[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



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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.

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

                  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\
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    \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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