be in Iraq after the transfer of sovereignty.
        Can you describe status of forces agreement that will dictate how
    our troops will be able to operate in Iraq after June 30th?
        Answer. During the period of the Iraqi Interim Government (June 30,
    2004 until the election of a Transitional National Assembly no later
    than January 31, 2005), U.S. forces will operate under current
    authorities, i.e., U.N. Security Council Resolution 1511 and Coalition
    Provisional Authority Order 17. After the election of the Assembly, we
    expect to negotiate the role and status of United States and other
    multinational forces with the Iraqi Transitional Government that will
    be formed by the Assembly.
        In addition to these authorities, the new Interim Government has
    already stated its understanding that multinational forces must remain
    in Iraq until Iraqi security forces can assume their full
    responsibilities.
        Question. Does the agreement provide adequate protections for our
    service personnel should disputes arise over the propriety of their
    actions?
        Answer. The current authorities, under which United States and
    other multinational forces will operate until early 2005, provide
    adequate protection. We will require the same level of protection in
    the agreement we will negotiate with the Iraqi Transitional Government.

                           CHEMICAL DEMILITARIZATION

        Question. I believe the Department must increase the top-line
    funding for chemical demilitarization in order to keep its commitment
    to the citizens who reside near America's chemical weapons stockpiles.
    Neither my constituents nor I will tolerate continued mismanagement and
    under funding of the efforts to get rid of these chemical stockpiles.
        Please explain why the Department of Defense cut funding for
    chemical demilitarization despite the Department's directive, signed by
    Under Secretary of Defense for Acquisition, Logistics and Technology
    Pete Aldridge, for acceleration of demilitarization of chemical
    weapons. Is the Aldridge directive in effect, and where does the
    Department stand on maintaining its schedule for destruction of
    chemical stockpiles?
        Answer. The Department realigned funds in its fiscal year 2005
    request to help ensure we meet the Chemical Weapons Convention extended
    45 percent destruction deadline of December 2007. When the previous
    Under Secretary of Defense for Acquisition, Technology and Logistics,
    USD (AT&L), directed the Program Manager for Assembled Chemical Weapons
    Alternatives (PM ACWA) to accelerate the destruction of the Pueblo,
    Colorado, chemical weapons stockpile, this was based on PM ACWA
    pursuing four recommended acceleration options: (1) an accelerated
    contract award; (2) an expedited permitting approach; (3) enhanced
    reconfiguration of the assembled chemical munitions; and (4) offsite
    treatment of secondary wastes. The first two acceleration options were
    fully implemented and have reduced time and generated a cost avoidance
    during this phase of the project. However, Colorado state regulators
    indicated they require a separate permit for enhanced reconfiguration,
    therefore eliminating the acceleration benefits of option (3).
    Additionally, the Colorado Citizens Advisory Committee, in its capacity
    as the voice for the Pueblo community, for the most part rejected
    option (4). PM ACWA is therefore no longer pursuing these two
    acceleration options. Regardless, the USD (AT&L) direction remains in
    effect. Other acceleration options are always welcome for
    consideration; however any option which requires additional resources,
    such as major design changes, must also be validated by the Department.
    The Department will continue to make every effort to comply with the
    Chemical Weapons Convention destruction deadline requirements.
        Question. The Department's cuts to the ACWA program have the
    potential to slow demilitarization at certain sites by roughly a year.
    How can the Department claim to support accelerate clean up while at
    the same time cannibalizing the ACWA budget to pay for mismanagement
    and cost overruns at incineration sites?
        Answer. The Department realigned funds in its fiscal year 2005
    request to help ensure we meet the Chemical Weapons Convention extended
    45 percent destruction deadline of December 2007. Meanwhile, the full
    effects of this internal realignment on the Pueblo Chemical Agent-
    Destruction Pilot Plant (PCAPP) project have yet to be quantified.
    While design and construction of the process building may be delayed,
    efforts are underway to begin construction of the support buildings.
    Additionally, a recent analysis has found there are viable design
    concept options less costly than the current design concept that can
    complete destruction of the Pueblo chemical weapons stockpile by the
    same time.
        Question. Please explain why the Department cut the budget for
    chemical demilitarization between the fiscal year 2005 estimate and the
    submission of the fiscal year 2005 budget to Congress.
        Answer. The Department did not cut the fiscal year 2005 budget. The
    Chemical Demilitarization Program fiscal year 2005 estimate was
    $1,456,876,000, and the overall fiscal year 2005 submission was
    $1,453,876,000. Due to the concerns of the House and Senate
    Authorization Committees that all funds for the Chemical
    Demilitarization Program should be appropriated in a Defense-wide
    account, the Department realigned the Military Construction request to
    a separate DOD-wide account. Accordingly, $81.9 million was submitted
    in the Chem Demil Construction, Defense account. Also, $3 million was
    decremented in the fiscal year 2005 submission due to non-pay inflation
    adjustments. Therefore, the difference between the two submissions was
    $3 million.
        Question. Please explain why the department transferred $147
    million in funding from the ACWA program to fund cost overruns at the
    Office of Elimination of Chemical Weapons' incineration sites?
        Answer. While preparing the fiscal year 2005 President's Budget,
    the Department moved $147 million of unexecutable funds from the ACWA
    Program research and development budget activity to cover shortfalls in
    other areas of the Chemical Demilitarization Program to help ensure we
    meet the Chemical Weapons Convention extended 45 percent destruction
    deadline of December 2007. This was not a punitive action and not
    intended or expected to slow down our demilitarization actions at
    Pueblo. Sufficient funds will be available in fiscal year 2005 to
    proceed with the Pueblo effort, to include $45 million for Military
    Construction projects.
        Question. One of the great successes of the ACWA program has been
    the robust involvement of the local community. ACWA's efforts to reach
    out to local leaders and citizens have invested them in the project at
    BGAD and help to build an unprecedented amount of trust in the Chemical
    Demilitarization program. Why, then, am I hearing talk of cutting
    funding to the citizen involvement programs underway at stockpile
    communities such as the Chemical Destruction Community Advisory Board
    in Kentucky?
        Answer. The Department has no intention of cutting funding to the
    Citizens Advisory Commissions (CACs) in any of the eight states
    possessing chemical weapons stockpiles. The Department is required to
    provide this funding under section 172(g) of Public law 102-484, and
    fully intends to continue to comply.
                                     ______

                  Questions Submitted by Senator Conrad Burns

        Question. It is more important now than ever that Iraqis see other
    Iraqis in military positions and other areas of law enforcement. Would
    you provide this subcommittee with an update on progress in training
    the Iraqi Police Force, the Iraqi Civil Defense Corps and the Iraqi
    Army? Are you finding that you have adequate facilities, equipment and
    resources to precede with this training and then transition them into
    operational forces?
        Answer. The Multi-National Security Transition Command-Iraq (MNSTC-
    I), commanded by LTG Dave Petraeus, in coordination with the Iraqi MOI
    and MOD, is responsible for manning, training, equipping, mentoring and
    certifying the Iraqi Security Forces. Training, equipping and mentoring
    programs are being aggressively implemented to develop internal and
    external Iraqi security force capability.
        As of July 25, 2004, the Iraq Security Forces (ISF) is gradually
    and steadily developing increased capability to assume internal
    security responsibility. Forces under the Minister of Interior include
    the Iraqi Police Service (IPS) and the Department of Border Enforcement
    (DBE). Thirty percent of the 89,000 man IPS have completed either an 8
    week basic course for new recruits, at the Jordan International Police
    Training Center or the Baghdad Police Service Academy, or the three
    week Transition Integration Program (TIP) for veteran officers,
    accomplished in provincial training facilities. Advanced training being
    accomplished at the IPS Adnon Training Facility in Baghdad includes
    Leadership and Criminal Investigation as well as specialty courses for
    the Emergency Response Unit and Counter-Terrorism Unit. Equipment,
    including weapons, body armor, communications and vehicles is being
    delivered at a steady pace.
        The Department of Border Enforcement is manned at 85 percent of the
    desired end state. Equipment and training similar to the IPS programs
    is being provided to the Iraqi Border Patrol (IBP) of the DBE.
    Infrastructure improvements to border forts are also progressing with
    contracts let to rebuild Class A and B entry and denial points along
    the Syrian, Saudi and Iranian borders.
        Under the current plan, 100 percent of the training required to man
    the MOI forces will be completed by June 2005. Equipment deliveries
    should be completed by April 2005.
        Under the Ministry of Defense (MOD), the Iraqi Civil Defense Force
    has been renamed as the Iraqi National Guard (ING). There are 45 ING
    Battalions operational, with 40 manned at over 75 percent of personnel
    requirements. As with the MOI forces, ING equipment is flowing
    steadily. All 45 Battalions will be fully operational by December 2005.
        Five of 27 Brigades of the Iraqi Army (IA) are operational or in
    training, including the 1st Brigade of the Iraqi Intervention Force
    (IIF) currently operating in Baghdad. The IIF was created to conduct
    internal security tasking after the events of April and May 2004 in
    Fallujah and the Center South. Equipment is delivered to the IA
    battalions as they complete training. Under the current schedule, 27
    Battalions of the IA will be operational by February 2005.
        The Iraqi Coastal Defense Force (ICDF) has recruited 71 percent of
    the required manning and is equipped with 5 patrol boats and 10 Rigid
    Hull Inflatable Boats (RHIBs). They are currently conducting supervised
    daytime operations. They are on track for full operational capability
    by October 2005.
        The Iraqi Air Force will consist of a reconnaissance squadron, a C-
    130 transport squadron and a UH-1 Huey helicopter squadron. Training is
    underway or completed for 23 percent of the pilots and mechanics. Two
    Seeker reconnaissance aircraft have been purchased and will be
    operational by September 2004.
        MNSTC-I is aggressively ensuring that Iraqis take responsibility
    for developing the capability of their own forces. MNSTC-I, in
    coordination with the Chief of Mission, provides mentoring to the
    staffs of the Iraqi Joint Headquarters (JHQ), the MOD and the MOI to
    develop command and control capability and implement Iraqi policy for
    employment of the ISF. As C\2\ capability grows, combined with the
    ongoing ISF training and equipping programs, the Interim Iraqi
    Government (IIG) will be able to assume control of security
    responsibilities at the local, then provincial, then national level
    supported in the background by the Coalition. Finally, NATO has agreed
    to provide additional training resources to the IIG. MNFI is
    coordinating with NATO to determine the breadth and scope of that
    assistance.
        Question. Last year, the Air Force proposed a $21 billion lease of
    100 Boeing 767's, which would be converted to KC-767 tankers. The Air
    Force and conference reached a compromise last year, included in the
    Fiscal Year 2004 Defense Authorization Act, allowing the Air Force to
    lease 20 tankers from Boeing and buy 80 under a traditional procurement
    program. However, negotiations for a final contract were put on hold at
    the end of 2003, pending the outcome of the DOD Inspector General
    investigation. Exactly where are we now in respect to the KC-767 tanker
    issue and what is the plan moving forward?
        Answer. In response to the tasking of the Deputy Secretary of
    Defense, and associated with the hold on the proposed 767 Tanker Lease/
    Buy, the results of three studies have been provided to the Department.
    The studies are: The Aerial Refueling Defense Science Board (DSB) Task
    Force Study; the Analysis of Lessons Learned from the United States Air
    Force Tanker Lease Program (TLP)-Industrial College of the Armed
    Forces/National Defense University (ICAF/NDU); and the DOD Inspector
    General Audit Report, ``Acquisition of the Boeing KC-767A Tanker
    Aircraft.'' All three studies recommended that the Department readdress
    how it implements and controls innovative acquisition processes,
    including leasing. In light of this, the Acting USD(AT&L) directed the
    President, DAU chair a working group to formulate recommendations based
    on the results of these three studies that will result in changes to
    the DOD 5000 Series, Federal Acquisition Regulation (FAR)/Defense
    Federal Acquisition Regulation (DFAR), and other acquisition related
    documents. Recommendations are due to USD(AT&L) not later than
    September 1, 2004. In addition, an Analysis of Alternatives for Tanker
    Recapitalization and the ongoing Mobility Capabilities Study have been
    accelerated. The overall goal of these efforts is to more fully
    understand the tanker requirements and options for meeting those
    requirements, before recapitalizing the tanker fleet.
        Question. This year, eight active duty, eight Air Force Reserve,
    and 18 Air National Guard units provided 1,300 tanker sorties
    offloading more than 32 million pounds of fuel for missions related to
    Operation Noble Eagle (ONE). Last year, the Air Force brought personnel
    and materiel into Iraq and Afghanistan via 7,410 sorties. Over 4,100
    passengers and 487 tons of cargo were moved by airmen operating at
    various Tanker Airlift Control elements in and around Afghanistan. Are
    you finding that you're tactical and strategic airlift capabilities
    adequate? Are tactical and strategic airlift funded adequately in the
    fiscal year 2005 budget?
        Answer. Tactical airlift capabilities as a whole are adequate to
    prosecute the national defense strategy. Moderate areas of concern
    still exist such as aircraft survivability in current and future
    dynamic environments. However, fleet capability is currently adequate.
        Strategic airlift capabilities present a different picture. The Air
    Force can provide enough capability to meet the limited requirements
    mentioned in your question, but lacks the capacity to fully prosecute
    the national defense strategy. Given fiscal realities, the fiscal year
    2005 budget adequately addresses the capability shortfall and a roadmap
    is in place to improve. Finally, the Mobility Capabilities Study (MCS)
    due for release in fiscal year 2005 will update the airlift
    requirements.
        Question. Can you give me an idea of when the Strategic
    Capabilities Assessment (SCA) will be completed?
        Answer. The term ``Strategic Capabilities Assessment'' refers to a
    planned, periodic review of progress in implementing the findings of
    the December 2001 Nuclear Posture Review. The first of the planned
    reviews was completed earlier this spring. The draft results are still
    being reviewed by senior DOD officials.
                                     ______

                Questions Submitted to General Richard B. Myers
                   Question Submitted by Senator Ted Stevens

                       CAPTURED ENEMY AMMUNITION IN IRAQ

        Question. Over 770,000 short tons of enemy ammunition have been
    discovered in Iraq. Continued finds could increase the total number to
    over 1 million short tons.
        The captured ammunition is stored at 72 sites throughout the
    country. Of these sites, there are 23 secured sites and 49 partially
    secured sites. A secured site is defined as having a 24/7 Coalition
    presence. Partially secured is defined as periodic patrolling/
    surveillance and either fenced or bermed.
        It has been reported and confirmed that weapons, ammunition and
    explosives at many partially secured ammo dumps are easily available to
    enemy combatants that has the means to load and transport them.
        The Army Corps of Engineers is responsible for processing and
    demilitarizing captured ammunition in Iraq. Security is their top
    priority. They plan to have all ammo secured by the end of September.
    The Corps of Engineers is safely disposing of approximately 600 tons
    per day. Under the best case scenario, it will take three years to
    complete the disposal process.
        The Committee provided an additional $165 million in the fiscal
    year 2004 supplemental for the disposal effort. In total, the Defense
    Department has awarded $285 million in fiscal year 2004 contracts for
    the demilitarization of captured enemy ammunition in Iraq.
        Soldiers and Marines are uncovering new weapons caches on almost a
    daily basis. How are you securing and disposing of these recently
    captured munitions?
        Answer. Since January 1, 2004, we have found 2,281 weapons caches.
    Those weapons caches are evaluated based on the type and quantity of
    munitions. The most dangerous munitions, such as rocket-propelled
    grenades, mortar and artillery rounds (used for making improvised
    explosive devices) and surface to air missiles are transported to six
    depots for safe secure storage and eventual destruction. There is one
    depot per divisional sector. Munitions that are deemed unsafe or
    potentially booby trapped are destroyed at the site of discovery.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

                               HOMELAND SECURITY

        Question. Since the attacks of September 11, 2001, the National
    Guard and Reserves have played an integral role in securing the
    homeland. This has been particularly important to border states like
    New Mexico where terrorist infiltration is a constant concern.
        General Myers, do you expect that the National Guard will maintain
    significant border protection responsibilities?
        Answer. No. Our National Guard troops were only used in the
    aftermath of the 9/11 attacks as a stopgap measure. There is no long-
    term plan to engage them in border security operations. Border security
    is not the primary responsibility of the military.
        Question. What new roles and missions (such as UAV operations) will
    they be assuming to enhance border protection?
        Answer. The National Guard will not be engaged in border protection
    operations.

                             CONCLUSION OF HEARINGS

        Senator Stevens. We appreciate your concern. And, again, we
    generally thank you. I mean, you've taken a lot of time with us
    today. Did you know that every member of this subcommittee was
    here and asked questions of you? And that's probably a record
    for this subcommittee on these wrap-up hearings that we have.
        Yes, as Senator Inouye says, it's the first time they all
    came for the wrap-up.
        Thank you very much.
        General Myers. Thank you, Chairman. Thank you, Senator
    Inouye.
        Secretary Rumsfeld. Thank you very much.
        [Whereupon, at 12:20 p.m., Wednesday, May 12, 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

    Air Force Sergeants Association, Prepared Statement of the.......   569
    American Museum of Natural History, Prepared Statement of the....   573
    Armen, Harry, President-elect, American Society of Mechanical
      Engineers......................................................   511
        Prepared Statement of........................................   513

    Baggeroer, Arthur B., Massachusetts Institute of Technology on
      behalf of the Consortium for Oceanographic Research and
      Education......................................................   460
        Prepared Statement of........................................   462
    Barnes, Master Chief Joseph L., USN (ret.), National Executive
      Secretary, Fleet Reserve Association...........................   454
        Prepared Statement of........................................   456
    Benge, Seth Allan, Legislative Director, Reserve Enlisted
      Association on behalf of the National Military Veterans
      Alliance.......................................................   515
        Prepared Statement of........................................   516
    Blum, Lieutenant General H. Steven, Chief, National Guard Bureau,
      Department of Defense..........................................   215
        Prepared Statement of........................................   221
        Questions Submitted to.......................................   271
    Bond, Senator Christopher S., U.S. Senator From Missouri:
        Prepared Statement of........................................   629
        Statement of.................................................   216
    Bramson, James B., D.D.S., Executive Director, American Dental
      Associa-
      tion...........................................................   528
        Prepared Statement of........................................   530
    Brannon, Major General Barbara C., Assistant Air Force Surgeon
      General, Nursing Services, Medical Programs, Department of
      Defense........................................................   410
        Prepared Statement of........................................   412
    Brownlee, Hon. Les, Acting Secretary of the Army, Department of
      the Army, Department of Defense................................    39
        Prepared Statement of........................................    44
        Questions Submitted to.......................................    86
    Burns, Senator Conrad, U.S. Senator From Montana:
        Prepared Statements of........................19, 72, 169, 217, 317
        Questions Submitted by................................272, 273, 671
        Statement of.................................................   317
    Butler, Benjamin H., Legislative Director, National Association
      for Uniformed Services.........................................   506
        Prepared Statement of........................................   508
    Byrd, Senator Robert C., U.S. Senator From West Virginia,
      Statement of...................................................     3

    Cartwright, Lieutenant General James E., U.S. Marine Corps, J-8,
      Joint Chiefs of Staff, Department of Defense...................     1
    Chu, Dr. David S., Under Secretary of Defense (Personnel and
      Readiness), Office of the Secretary, Department of Defense.....   577
    Clark, Admiral Vernon, Chief of Naval Operations, Department of
      the Navy, Department of Defense................................   105
        Prepared Statement of........................................   108
    Cochran, Senator Thad, U.S. Senator From Mississippi:
        Prepared Statement of........................................   217
        Questions Submitted by.....................................165, 343
        Statement of.................................................    90
    Cotton, Vice Admiral John G., Chief, Naval Reserve, Department of
      Defense........................................................   287
        Prepared Statement of........................................   288
    Cowan, Vice Admiral Michael L., Surgeon General, United States
      Navy, Medical Programs, Department of Defense..................   358
        Prepared Statement of........................................   360
        Questions Submitted to.......................................   425

    Daly, Petty Officer 1st Class Kyle, United States Naval Sea Cadet
      Corps..........................................................   533
    Domenici, Senator Pete V., U.S. Senator From New Mexico,
      Questions Submitted by................86, 87, 163, 213, 214, 668, 673
    Durbin, Senator Richard J., U.S. Senator From Illinois, Questions
      Submitted by.................................................422, 425

    England, Hon. Gordon R., Secretary, United States Navy,
      Department of the Navy, Department of Defense..................    89
        Prepared Statement of........................................    92
        Questions Submitted to.......................................   163
        Summary Statement of.........................................    91
    Evans, David on behalf of Illinois Neurofibromatosis, Inc........   498
        Prepared Statement of........................................   500

    Feinstein, Senator Dianne, U.S. Senator From California:
        Prepared Statement of........................................   334
        Questions Submitted by................................424, 426, 427
    Foil, Martin B., Jr., Member, Board of Directors, National Brain
      Injury Research, Treatment, & Training Foundation (NBIRTT).....   520
        Prepared Statement of........................................   521

    Galloway, Kenneth F., Dean, School of Engineering, and Professor
      of Electrical Engineering, Vanderbilt University on behalf of
      the Association of American Universities.......................   450
        Prepared Statement of........................................   451
    Gregg, Senator Judd, U.S. Senator From New Hampshire, Questions
      Submitted by...................................................    86
    Gustke, Colonel Deborah A., Assistant Chief, Army Nurse Corps,
      Medical Programs, Department of Defense........................   396
        Prepared Statement of........................................   398

    Hagee, General Michael W., Commandant, United States Marine
      Corps, Department of the Navy, Department of Defense...........   122
        Biographical Sketch of.......................................   139
        Prepared Statement of........................................   124
        Question Submitted to........................................   165
    Hall, Howard R., Vice President, Joslin Diabetes Center..........   441
        Prepared Statement of........................................   442
    Hanson, Captain Marshall, United States Naval Reserve (ret.),
      Chairman, Associations for America's Defense (A4AD)............   492
        Prepared Statement of........................................   493
    Helmly, Lieutenant General James R., Chief, Army Reserve,
      Department of Defense..........................................   275
        Prepared Statement of........................................   276
    Henry, Heather French, Miss America 2000 on behalf of the
      National Prostate Cancer Coalition.............................   540
        Prepared Statement of........................................   542
    Hurd, Captain Robert C., United States Navy (ret.), Congressional
      Liaison, United States Naval Sea Cadet Corps...................   533
        Prepared Statement of........................................   535
    Hutchison, Senator Kay Bailey, U.S. Senator From Texas:
        Prepared Statement of........................................    40
        Statement of.................................................    40

    Inouye, Senator Daniel K., U.S. Senator From Hawaii:
        Prepared Statements of............................58, 168, 219, 316
        Questions Submitted by.....................................271, 345
        Statements of....................2, 57, 90, 168, 218, 316, 348, 578
    James, Lieutenant General Daniel, III, Director, Air National
      Guard, National Guard Bureau, Department of Defense............   257
        Prepared Statement of........................................   238
        Questions Submitted to.......................................   273
    Jumper, General John P., Chief of Staff, Department of the Air
      Force, Department of Defense...................................   167
        Questions Submitted to.......................................   214
        Statement of.................................................   195

    Kadish, Lieutenant General Ronald T., U.S. Air Force, Director,
      Missile Defense Agency, Department of Defense..................   315
        Prepared Statement of........................................   319
        Statement of.................................................   318

    Lanzillotta, Lawrence, Comptroller, Office of the Secretary,
      Department of Defense..........................................   577
    Leahy, Senator Patrick J., U.S. Senator From Vermont:
        Questions Submitted by.....................................272, 420
        Statements of..............................................217, 349
    Lescavage, Rear Admiral Nancy J., Director, Navy Nurse Corps,
      Medical Programs, Department of Defense........................   403
        Prepared Statement of........................................   405

    McCarthy, Lieutenant General Dennis M., Commander, Marine Forces
      Reserve, Department of Defense.................................   293
        Prepared Statement of........................................   294
    McIntosh, Major General Robert A., United States Air Force
      Reserve (ret.), Executive Director, Reserve Officers
      Association of the United States...............................   466
        Prepared Statement of........................................   467
    McKibban, Tom L., Certified Registered Nurse Anesthetist, MS,
      President, American Association of Nurse Anesthetists..........   473
        Prepared Statement of........................................   474
    Myers, General Richard B., Chairman, Joint Chief of Staff, Office
      of the Secretary, Department of Defense........................   577
        Prepared Statement of........................................   595
        Questions Submitted to.......................................   673
        Statement of.................................................   593

    Odom, Dr. Jerome, Provost, University of South Carolina on behalf
      of the Coalition of EPSCoR States..............................   553
        Prepared Statement of........................................   554

    Peake, Lieutenant General James B., Surgeon General, United
      States Army, Medical Programs, Department of Defense...........   347
        Prepared Statement of........................................   352
        Questions Submitted to.......................................   420
    Puzon, Captain Ike, United States Naval Reserve (ret.), Director
      of Legislation, Naval Reserve Association......................   546
        Prepared Statement of........................................   547

    Raezer, Joyce Wessel, Director, Government Relations, the
      National Military Family Association...........................   479
        Prepared Statement of........................................   480
    Roche, Hon. James G., Secretary, Department of the Air Force,
      Department of Defense..........................................   167
        Prepared Statement of........................................   178
        Question Submitted to........................................   213
    Rubin, Janet, M.D., on behalf of the National Coalition for
      Osteoporosis and Related Bone Diseases.........................   437
        Prepared Statement of........................................   438
    Rumsfeld, Hon. Donald H., Secretary, Office of the Secretary,
      Department of Defense..........................................   577
        Prepared Statement of........................................   583
        Questions Submitted to.......................................   667

    Sager, Christopher, Ph.D., on behalf of the American
      Psychological Association......................................   445
        Prepared Statement of........................................   446
    Schoomaker, General Peter T., Chief of Staff, United States Army,
      Department of the Army, Department of Defense..................    39
        Prepared Statement of........................................    44
        Questions Submitted to.......................................    87
    Schultz, Lieutenant General Roger C., Director, Army National
      Guard, National Guard Bureau, Department of Defense............   256
        Prepared Statement of........................................   224
        Questions Submitted to.......................................   272
    Schwartz, Sue, R.N., Chairperson, Health Care Committee, The
      Military Coalition.............................................   429
        Prepared Statement of........................................   431
    Shelby, Senator Richard C., U.S. Senator From Alabama, Statement
      of.............................................................   316
    Sherrard, Lieutenant General James E., III, Chief, Air Force
      Reserve, Department of Defense.................................   300
        Prepared Statement of........................................   302
    Smith, Melanie K., Director, Public Policy and Advocacy, Lymphoma
      Research Foundation............................................   488
        Prepared Statement of........................................   490
    Stevens, Senator Ted, U.S. Senator From Alaska:
        Opening Statements of...........1, 89, 167, 215, 315, 347, 429, 577
        Prepared Statement of........................................   167
        Questions Submitted by................................341, 667, 673
        Statement of.................................................    39
    Sullivan, Major General Paul J., Vice Chief, National Guard
      Bureau, Department of Defense, Prepared Statement of...........   247

    Taylor, Lieutenant General George Peach, Jr., Surgeon General,
      United States Air Force, Medical Programs, Department of
      Defense........................................................   372
        Prepared Statement of........................................   375
        Questions Submitted to.......................................   427
    The American Legion, Prepared Statement of.......................   562

    Visco, Fran, J.D., President, National Breast Cancer Coalition...   557
        Prepared Statement of........................................   558

    Zakheim, Hon. Dov S., Ph.D., Under Secretary of Defense
      (Comptroller), Department of Defense...........................     1
        Prepared Statement of........................................     7

                                 SUBJECT INDEX

                                  ----------

                             DEPARTMENT OF DEFENSE

                                                                       Page

    Army Aviation Procurement........................................    26
    Budget...........................................................    25
    Caches of Arms...................................................    21
    Costs of Occupation of Iraq......................................    17
    Doing Right by Our People........................................     8
    Estimated Costs of War...........................................    17
    Exit Plan........................................................    14
    Force:
        Protection...................................................     8
        Structure....................................................    21
    Funding:
        Conflicts....................................................    16
        The Global War on Terrorism..................................
    Haiti............................................................    12
    HMMWV............................................................    10
    IFF..............................................................    27
    Iraq Reconstruction Funding......................................    31
    Needed Enhanced Authorities......................................     7
    Operational:
        Post-handover Numbers........................................    36
        Support......................................................    34
    Outlays..........................................................    24
    Provincial Reconstruction Teams..................................    33
    Retention of Troops..............................................    20
    Rotation of Forces...............................................    29
    Shipbuilding.....................................................    15
    Temporary Strength Increases.....................................    12
    Transforming How DOD Does Business...............................     9
    TRICARE for Guard and Reserves...................................    13

                          Department of the Air Force

    Additional Committee Questions...................................   213
    Aerospace Expeditionary Force....................................   196
    Air and Space Dominance in a New Environment.....................   181
    Airborne Laser...................................................   206
    B-1..............................................................   174
    B-2............................................................174, 202
    B-52...........................................................173, 202
    Base Realignment and Closure (BRAC)............................201, 203
    Boeing Corporation...............................................   200
    Bombers..........................................................   173
    C-9As............................................................   209
    C-17...........................................................174, 205
    C-40s............................................................   208
    Columbus Air Force Base..........................................   205
    Developing Airmen--Right People, Right Place, Right Time.........   187
    End Strength.....................................................   200
    Ensuring America's Future Air and Space Dominance................   187
    F-117 Stealth Fighter..........................................213, 214
    F/A-22...............................................170, 199, 203, 210
    Fiscal Year 2005 Budget Request..................................   178
    Global Hawk...............................................176, 203, 206
    Guard and Reserve.........................................197, 204, 209
    Integrating Operations...........................................   193
    Joint Strike Fighter (JSF).......................................   212
        F-35.........................................................   172
    Missile Warning Receiver.........................................   211
    Operation Iraqi Freedom..........................................   175
    Predator.........................................................   176
    Recruiting and Retention.........................................   198
    Securing America's Next Horizon..................................   195
    Space Programs...................................................   198
    Space-based Radar................................................   212
    Supersonic Training Study........................................   214
    Supplemental Appropriations......................................   178
    Tanker Fleet.....................................................   202
    Tankers........................................................175, 198
    Technology to Warfighting........................................   190
    Unmanned Aerial Vehicles.........................................   175

                             Department of the Army

    A Commitment to Our Nation.......................................    57
    Add-on Armor.....................................................69, 82
        Kits for the HMMWV...........................................    70
    Additional Committee Questions...................................    85
    Ammunition Shortages.............................................    81
    Armoring Bradley Fighting Vehicles...............................    72
    Army:
        Aviation.....................................................    64
        End Strength.................................................    60
    ATIRCM...........................................................    86
    Brigade Units of Action..........................................    63
    Calibration Sets (CALSET) Requirements...........................    65
    Comanche Termination.............................................    82
    Core Competencies................................................    47
    Future Combat system (FCS).......................................66, 74
    Health Usage Monitoring System (HUMS)............................82, 83
    Improvised Explosive Devices (IED)...............................74, 87
    MEADS Reprogramming..............................................    80
    Miniature Kill Vehicle...........................................    79
    National Guard Aviation Modernization............................    71
    Patriot Advanced Capability--Phase 3 (PAC-3) Medium Extended Air
      Defense System (MEADS) Reprogramming...........................    79
    Post-traumatic Stress Treatment..................................    83
    Recruiting and Retention.........................................63, 87
    Reserve Component:
        Deployments..................................................    67
        Recruitment and Retention....................................    68
        Training and Equipment.......................................    73
    Reset........................................................64, 65, 77
    Rotation of Troops...............................................    70
    Science and Technology (S&T).....................................    86
        Funding......................................................    78
    Stop Loss........................................................    67
    Stryker..........................................................    66
    Supplemental Budget Request......................................69, 75
    Theater Support Vehicles.........................................    81
    Traveling Army Art Exhibit.......................................    77
    Traveling Army Exhibit on Integration............................    76
    2004 Army Posture Statement Executive Summary....................    45
    UAV Procurement..................................................    80
    Unmanned Aerial Vehicles.........................................    80

                             Department of the Navy

    Additional Committee Questions...................................   163
    Advanced Radar Technology........................................   157
    Airspace Availability for Training...............................   153
    Amputee Medical Treatment........................................   158
    Body Armor.......................................................   158
    Building on Success for:
        Immediate Operations.........................................   125
        The Future...................................................   130
    CG(X)............................................................   156
    CY 2003 Operational Successes (A Nation at War)..................    93
    DD(X)............................................................   141
    End Strength.....................................................   143
        Reductions...................................................   141
    Fiscal Year 2005 Budget Priorities--Underway With Naval Power 21.    92
    Fleet Response Plan..............................................   139
    Forcible Entry...................................................   144
    Global Hawk......................................................   161
    Improvised Explosive Device (IED)................................   153
    Information Paper................................................   147
    Joint Strike Fighter (JSF).....................................142, 164
    Large Deck Amphibious Ships Replacement..........................   146
    LHA(R) and Shipbuilding Industrial Base..........................   146
    Lightweight 155 Howitzer Program.................................   161
    Littoral Combat Ship (LCS).......................................   151
    M4 Carbines......................................................   165
    Maritime Norad Capability........................................   159
    Missile Defense..................................................   149
    MK45.............................................................   154
    Navy and Marine Corps:
        In Transformation (Future Readiness).........................    99
        Today (Current Readiness)....................................    94
    Navy High Energy Laser Testing...................................   163
    Our Fiscal Year 2005 Budget Request..............................   112
    Our Main Effort--Excellence in Warfighting.......................   132
    Our Total Force (Sailors, Marines, and Civilians)................   102
    Recruitment and Retention........................................   152
    Seabees..........................................................   160
    Ship Force Structure.............................................   144
    Shipbuilding Program.............................................   150
    Submarine Force Structure........................................   143
    Supplemental Funding.............................................   157
    Taking Care of Our Own...........................................   126
    Tilt-Rotor Pilot Training........................................   147
    Unmanned Aerial Vehicles (UAV)...................................   159
    Uparmored Humvees................................................   161
    V-22.............................................................   140
    Water Purification Program.......................................   163
    Your Navy Today--Projecting Decisive Joint Power Across the Globe   108
    Your Navy Tomorrow--Accelerating Our Advantages..................   110

                                Medical Programs

    Additional Committee Questions...................................   420
    Aeromedical Evacuation.........................................374, 410
    Blood Substitutes................................................   422
    Budget...........................................................   381
    Closure of U.S. Naval Hospital Roosevelt Roads, Puerto Rico......   369
    Combat Medicine..................................................   374
    Core Competencies................................................   352
    Current Deployments..............................................   352
    Defense Health Budget for Fiscal Year 2004.......................   368
    Dental Research................................................423, 425
    Deployment Medicine..............................................   361
    E-Health.........................................................   369
    Education........................................................   416
        And Training.................................................   411
    Force Health Protection..........................................   361
    Garrison Care....................................................   357
    Health Care Delivery.............................................   366
    Healthy and Medically Protected Soldiers.........................   352
    Iraq.............................................................   410
    Joint Initiatives................................................   409
    Loan Repayment Programs and Bonuses..............................   418
    Lowest KIA/WIA Ratios............................................   355
    Medical:
        And Dental Screening.........................................   389
        Personnel Shortages..........................................   392
        Readiness....................................................   373
        Research...................................................370, 389
    Mefloquine.......................................................   427
    Naval Medical Education and Training Command.....................   364
    Naval Medicine and Sea Power 21..................................   372
    Naval Medicine Office of Homeland Security.......................   362
    Naval Medicine's People: A Manpower Status.......................   362
    Next Generation TRICARE Contracts................................   380
    Non-combat Injuries..............................................   384
    Nursing:
        Force Development............................................   416
        Initiatives..................................................   407
    Operation Iraqi Freedom..........................................   373
    Post-deployment Health Assessments...............................   373
    Pre and Post Health Assessments..................................   355
    Professional Nursing in Naval Medicine...........................   409
    Protective Body Armor Research...................................   385
    Readiness........................................................   356
        And Homeland Security........................................   405
    Recruiting.......................................................   411
        And Retention.........................................394, 414, 417
    Research..................................................408, 411, 415
    Reserve Component and National Guard Integration.................   353
    Retention........................................................   411
    Skills Sustainment...............................................   414
    Surge Capability From Guard and Reserve..........................   419
    The Home Front...................................................   380
    The Lasting Wounds of War; Roadside Bombs Have Devastated Troops
      and Doctors Who Treat Them.....................................   390
    Transition to the:
        Department of Veterans Affairs...............................   356
        Next Generation of TRICARE Contracts.........................   369
    TRICARE..........................................................   374
    Uniformed Services University of the Health Sciences.............   366

                             Missile Defense Agency

    Additional Committee Questions...................................   341
    Advanced Technology Funding......................................   340
    Airborne Laser Program...........................................   342
    Ballistic Missile Defense System.................................   320
        Research and Development Program.............................   326
    BMD Fielding Acceleration........................................   333
    Concurrent Testing...............................................   337
    Cost Justification of a BMDS.....................................   336
    Development of BMDS Without Adequate Testing.....................   337
    Exoatmospheric Kill Vehicle (EKV) Repairs........................   330
    Fort Greely Missile Defense Facilities...........................   342
    Ground-based Missile Defense (GMD):
        Funding......................................................   331
        Program......................................................   341
    High Altitude Airship............................................   332
    Improving Fielded Capability Through Evolutionary Acquisition....   323
    Initial Defensive Capability--The Beginning......................   321
    International Partnerships.......................................   328
    MDA Funding......................................................   331
    Other Budget Highlights..........................................   327
    Responsible and Flexible Management..............................   329
    Rush to Deploy or Postpone?......................................   338
    Scientific, Engineering and Technical Assistance (SETA)
      Contractors....................................................   339
    Space and Missile Defense Command (SMDC) and MDA Relationship....   340
    Space Based Sensors--Space Tracking and Surveillance System
      (STSS).........................................................   333
    System Readiness and a Rush to Deployment--Why?..................   335
    System Test and Evaluation Planning Analysis.....................   339
    Testing Missile Defenses--We Need To Build It To Test It.........   324
    World-Class Systems Engineering--The Key Success Factor..........   329

                             National Guard Bureau

    Additional Committee Questions...................................   271
    Base Realignment and Closure (BRAC)..............................   267
    Blended Units....................................................   270
    C-17 Aircraft..................................................258, 261
    Employers........................................................   260
    Equipment Backlog................................................   264
    F-16 Fleet.......................................................   273
    Fielding of Lighter Weight Howitzers for Montana Army National
      Guard..........................................................   266
    Health Insurance.................................................   262
    Homeland Defense.....................................222, 230, 241, 251
    Homeland Security................................................   272
    Iraq.............................................................   268
    KC-135...........................................................   258
    Large Aircraft Infrared Countermeasures..........................   264
    Litening II targeting pods................................265, 273, 274
    Operation Iraqi Freedom..........................................   258
    Readiness........................................................   260
    Recruiting.......................................................   259
        And Retention................................................   258
    Sniper Pod.......................................................   265
    Support the War Fight................................221, 225, 239, 248
    Tactical and Strategic Airlift...................................   274
    Tankers..........................................................   259
    Training Ranges..................................................   265
    Transformation for the 21st Century..................223, 231, 242, 252
    Unmanned Aircrafts...............................................   274

                            Office of the Secretary

    Abuse............................................................   633
    Accomplishments Since 2001.......................................   579
    Active and Reserve...............................................   646
    Additional Committee Questions...................................   667
    Air Force Tanker Lease...........................................   652
    Assassination of Nicholas Berg...................................   640
    Assistance to Iraq: Grant or Loan?...............................   641
    Budgeting for Continuing Operations..............................   639
    Captured Enemy Ammunition in Iraq..............................667, 673
    Capturing Osama bin Laden........................................   662
    Chemical Demilitarization........................................   670
    Considerations and Recommendations for Goldwater-Nichols Act.....   606
    Contractors......................................................   627
    Control of Private Military Contractors..........................   624
    Conversion of Forces.............................................   650
    Current Homeland Defense Operations..............................   601
    Detainee Abuse in Iraq...........................................   644
    Detainees and Geneva Conventions.................................   664
    DOD Initiatives..................................................   587
    DOD Instructions Consistent With Geneva Conventions..............   661
    Equipment........................................................   649
    Fiscal Year 2004 Fiscal Status...................................   610
    Fiscal Year 2005 Reserve Fund....................................   638
    Following the Geneva Conventions.................................   660
    Highlights of Fiscal Year 2005 Budget Request....................   581
    Homeland Security................................................   673
    Humvees..........................................................   645
    Investigating Reported Abuses....................................   620
    Iraq...........................................................612, 655
        Troop Levels...............................................612, 619
    Iraqi Debt and Oil for Food Program..............................   657
    Joint Warfighting................................................   605
    Mail Service.....................................................   632
    Managing:
        Demand on the Force..........................................   580
        Detainees in Iraq............................................   637
        The Force....................................................   585
    Mark Berg........................................................   620
    Mass vs. Capability..............................................   586
    Mobility Requirement Study.......................................   617
    OIF and OEF Operations...........................................   597
    Other Overseas Operations........................................   600
    Paying War Costs.................................................   646
    Performance of Stryker Vehicles..................................   649
    Prisoner Abuses in Iraq..........................................   659
    Probability of Civil War in Iraq.................................   665
    Procurement Bow Wave.............................................   667
    Quantity of Military Investigations..............................   652
    RDT&E Budget.....................................................   668
    Readiness for Future Operations..................................   602
    Rebalancing Active and Reserves Forces...........................   631
    Reconstructing Iraq Infrastructure...............................   623
    Recruiting and Retention.........................................   652
    Reporting on Contracts...........................................   626
    Responsibility for Prisons in Iraq...............................   654
    Restructuring the Army...........................................   649
    Robust Nuclear Earth Penetrator..................................   635
    Security Forces in Iraq..........................................   623
    Shortfall........................................................   610
    Sovereignty......................................................   656
    Special Legislation..............................................   582
    Status of Forces Agreement.....................................653, 670
    Stop-loss Policy.................................................   614
    Stress on the Guard and Reserve..................................   616
    Structuring the $25 Billion Reserve..............................   614
    Supporting the Global War on Terrorism...........................   581
    Taguba Report....................................................   660
    Training Iraqi Security Forces...................................   647
    Transfer of Authority in Iraq....................................   621
    Transformation of the U.S. Armed Forces..........................   607
    Troops in Abu Ghraib.............................................   637
    2005 Budget......................................................   589
    United Nations and NATO..........................................   613
    Use of Iraqi Assets..............................................   642
    War on Terrorism.................................................   595
    Weapons Cache Update.............................................   655
    Weapons Caches...................................................   651

                                    Reserves

    Accomplishments................................................278, 292
    Active and Reserve Integration...................................   312
    All-Volunteer Force..............................................   277
    Army Reserve Response............................................   280
    Aviation Element Equipment Priorities............................   298
    Fair Representation and Compensation.............................   301
    Fleet Modernization..............................................   305
    Ground Element Equipment Priorities..............................   297
    Growing Contributions............................................   280
    Infrastructure...................................................   298
    Joint Reserve Centers............................................   312
    Manpower.........................................................   311
    Marine Corps Reserve.............................................   310
    Marines and Their Families.......................................   295
    Modernization..................................................301, 304
        And Transformation...........................................   299
    National Guard and Reserve Equipment Appropriation...............   297
    Naval Reservists.................................................   310
    Navy Reserve Priorities for 2004.................................   289
    Personnel........................................................   309
    Preparation for OIF II/OEF V.....................................   297
    Readiness........................................................   301
    Recruiting.......................................................   302
        And Retention..............................................295, 300
    Retention.................................................301, 303, 311
    The Challenge....................................................   277
    The Imperative for Change........................................   280
    Your Marine Corps Reserve Today..................................   294

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